Yesterday, the Environmental Protection Agency approved raising the proportion of ethanol in pump gasoline from 10 percent (E10) to as much as 15 percent (E15).

It would be the first increase in ethanol percentage since 1978, when the 10-percent blend was approved. Roughly 70 percent of U.S. gasoline contains at least some ethanol, and 10 states require that gasoline sold within their borders be E10.

The move is a first step toward increasing overall use of ethanol by U.S. drivers, but it comes with several significant restrictions.

To address concerns by carmakers that more ethanol in gasoline will damage older cars, the agency is limiting the approval to use in cars from the 2007 model year or newer.

Clear labels required

How this will work in practice remains to be determined. The EPA said it will develop labeling that will clearly explain to consumers which vehicles can and can't use the new blends.

The decision applies only to passenger vehicles built in 2007 or later, and does not affect other gasoline engines, including those in boats, motorcycles, or lawn mowers.

Gas pump

Gas pump

Farmers cheer, greens and carmakers don't

Reaction to the decision fell along predictable lines: Ethanol and agricultural interests lauded it, while automakers expressed concern, as did some environmental groups.

Some studies show that the "wells to wheels" energy balance of U.S. corn-based ethanol is not beneficial . Today's ethanol distillation methods use lots of fresh water, and energy-intensive industrialized agriculture emits large amounts of CO2.

Ricardo study: little danger

Automakers have worried for years that they will be blamed if older cars experience problems with higher ethanol blends in gasoline. They have pushed consistently for more detailed studies on larger samples of cars.

But a study released in September by consultant Ricardo showed that higher ethanol blends posed little danger to older cars, even the oldest ones on the road, those built from 1994 to 2000.

Many analysts expect the EPA to expand its approval of blends up to E15 for older cars as more data is provided by manufacturers and third parties.

The agency said it was evaluating whether to extend approval to cars made from 2001 to 2006. That decision could come as early as next month, and most likely by the end of the year.

Congressional mandate

The 2007 Energy Independence and Security Act passed by Congress required the U.S. to use 11.1 billion gallons of ethanol in 2010, rising to 36 billion by 2022.  Some question if that number is achievable--or even realistic.

Even if ethanol made up 10 percent of every gallon of gasoline used today, the total would be less than half the 2022 total.

Flex-fuel vehicles, which can run on any mix of gasoline and ethanol up to E85, cost automakers an additional $100 or so to build. Domestic makers have pledged to increase the number of flex-fuel models in their range over time.

[UPDATE: At the same time, according to Reuters, Brazil has reduced the percentage of ethanol mandated for its gasoline from 25 to 20 percent, a result of tight supplies after a rainy growing season for sugar cane. Ethanol made from sugar cane gives roughly twice the yield per acre as that made from corn.]

[EPA, Car Connection]