U.S. seen needing a year to finish ethanol blending tests

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency said on Wednesday it will take another year to complete government testing on whether ethanol can be blended into gasoline at higher concentration levels without harming the engines of vehicles and non-road equipment.

Ethanol, now made mostly from corn, is approved to make up 10 percent of a gallon of gasoline that be used safely in cars and trucks. But ethanol producers are pushing for the government to allow ethanol at higher blend levels, as more ethanol supplies will be required to be used each year under federal law.

Congress required 9 billion gallons of ethanol and other biofuels to be blended into gasoline last year and increase annually until reaching 36 billion gallons a year in 2022.

Margo Oge, Director of the EPA's Office of Transportation and Air Quality, told a Senate panel that the EPA is working closely with the Energy Department to evaluate the impact of higher blended ethanol levels and they "hope to complete the testing over the course of the next year."

"The testing effort has been designed to provide the necessary emissions and durability data to support a decision on the appropriate use, if any, of higher blends of ethanol in gasoline vehicles and engines," Oge said in a written statement to Senate Clean Air and Nuclear Safety Subcommittee at a hearing on renewable fuels.

Oge pointed out that the EPA received a petition last month from Growth Energy and 52 ethanol manufacturers to allow gasoline to contain up to 15 percent of ethanol by volume.

Oge said the agency will "will soon" publish the proposal in the Federal Register of government regulations and ask for public comment on it. She said EPA has to 270 days to act on the request from the March 6 date that it was received by the agency.

The head of the trade group that represents U.S. oil refiners that make gasoline told the Senate panel that it opposed any legislation or agency regulations that would approve higher ethanol blends until "unbiased and comprehensive" testing of the fuel is complete.

"There has not been sufficient testing of motor vehicle and non-road equipment engines to justify a determination that any mid-level ethanol blend would meet the safety and environmental requirements of the time-tested Clean Air Act protections," said Charles Drevna, President of the National Petrochemical and Refiners Association.

Senator Tom Carper, who chairs the subcommittee, questioned whether the U.S. market can absorb increasing ethanol supplies each year given that gasoline demand has declined due to weak economy and more fuel-efficient vehicles on the road.

"As (gasoline) consumption decreases our biofuels standard increases," he said. "Are we moving too fast for our infrastructure and engines to handle the biofuels safely?"

(Reporting by Tom Doggett)