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EPA proposes lowering required amount of ethanol in gas
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WASHINGTON (AP) — The Obama administration is proposing to reduce the overall amount of ethanol blended in the nation's gasoline in coming years, a blow to renewable fuel companies that have pushed to keep high volumes of their product flowing into drivers' gas tanks.

The move is unlikely to mean much for consumers or prices at the pump, but the ethanol policy has been popular in farm states that have profited over the years from higher corn prices linked to the use of corn-based ethanol. Campaigning in Iowa, Democratic presidential candidate Hillary Rodham Clinton has called for a robust renewable fuels standard.

The 2007 renewable fuels law tried to address global warming, reduce dependence on foreign oil and bolster the rural economy. It required a steady increase in the amount of renewable fuels like corn-based ethanol blended into gasoline over time. The new proposal would reduce the amount required by more than 4 billion gallons in 2015 and by more than 3 billion gallons the following year.

The agency said the standards set by the law cannot be achieved, partly due to limitations on the amount of non-ethanol renewable fuels that can be produced. Next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required and the administration expected. There has also been less gasoline use than predicted, the Environmental Protection Agency said.

Still, the targets would represent an overall increase in the use of renewable fuels over time. EPA officials said the new requirements would drive growth at an "ambitious but responsible" rate.

"We believe these proposed volume requirements will provide a strong incentive for continued investment and growth in biofuels," said EPA's Janet McCabe.

The lower targets are better news for the oil industry, which has fought the existing policy. Oil companies say they would prefer that the market determine how much ethanol is blended into their gas.

Tom Buis of the ethanol industry group Growth Energy accused the EPA of siding with the oil companies.

"It is unfortunate that EPA chose to side with the obligated parties who have deliberately refused to live up to their obligation to provide consumers with a choice of fossil fuels or lower cost, higher performing, homegrown renewable energy at the pump," Buis said.