Wonkblog: The U.S. is hitting its ethanol limit. So the EPA may relax its biofuels rules.

August 7, 2013

Brad Plumer, August 7 – When it comes to ethanol, the United States appears to have reached its limit — at least for the time being.Back in 2007, Congress passed a law that would essentially require the nation to use more and more ethanol and other biofuels each year. But for reasons of chemistry and economics, those targets are becoming increasingly difficult to fulfill. That helps explain why, on Tuesday, the Environmental Protection Agency took the rather unusual step of announcing that it would look into ways to adjust those targets in the years ahead.

Here’s the back story: In 2007, Congress updated its Renewable Fuel Standard, which set rough targets for the amount of ethanol and other biofuels that had to be blended into the nation’s gasoline supply each year. By 2013, that target was supposed to hit 16.55 billion gallons — and it was supposed to keep rising until it hit 36 billion gallons in 2022.

There was just one hitch. When Congress passed the law in 2007, lawmakers figured that Americans would keep using more and more gasoline each year, and all that ethanol would make up a small portion of the total. Instead, the opposite happened. Americans started buying more fuel-efficient cars and driving less. U.S. gasoline use is actually falling right now.

And that’s created a hassle. Right now, the nation is at the point where much of its gasoline contains about 10 percent ethanol. That, in itself, isn’t a problem. Cars and fuel pumps in the United States can easily handle gasoline with 10 percent ethanol or less, a blend known as “E10.” But if we started mixing even more ethanol in that gasoline — say, moving up to 15 percent, or E15 — it gets trickier.