Ethanol: Remixed

No, it’s not the latest CD from Verve, it’s the latest rumble from industry groups and states: Raise the percentage of ethanol blended into unleaded gasoline.

The current cap is 10 percent. An ethanol trade group called Growth Energy has formally requested an increase to 15 percent, saying it will create more than 100,000 jobs and pump more than $24 billion into the economy, Reuters reports. There’s also the added benefit of increasing the demand for ethanol by 6 billion gallons a year, MSNBC says.

The U.S. Environmental Protection Agency is studying whether a higher blend would harm older cars. Some newer vehicles are designed to run on E-85 (an 85 percent blend).

Ag. Secretary Tom Vilsack (former Iowa governor) supports the move, and says raising the threshold to 13 percent is a good baby step. He even talked (speaking to farmers) about going as high as 20 percent in the future.

Ag. secretaries from 11 states also are pushing for up to 20 percent, and have written to President Barack Obama (whose mailbox is probably pretty full, just to put this in perspective). The state officials say it will be difficult to meet a federal requirement that 36 billion gallons of ethanol be blended into the U.S. fuel supply by 2022 without lifting the 10 percent cap, notes Autobloggreen.

The EPA has about 270 days (starting in early March 2009) to respond to Growth Energy’s request.

With some ethanol companies tanking in the bad economy, and lobbyists on both sides, there’s likely to be substantial debate and hopefully a little science when it comes to making a decision. Early results from the U.S. Department of Energy on using higher blends in so-called legacy vehicles is (pardon the pun) a mixed bag.