The U.S. Environmental Protection Agency (EPA) is considering whether to increase the percentage of ethanol than can be placed in gasoline. At present, ethanol blends of up to 10 percent are permissible, and studies are underway to determine whether more ethanol can be added without causing harm to vehicles, fuel dispensing equipment and air quality.

It's possible, however, that the EPA won't wait for the study results because the nation is swimming in ethanol.

A couple of years ago, U.S. ethanol production capacity soared after Congress passed the Renewable Fuel Standard mandating increasing amounts of ethanol to the nation's fuel supply. At the time, Congress assumed that gasoline consumption would continue to rise annually, making it possible to add greater ethanol supplies over a period of several years. But the recession led to a decline in the growth of gasoline consumption, and thereby limited the amount of ethanol that could be used in the nation's gasoline pool.

As Matthew Wald reported in The New York Times last week, "updated [gasoline consumption] projections suggest that the country is unlikely to be able to use all the ethanol that Congress has ordered up. So something has to give."

The EPA is considering raising the limit on ethanol blends from 10 percent (E10) to 15 percent (E15). Although the oil and natural gas industry is the largest ethanol user and acknowledges its value as an octane enhancer, API believes the EPA should refrain from issuing its ruling until the ethanol studies are complete.

Ethanol is corrosive, and the nation's consumers need to be assured that the gasoline they purchase will not damage their vehicles, gasoline pump components and erode gains that have been made in air quality.

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Update on December 1, 2009: The Environmental Protection Agency delayed until mid-2010 the decision on the allowable ethanol content in fuel. Read API's statement on this decision.