US oil industry hails role of ethanol, but with 10% cap

24 February 2009 18:43  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--The US oil industry on Tuesday extended a conditional olive branch to the ethanol sector, acknowledging its role in the fuel supply but opposing any relaxation of the 10% (E-10) gasoline blending cap.

“The oil industry understands and appreciates ethanol,” American Petroleum Institute (API) vice president Jim Ford said in the keynote address to the National Ethanol Conference in San Antonio.

The US will need to use all alternative types of fuel available to secure its energy independence, he said.

But the oil industry did not support blending ethanol in gasoline beyond E-10, Ford said.

That leaves the oil industry group squarely at odds with the Renewable Fuels Association, which is calling for higher blend mandates to avoid a possible demand cap as production rises.

Ford said use of E-10 should be maximised before increased blend levels are considered.

The US consumes about 140bn gal/year of gasoline and blends ethanol in about 70% of the total fuel pool.

Ethanol and other all alternative fuels would only play a secondary role in meeting US energy needs, the API head contended.

“The US will continue to depend on fossil fuels for decades to come,” he said.

Ford called for closer ties between the ethanol and oil industries, telling delegates that the API was committed to expanding consumption of biofuels.

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By: William Lemos
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