"Groups Want More Tests On Higher-Ethanol U.S. Fuel"

"A coalition of oil companies, car and engine manufacturers and fuel sellers told the Obama administration on Thursday not to increase the amount of ethanol blended into gasoline based on inadequate test data.

The Environmental Protection Agency said last month it needs more time to decide on a industry request to boost the level of ethanol in gasoline to 15 percent from 10 percent, but indicated it would likely approve the higher fuel blend for new American cars.

Gasoline approved to have a higher volume of ethanol would help absorb the annual increase in ethanol supplies required by Congress in its attempt to reduce U.S. petroleum imports. The higher blend would help the U.S. ethanol industry, which was hard hit in 2008 by the economic downturn and a drop in crude oil prices to nearly $30 a barrel. Many companies were forced into bankruptcy and some production capacity was also idled.

Crude oil prices have since rebounded to above $80.

The EPA plans to make a final decision on so-called E15 gasoline by mid-June."

Tom Doggett reports for Reuters January 8, 2010.