UPDATE 2-US on track to finish test on higher ethanol blend

Thu Sep 23, 2010 8:39pm GMT

 * DOE to complete data for '07 and newer cars this month
 * Data for 2001 to 2006 cars expected end November
 * EPA will make decision within 2 weeks after gets data
 * Trade group says bit-by-bit decisions could harm market
 (Adds fresh EPA quote and trade group) 
 By Russell Blinch
 WASHINGTON, Sept 23 (Reuters) - U.S. Energy Secretary
Steven Chu said on Thursday his department was on schedule to
deliver testing data on a higher blend of ethanol for motor
vehicle gasoline.
 "We're going to have all the information ready for the EPA
by the end of the month," Chu told reporters at a conference.
 The Department of Energy is studying whether fuel
containing 15 percent ethanol, known as E15, can be burned
safely in  traditional car engines. The current blend level is
10 percent.
 Chu's agency previously had delayed completion of the
tests, but is now expected to deliver data on the first set to
the Environmental Protection Agency by the end of September.
The first set centers on the effect of E15 on cars built in
2007 and later.
 The DOE is expected to deliver data on cars built from 2001
to 2006 by the end of November.
 If the EPA approves the blends, it could provide a boost
for the domestic ethanol industry, which has suffered in recent
years from tight financing and high costs for corn and other
 Companies that could benefit include Archer Daniels Midland
(ADM.N: Quote), Poet, a privately held company, and oil refiner Valero
Energy Corp (VLO.N: Quote).
 The auto industry has urged the government to conduct full
tests for E15 because it is worried the blend could corrode
fuel lines and damage engines.
 EPA Administrator Lisa Jackson told a congressional hearing
on Thursday her agency would make a decision soon after
receiving the data. "We are prepared to render our decisions
within two weeks," after getting the data, she said.
 Growth Energy, a group of ethanol producers who filed for a
government waiver that would allow the higher blends, has said
E15 could be available in March or April, if the EPA approves
the fuel for both sets of cars by the end of the year.
 But many producers also say E15 can be used safely in
nearly all older engines and fear the government's bit-by-bit
process could bring confusion to the market.
 "EPA's insistence on bifurcating the market this way, and
possibly again with 2001 and newer (cars), without providing
any scientific evidence creates unnecessary confusion that may
hinder additional ethanol sales, not expand them," said Matt
Hartwig, a spokesman for the Renewable Fuels Association trade
 (Additional reporting by Timothy Gardner and Charles Abbott;
Editing by Walter Bagley)

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