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Nigeria’s State Owned Oil Company To Go Public

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EPA Proposes Cut In Biofuel Requirements

Corn

The Environmental Protection Agency has proposed a reduction in the amount of biofuels required to be added to gasoline, Reuters reports, in what could be a first step towards a wider reform of the authority’s biofuel rules.

Currently, the Renewable Fuel Standard, which was introduced back in 2005, requires that gasoline in the U.S. must be blended with biofuels. The amount of biofuels was planned to gradually increase on an annual basis, to reach 36 billion gallons in output in 2022.

As Reuters notes, however, the EPA’s proposal will actually lower the requirements for “renewable fuels” 2018.

The EPA’s head Scott Pruitt announced the authority will be revising all future biofuel production and use targets, which naturally draw praise from the oil industry, but reining hellfire down from irate corn farmers as corn-based ethanol is the dominant biofuel of its type in the U.S.

Environmentalists seem to have mixed feelings about ethanol, and have called on Congress for a reform of the RFS program.

Under the EPA’s new proposal, gasoline refiners will have to mix their fuel with 19.24 billion gallons of ethanol and advanced biofuels, of which 15 billion gallons of conventional ethanol – the one produced from corn starch directly, rather than from corn starch produced from renewable corn biomass. This compares with a target of 26 billion gallons of biofuels in total set for 2018 back in 2007.

This is not the first time the EPA set lower biofuel targets than the ones approved ten years ago. In 2015, the EPA approved lower biofuel targets than the ones stipulated in the Energy Independence and Security Act.

The oil industry has been complaining about the biofuel standard ever since it came on the scene. It increases costs, they argue, and the targets are impossible to meet: there is a limit to how much biofuel a gasoline engine can take, and this limit is pretty low. Last year, the average ethanol content in the gasoline sold in the U.S. was 10 percent, although there are engines capable of operating with 85-percent ethanol content.

By Irina Slav for Oilprice.com

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