The Environmental Protection Agency (EPA) has approved higher blending rates for ethanol in gasoline for 2007 and newer vehicles, allowing mixtures with up to 15% of the corn-based fuel at the pump.

The current maximum ethanol blend rate is 10%; a mid-level blend rate
increase of 12% had been discussed in recent months.

The EPA has said a congressional mandate for increased ethanol use can’t be met without approving higher blends. Congress has required refiners to blend 36 billion gallons of biofuels, mostly ethanol, into fuel for automobiles by 2022.

Critics contest that the increased diversion of corn into ethanol is making animal feed more expensive, increasingly worrisome for livestock producers following Friday’s very bullish USDA Crop Production report.

But this is just an increase in the allowable blend rate and is not a requirement, explains Steve Meyer in the Daily Livestock Report published by the Chicago Mercantile Exchange Group.

Meyer says due to the fact that ethanol is selling for very nearly the price of gasoline at present, he doubts whether many or even any blenders will move to the 15% rate any time soon.

“Such a move is made even less likely due to liability concerns, especially if the higher-ethanol fuel gets used in cars for which it is not yet approved,” Meyer writes in today’s edition.