Orlando (Platts)--26Feb2008

US ethanol producers will seek federal approval this year for greater
levels of ethanol blended into gasoline than the currently allowed 10%, or E10
blend, Renewable Fuels Association CEO Bob Dinneen said Tuesday.

"The RFA will be working with Minnesota, other states and other
stakeholders to submit a [waiver to allow higher ethanol blends] this year,"
said Dinneen at RFA's annual conference being held this week in Orlando. "We
have confidence in our fuel."

RFA, the US ethanol industry group, will need federal backing from the
Environmental Protection Agency for ethanol blends above E10. Currently, the
federal rule covers blending of up to 10% ethanol for standard vehicles,
though some states have allowed higher blends.

One such state is Minnesota, which has passed legislation that requires
all the state's gasoline contain 20% ethanol by 2013. The RFA recently
completed a year-long testing program for E20 with Minnesota, according to
Dinneen.

Preliminary results have "yet to find a significant barrier" to using
higher ethanol blends in standard vehicles, he said.

Final results from the Minnesota E20 testing could be out by the end of
March, RFA spokesman Matt Hartwig told Platts on the sidelines of the
conference. "We chose E20 because that's what Minnesota passed in legislation,
but it may not be 20%" that the RFA ends up seeking federal backing for, he
said.

"Maybe it's E15 or E17 or E12, but we believe there is a number higher
than 10 that would work more effectively...using today's technologies," not
just in flexible-fuel vehicles, said Hartwig.

"We want to start moving that process forward. The timing on the final
[decision by the federal government on allowing higher ethanol blends]...is I
think up in the air and a lot will depend upon the final results that come
from the E20 report as well as what EPA and the Department of Energy and
others in the government may already have going on," he said.

Feedback will be needed from the auto and fuel industry, said Hartwig,
noting those industries are not "huge E20 fans."

"The refiners are going to resist," said Hartwig. "It's a greater
percentage of their product [being replaced by ethanol] that's been the
objection to ethanol all along. It's not about the performance or quality of
the fuel. It's about share of the marketplace."

"With the autos, they've got a lot of warranties out there that are E10,
so they have some concerns," he said.

"The preliminary indications are that there is no reason why the federal
government can't move forward with the required testing to certify higher
ethanol blends," said Hartwig.

--Beth Evans, beth_evans@platts.com