EPA proposes big reduction in 2014 ethanol blend volume

The U.S. Environmental Protection Agency has proposed a surprisingly deep cut in the amount of ethanol that must be blended into U.S. gasoline next year, according to an agency document seen by Reuters. In a historic retreat from an ambitious 2007 law and a victory for refiners, the agency proposes a "significant" reduction in the overall renewable fuel requirements to 15.21 billion gallons, far less than the 18.15 billion gallon 2014 target established by law, the documents show. That would reduce the volume of corn-based ethanol to about 800 million gallons less than this year's 13.8 billion gallons, a much larger cut than many industry observers had been expecting. The law had required 14.4 billion gallons for 2014. The figures match those reported earlier on Thursday by news agencies including Reuters, but the document also includes previously unreported details on the EPA's proposal. The agency laid out three different approaches, one calling for a larger volume of corn-based ethanol and one calling for less, but it advocated the 13 billion gallons in the middle. The apparent proposal stirred shock and some disbelief across biofuel and energy industries, as most officials and traders had not expected any further word on next year's rules until the White House had approved them. Shares of independent refiners surged, while the price of ethanol credits dived...more