EPA boosts amount of ethanol in gasoline supply

WASHINGTON - The Obama administration is boosting the amount of corn-based ethanol and other renewable fuels in the U.S. gasoline supply despite sustained opposition by an unusual alliance of oil companies, environmentalists, and some GOP presidential candidates.

The Environmental Protection Agency on Monday issued a final rule designed to increase production of ethanol to be blended with gasoline through 2016, a decision that could reverberate in Iowa's crucial presidential caucuses.

The agency said it will require more than 18 billion gallons of renewable fuels in 2016, most of it ethanol. The amount is less than was set in a 2007 renewable fuels law, but is more than was proposed by the EPA in May. The agency said that the demand for gasoline has risen since May, increasing the amount of renewable fuels that can be blended in.

The decision doesn't necessarily mean a higher percentage of ethanol in an individual driver's tank, and isn't likely to have much effect on gas prices. But it does mean there will a higher supply of the homegrown fuel overall.

Janet McCabe, the acting assistant administrator for EPA's Office of Air and Radiation, said the renewable fuels industry is "an incredible American success story" and the 2016 targets are a signal that it is growing.

More renewable fuels are good news for farm country. But ethanol critics say the levels are too high.

Oil companies have spent many years fighting the 2007 law, saying the market, not the government, should determine how much ethanol is blended into their gas. Environmental groups say that farmers growing large amounts of corn for ethanol are tearing up the land. And conservatives like Texas Sen. Ted Cruz, who is running for the Republican presidential nomination, call the government's longtime support for ethanol "corporate welfare."

The renewable fuels law sought to address global warming, reduce dependence on foreign oil, and bolster the rural economy by requiring a steady increase in the overall amount of ethanol and other renewable fuels blended into gasoline over time.