March 6, 2009

Ethanol producers push for new limits

Struggling U.S. ethanol producers are asking the federal government to raise ethanol limits, a step they say will produce jobs and spur energy independence.

Growth Energy, representing ethanol firms, will submit a request to change the current 10 percent limit to 15 percent, The Washington Post reported Friday.

This about jobs, energy security for America, improving the environment and meeting our legal responsibilities under the 2007 energy bill, said retired U.S. Army Gen. Wesley Clark, a co-chairman of Growth Energy.

Automakers are resistant to the concept, claiming there is uncertainty as to how much an increase might hurt engine parts. But, Ford Motor Co., said it would back a plan to raise the limit to 15 percent, the newspaper said.

Ethanol producers haven't reached the legislated 2022 target of 36 billion gallons per year, producing about 10.5 billion gallons this year. U.S. President Barack Obama during the election campaign pointed to 60 billion gallons a year as an industry target.

Under current conditions, the industry is struggling. The nation's second-largest producer VeraSun filed for bankruptcy protection last fall, after losing hundreds of millions on soured hedge contracts for corn.