The Wall Street Journal: U.S. scales back ethanol quotas for gasoline

The Environmental Protection Agency Monday issued final regulations that ease the annual requirements for ethanol in gasoline, a response to market restraints and other conditions that are preventing the Obama administration from meeting goals laid out in a 2007 law.

That law compelled refiners to blend an increasing amount of biofuels into the U.S. gasoline supply each year. While the 2007 law set out goals for ethanol use, the EPA was charged with mandating the quotas on a year-by-year basis.

The agency is two years behind in crafting the quotas, putting the agency in the awkward position Monday of issuing the rules retroactively for 2014 and 2015 as well as establishing the mandate for 2016.

For 2014, the agency retroactively set the total amount of ethanol to be blended at 16.28 billion gallons, roughly what was actually produced. For 2015, EPA set the total level at 16.93 billion gallons, close to the estimated production for this year. And for next year, the agency set a level of 18.11 billion gallons, a significant jump.

EPA had faced a court-ordered deadline to issue the 2014 and 2015 levels by Monday.

An expanded version of this story is available at WSJ.com.

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