One of my favorite blogs, www.biopact.com, passed on some misleading reporting over the weekend in this post. As reported, on Friday the California Air Resource Board did in fact decide to allow blends of up to 10% ethanol with gasoline. This is a big deal from an ethanol market perspective because historically, CARB had restricted ethanol to 5.7% to protect local and regional air quality and public health. Now CARB has decided as part of an extensive review of the fuel performance models that the agency uses to judge whether different fuel mixtures should be allowed to increase the allowable limit to 10%.
However the operative word here is "allow." Oil companies are not required to use 10% ethanol. They are simply required to make fuels that protect air quality. So it's a little soon for the industry to be counting the extra gallons of sales.
California has also announced its intention to adopt a low-carbon fuel standard, which will require the oil companies reduce the average global warming pollution from motor vehicle fuels. Certainly mixing ethanol with gasoline will be one option and this ruling by CARB will provide the oil companies with flexibility.
Of course as my colleague's quote at the end of this article on the ruling points out, even at 10%, we still need advanced biofuels that produce as little global warming pollution as possible.