The Environmental Protection Agency's announcement Tuesday that it would put off its ruling on whether to increase the ethanol blend level until mid-2010 drew mixed reviews even within the industry.
One ethanol trade group lauded the decision as a "strong signal" the EPA would eventually bump up the cap, while another organization said the delay "threatens to paralyze" the industry.
Regardless, the federal agency said more testing was needed before it could rule on whether to raise the maximum amount allowed in most gasoline to 15 percent from 10 percent.
Growth Energy, an ethanol trade group, asked the EPA in March to increase the blend level to E15. Under the Clean Air Act, the EPA was required to respond by Tuesday.
In a letter to Growth Energy, EPA assistant administrator Gina McCarthy wrote, "Although all of the studies have not been completed, our engineering assessment to date indicates that the robust fuel, engine and emissions control systems on newer vehicles (likely 2001 and newer model years) will likely be able to accommodate higher ethanol blends, such as E15.
"However, we continue to evaluate the question of component durability when E15 is used over many thousands of miles and there is an ongoing study being conducted by (Department of Energy) that will provide critical data on this issue."
She said EPA expects to have that data by mid-June.
Growth Energy put a positive spin on the delay.
"This announcement is a strong signal that we are preparing to move to E15," Growth Energy co-chairman Wesley Clark said.
The EPA also said it has begun the process to develop labeling requirements, if the blending limit is raised.
Growth Energy CEO Tom Buis said in a statement that ethanol critics called for additional testing.
"We are confident the ongoing tests will further confirm the data we submitted (to the EPA) and silence the critics," Buis said.
But the Renewable Fuels Association, another ethanol trade group, criticized the EPA and called for the agency to immediately approve intermediate blends, such as E12.
"This delay threatens to paralyze the continued evolution of America's ethanol industry," RFA president and CEO Bob Dinneen said in a statement. "As EPA itself indicated, the scientific data to date has demonstrated no ill-effects of increased ethanol use in any vehicle currently on the road."
Jere White, executive director of Kansas Corn Growers Association, said he had no problem with the delay.
"The agency was honest in saying it needed more time to complete its research," he said. "The best outcome would be a decision to allow higher blends of ethanol that can be used in all vehicles, including those manufactured before 2001."
Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, praised the postponement.
"We are pleased that EPA recognizes the importance of making decisions based on sound science," he said in a statement.
The American Petroleum Institute, a trade group representing the nation's large oil companies, called EPA's ruling "a sound decision."