WASHINGTON (Reuters) - The Obama administration said on Friday it will provide incentives to U.S. gasoline stations to install more pumps with a higher blend of ethanol, part of its effort to boost consumption of the renewable fuel.
Agriculture Secretary Tom Vilsack said the administration has targeted installing 10,000 flexible fuel pumps nationwide during the next five years.
"Flex-fuel pumps will give Americans a choice to purchase domestically produced renewable transportation fuels," Vilsack said in a statement. The pumps allow consumers to blend motor fuel with up to 85 percent ethanol for cars that can run on the higher mixes.
The funding will come from the USDA's Rural Energy for America Program.
The Environmental Protection Agency approved in January raising the amount of ethanol in gasoline to 15 percent for newer cars and trucks from 10 percent, a ruling welcomed by the industry and by farmers who supply the corn to make the fuel.
Most gasoline sold in the United States is a mix of 10 percent ethanol. Currently, only about 2,350 fueling stations out of than 167,800 stations nationwide offer fuel with a blend of 85 ethanol and 15 gasoline.
Nearly 40 percent of this year's corn 12.447 billion bushel crop will be used in making ethanol. Corn-based ethanol has been touted by the struggling ethanol industry and American farmers who supply corn as a way to reduce U.S. dependence on imported oil, create jobs and boost income for rural communities.
But critics contend the subsidies do more harm than good.
Grain farmers like high corn prices, but livestock farmers and food companies say ethanol leads to food inflation by driving up the cost of meat and poultry.