UPDATE 1-Rule lifting U.S. E15 gasoline ban likely delayed, but sales possible -ag sec

The U.S. Environmental Protection Agency will probably not be able to finalize its rule allowing year-round sales of higher ethanol blends of gasoline known as E15 by summer, but could compensate by declining to enforce the current summer-time ban, Agriculture Secretary Sonny Perdue said on Wednesday. "Unfortunately those rules probably will not be out for the driving season. But they're committing to, I think the term of art is, discretionary enforcement for those who want to continue to sell E15 in the summer until they get those rules established," he said in his testimony to House Agriculture Committee.

President Donald Trump had announced in October he was directing the EPA to allow year-round sales of E15, in a win for the powerful corn industry which supplies ethanol. E15 gasoline contains 15 percent ethanol, versus the 10 percent found in most U.S. gasoline. The summer-time ban had been imposed over concerns that E15 contributes to smog in hot weather, though recent studies have shown its impact on air quality may not be significantly different than E10.

The EPA had planned to release a draft of the rule in early February but ran into delay due to a 35 day-long partial government shutdown that furloughed workers. Despite the delay, EPA officials have said the agency was still working toward finalizing the rule by June 1.

“EPA is planning on releasing its ... proposal in March, and working expeditiously to propose and finalize the rule consistent with the President’s direction before the start of the summer driving season," EPA spokesman Michael Abboud told Reuters in an emailed statement. (Reporting by Humeyra Pamuk; Richard Valdmanis Editing by Marguerita Choy)