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Subsidies taken out for biofuel blending gas pumps

(Reuters) — Lobbyists opposed to mixing more ethanol in gasoline scored another victory on Wednesday after the U.S. House of Representatives passed a farm bill with a provision removing subsidies for biofuel blending pumps in rural areas.

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The provision, tucked into page 735 of the 949-page farm bill, could make it more difficult for gasoline blended with higher concentrations of ethanol to find its way to rural areas, where demand for the fuel is greatest.

That, in turn, could make it more difficult for the United States to implement a program known as the renewable fuel standard, or RFS, which mandates increasing amounts of biofuels like corn-based ethanol be blended into the nation’s fuel supply.

The subsidy cut is also a blow to the Obama administration, which in 2010 set a goal of helping gasoline station owners install 10,000 blender pumps over the next five years to promote consumption of higher-ethanol gasoline. Blender pumps mix gasoline and ethanol for sale at gas stations.

“We figure there will be a lot fewer blender pumps if it’s not subsidized by the federal government,” said Wayne Allard, vice president of government relations for the American Motorcyclist Association, which lobbied for the provision.

Allard said his group wanted to limit the chance that motorcycle owners will damage their engines by buying gasoline blended with higher amounts of ethanol than the 10 percent norm.

The lobbying victory follows a November move by the U.S. Environmental Protection Agency to reduce for the first time the amount of ethanol required to be blended into U.S. gasoline supplies.