Federal regulators Monday approved motor fuel blends that use more ethanol than most of the gasoline currently available, paving the way for a market expansion that biofuel producers have been seeking for years.

But skepticism from some gas-station owners and a looming legal battle threatened to block the effort to distribute the new types of fuel widely, despite the Environmental Protection Agency's steps.

The EPA Monday approved applications from 20 companies seeking to make ethanol for E15, a gasoline blend with 15% ethanol. Most of the fuel used in the U.S. currently contains about 10% ethanol, which is made from corn and other plants.

EPA has already said E15 can be used safely in newer cars, but Monday was the first time the agency has officially cleared any specific type of E15 fuel for sale at the pump.

The Renewable Fuels Association, a trade group, said the announcement meant E15 could be on the market by this summer.

"Our nation needs E15 to reduce our dependence on foreign oil," said Tom Buis, CEO of Growth Energy, another ethanol trade group. "Today's announcement from EPA finally puts that goal within reach."

U.S. Agriculture Secretary Tom Vilsack said the approvals were "a clear indication that fuel producers understand that America's motorists want a choice when they fill their gas tanks," adding that "the industry also knows that higher biofuel blends are good for their bottom line, will support rural economies, and hold down fuel costs overall while giving consumers greater access to renewable, homegrown fuel."

Some gas stations, particularly in the ethanol-friendly Midwest, are prepared to start selling the fuel immediately.

But Stephen Brown, vice president of government affairs for refiner Tesoro Corp. (TSO), which distributes to about 1,175 U.S. gas stations, said the company had concerns about liability. Tesoro and others are lobbying for legislation that would protect station owners and refiners from lawsuits if E15 damaged a customer's engine or an underground storage tank.

EPA has approved the fuel for vehicles with model years 2001 and later, but not for older vehicles or other types of engines, such as boats or snowmobiles.

Trade groups including the American Fuel & Petrochemical Manufacturers have sued the EPA over that decision, arguing the agency does not have the authority to allow the fuel in some vehicles but not others. "Today's EPA announcement represents yet another in the agency's unwise, premature and irresponsible series of actions in its rush to force E15 to the marketplace," said Charles Drevna, president of the fuel manufacturers group.

Scott Zarembo, owner of Zarco 66, a gas-station and convenience store business with nine Kansas locations, said he was ready to sell "locally produced" E15, and his station already had the equipment on site to do so.