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Big Oil joins farmers, biofuel groups to tout more ethanol in U.S. fuel

By Stephanie Kelly

NEW YORK, Nov 21 (Reuters) - A group of oil, renewable fuel and farm trade organizations have joined together for the first time to voice support for U.S. legislation that would expand nationwide of E15, a higher ethanol-gasoline blend, according to a letter from the group.

Organizations including the American Petroleum Institute (API), Renewable Fuels Association and the National Farmers Union wrote to congressional leaders to urge them to adopt legislation that would effectively lift restrictions on E15 sales.

API's support is a win for the biofuel and farm groups because the oil industry has at times resisted efforts to expand the market for ethanol.

U.S. Environmental Protection Agency (EPA) anti-smog regulations restrict summertime sales of E15, even though research has shown the higher percentage blend may not increase smog relative to the 10% blend called E10 that is now sold year-round.

Reuters reported this month that API began cooperating with the biofuels trade group after governors from major corn-producing Midwestern states requested the EPA allow for expanded sales of E15 in their states. The governors' proposal raised oil industry concerns about fuel regulations differing from state to state.

"By ensuring uniformity across the nation's fuel supply chain, federal legislation will provide more flexibility and result in more consistent outcomes than a state-by-state regulatory landscape," the groups said in a letter dated Monday.

Expanding national sales of E15 would also resolve long-standing differences among the groups about the fuel regulations, the letter said.

(Reporting by Stephanie Kelly; Editing by David Gregorio)

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