WASHINGTON (Dow Jones)–A study conducted by the U.S. Department of Energy shows that cars can run on gasoline with a much higher ethanol component than the 10% blend now being sold at pumps across the country, DOE Secretary Samuel Bodman said Tuesday.

Thirteen different “late-model” cars were tested using gasoline that was 15% and 20% ethanol, Bodman said, and the results were “very encouraging.”

The feasibility of cutting gasoline even further to boost the ethanol content is important, Bodman said, because in a few years ethanol production will hit a growth ceiling in supplying enough fuel for 10% blends, also called E10.

“The E10 market will likely reach saturation in a few years,” Bodman said. “There are some parts of the United States, like the Midwest, where that has already occurred.” Tom Buis, president off the National Farmers Union, called the DOE study results “good news.”

Ethanol is made in the U.S. from corn, and a growing segment of the farm sector is fueled by ethanol demand. A higher ethanol blend in gasoline would mean stronger demand for the corn-based fuel by gasoline producers.

The results of e study released on Tuesday may be encouraging, Bodman said, but he also cautioned that much more research on a wider variety of vehicles is necessary.

We know this already, … there is experience in Brazil. The point remains not the technical feasibility running cars on ethanol, but the economic and financial costs of mandating ethanol use. Bottom line - cars can run on ethanol, but the economy can’t afford ethanol!!