JUDY WOODRUFF: Next: the changing requirements for ethanol in gasoline and bigger questions over its wider use in recent years.

Today, the Obama administration proposed cutting the amount of ethanol that would be blended into gasolinenext year. The Environmental Protection Agency cited better fuel efficiency among the reasons, saying the current mandatory levels are no longer appropriate.

Hari is back with that story.

HARI SREENIVASAN: The announcement comes, coincidentally, during a week when the Associated Press released an investigation into the environmental impact of increased U.S. corn production in recent years, much of it going to make ethanol.

Dina Cappiello is national environment reporter for the AP and co-authored their report.

So, let's put this change today in perspective. I think they wanted to take, what, three billion gallons of ethanol out of the fuel mixture? Is that a large amount?

DINA CAPPIELLO, AP: Well, it's actually three billion gallons of all renewable biofuels.

So, actually, for ethanol, which makes the bulk of our biofuel mandate, it's about 1.5 billion gallons. And what's significant about it is, obviously, this is an industry that wanted to see its portion grow. It was going to max out at about 15 billion gallons in a couple of years.

HARI SREENIVASAN: Yes.

DINA CAPPIELLO: What they did today was say 13 billion gallons for ethanol. Last year, this year, this current year, it's 13.8.

And it was a recognition that we're really reaching a point where, as gasoline consumption comes down, there's really no place to put it unless you're going to increase the percentage of ethanol in gasoline.

HARI SREENIVASAN: And that could change how a car performs if it's past a certain percentage, right?

DINA CAPPIELLO: Yes. Some engines struggle with anything above 10 percent, which is what the vast majority of our fuel is blended with now.

HARI SREENIVASAN: Did they just not see this coming in terms of people using less gasoline? Did they just predict that there would be more gasoline, so let's add more biofuels into that mix?

DINA CAPPIELLO: Well, remember, this was in 2007. So, a lot has changed since 2007 since this law was passed.

I think that, for a couple years now, the oil industry has been arguing that what they call -- we call it a blend wall, is coming, and EPA might have to consider what to do with ethanol. Now, it's already, previous to this announcement today, this proposal today, had lowered for quite a few years the requirements forcellulosic, just because the industry has not taken off as fast as they expected.

HARI SREENIVASAN: So, this was -- it was a bipartisan-supported piece of legislation in 2007, and today we had the heads of the -- I think the House Energy Commerce Committee, a bipartisan kind of rolling back of the standards in support of the EPA today. What's changed?

DINA CAPPIELLO: What's changed is, I think, that we have seen, first of all, what ethanol has done on the ground is what our investigation looked at. As it helped increase corn prices, created a new market for corn, that has driven more planting, so there has been some real question about what its environmental impacts are and whether it's really as green as it was billed back in 2007.

And then it's just the difference in energy markets. The president today in his weekly address was talkingabout how, earlier this week, we are -- actually announced we produced more oil than we import for the first time. This is also an argument for reducing our dependence on foreign oil, but this since this law passed, we're reproducing oil like gangbusters.

HARI SREENIVASAN: So, what are some of those environmental consequences? Are we pulling more water out of the ground, so to speak, to make the land arable or to water the agriculture?

DINA CAPPIELLO: Well, I think the big one is just the land conversion. So, what our investigation found is not only has the push for ethanol helped drive farmland that was fallowed for conservation reasons to be converted into crop, but it also has helped convert native prairie lands that were never cropped.

That is a loss of habitat that actually releases greenhouse gases because grass store carbons, right. So do soils. So, as you till that land, you're actually -- there is a greenhouse gas footprint. Then, on thesemarginal lands really not meant for corn, you're increasing nitrogen use,the tilling, going back and forthon these acres, increase of gasoline use in the tractors that are used. All of this has environmental consequences.

HARI SREENIVASAN: Hasn't farming become more efficient over time? And some of the -- I think Chuck Grassley's office pushed back today and said, hey, we're actually using less fertilizer per bushel acre than weever were before.

DINA CAPPIELLO: Well, less fertilizer per acre, yes, but since this mandate came to be, we have planted 15 million more acres of corn.

So, take the per-unit out. In total, it's more fertilizer going on to cornfields, and that fertilizer in turn runs off into streams that are used for water supplies, runs off into the river, where it flows and helps produce the dead zone. So, yes, per acre, it is more efficient. But the bottom line, is we're, planting a lot more corn.

I mean, when this announcement came out today, Bob Dinneen of the Renewable Food Association said, we havefarmers out there in this country that planted 93 million acres of corn in preparation for this fuel source going up, not going down.

HARI SREENIVASAN: Right. Right.

What about some of the environmental groups now today that are trying to push back and say, listen, this is one of the cornerstones to fight climate change; you can't roll back on this?

DINA CAPPIELLO: I think what the concern is, is this, is that ethanol -- corn-based ethanol was always viewed as a bridge. Right?

And the administration has long said -- they have been steadfast in their support for this law, even though, obviously, they didn't sign it, but they were steadfast it was a bridge to a cleaner, greener fuel, which is the cellulosics from waste products.

I think what the concern of the environmental community is, is not really getting rid of corn ethanol, which they know has some environmental tradeoff, but is, what does that mean for the next generation of fuelsthat are better environmentally, that don't have these consequences that we exposed in our investigation?

HARI SREENIVASAN: All right, Dina Cappiello from the Associated Press, thanks so much.

DINA CAPPIELLO: Thank you.