Governors' Biofuels Coalition

A federal appeals court today dismissed a lawsuit brought by oil, auto and food industries against U.S. EPA for its approval of E15, or gasoline blended with 15 percent ethanol.

In its decision, the U.S. Court of Appeals for the District of Columbia Circuit ruled that none of the petitioners has standing to bring the action against EPA.

“Because we hold that no petitioner has standing to bring this action, we dismiss all petitions for lack of jurisdiction,” Chief Judge David Sentelle wrote in his opinion.

The ruling represents a major victory for the ethanol industry, which petitioned EPA in 2009 to increase the amount of ethanol allowed in gasoline from 10 percent, as is commonly found in gas stations, to 15 percent. EPA approved E15 in October 2010 for use in cars from model years 2007 and later, and then in January 2011 approved the fuel for use in models made from 2001 to 2006.

The petitioners in Grocery Manufacturers Association v. EPA — three sets of industry groups representing oil refiners, auto engine manufacturers and food producers — argued that EPA prematurely approved E15 and did not have the authority to grant partial waivers or to allow some vehicles to use the fuel and to restrict it in others.

In oral arguments in April, attorneys for the trade groups had said that EPA’s actions would harm their members.

The plaintiffs include the Grocery Manufacturers Association, American Petroleum Institute, American Meat Institute, National Pork Producers Council, National Turkey Federation, Alliance of Automobile Manufacturers, National Marine Manufacturers Association, Outdoor Power Equipment Institute and National Petrochemical & Refiners Association.

In his 17-page ruling, Sentelle said none of the petitioners’ arguments was adequate to meet the legal-standing doctrine, which requires petitioners to show they suffered injury traceable to EPA’s decision and that could be redressed by a favorable court ruling.

The engine group, which argued that the introduction of E15 may damage vehicles not approved under EPA’s partial waiver, “advances a convoluted theory of standing,” Sentelle wrote.

He said the auto trade associations did not establish that E15 will actually damage the engines of vehicles not approved for E15, subjecting them to liability. Sentelle also found the group of petitioners did not provide substantial evidence that consumers would “misfuel,” or fill up vehicles not approved for E15.

Sentelle also wrote that the petroleum group’s liabilities and costs of dealing with E15 cannot be traced back to EPA’s waiver decisions. Those groups had argued that the costs would be substantial and that the renewable fuel standard — which mandates certain levels of ethanol use each year — would effectively force them to use E15

Sentelle dismissed that argument, writing that EPA’s approval of E15 merely gives refiners the choice of using the fuel.

“EPA’s approval of the introduction of E15 for use in certain vehicles and engines, does not force, require, or even encourage fuel manufacturers or any related entity to introduce the new fuel,” Sentelle wrote. “It simply permits them to do so by waiving the [Clean Air Act’s] prohibition on introducing a new fuel that is not substantially similar” to fuels already on the market.

The final group of petitioners, those in the food industry, argued that EPA’s approval of E15 would increase the production of corn ethanol, thus driving up the price of corn used in food production.

In his opinion, Sentelle wrote that food producers failed to establish a relationship between that argument and the language in the Clean Air Act that allows EPA to grant fuel waivers.

The food group’s “interest in low corn prices” is far removed “from a provision about cars and fuel,” Sentelle wrote.

“Standing is not self-evident for any of the entities petitioners represent,” Sentelle concluded. “EPA’s waiver decisions do not on their face directly impose regulatory restrictions, costs or other burdens on any of these types of entities.”

Sentelle wrote nothing about the merits of the petitioners’ case, but during oral arguments in April, he and the two other judges on the panel — Brett Kavanaugh and David Tatel — seemed to side against EPA (Greenwire, April 17).

In a dissenting opinion today, Kavanaugh argued that all the groups did present adequate arguments to establish standing and that EPA overstepped its statutory authority by issuing a partial waiver for a fuel blend for the first time in history.

Reactions

Growth Energy, which had originally petitioned for E15 in 2009 and intervened in the case on EPA’s side, today applauded the court’s decision.

“Today the U.S. Court of Appeals appropriately rejected multiple legal challenges to the introduction of E15 into the commercial marketplace,” said Tom Buis, CEO of Growth Energy. “This decision is a win-win for both the American consumer and our nation.”

Other ethanol trade groups also cast the ruling as a win for consumers. Bob Dinneen, president and CEO of the Renewable Fuels Association, said the addition of E15 at gas stations would give consumers more fuel choices.

“Ethanol has a 30-year track record of safe and effective use in the marketplace, and that record will continue,” he said. “Allowing for additional ethanol use will help lower prices at the pump, create domestic jobs and accelerate the commercialization of new biofuel technologies.”

API cast the court’s decision as a loss for consumers, pointing to an oil industry-funded study released earlier this year that found E15 would cause mechanical problems in popular cars (Greenwire, April 4).

“EPA’s decision was premature and irresponsible, and consumers could bear the burden,” Bob Greco, API’s downstream group director, said today in a statement.

He added, “It is astounding that the court does not accept that refiners, who must comply with the ethanol mandate, have standing to bring this case.”

Last month, the Court of Appeals for the D.C. Circuit also rejected a lawsuit by livestock industries over EPA’s regulations exempting older ethanol plants from demonstrating the fuel they produce results in lower greenhouse gas emissions compared with fossil fuels.

The court found then that those petitioners also did not have standing to bring the challenge (Greenwire, July 20).

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