Biofuels Group Asks High Court To Overturn Summertime Ban On E15 Fuel

Source: By Stuart Parker, Inside EPA • Posted: Tuesday, October 5, 2021

Biofuels advocacy group Growth Energy is asking the Supreme Court to review and overturn a ban on summertime sales of 15 percent ethanol fuel (E15), reimposed after a lower court struck down the Trump EPA’s approval of the blend, warning that high court review now is crucial to allow sales of E15 and higher ethanol blends in the future.

In its Oct. 4 petition, Growth Energy seeks high court review of the U.S. Court of Appeals for the District of Columbia Circuit’s July 2 ruling in American Fuel and Petrochemical Manufacturers, et al., v. EPA, which vacated the Trump EPA rule allowing year-round sales of E15.

The appeals court found that a statutory waiver from summertime restrictions on fuel vapor pressure only applies to the 10 percent ethanol blend (E10) that is now the national standard, and not to E15 or higher blends. Specifically, the D.C. Circuit found that the waiver only covers fuel “containing” exactly 10 percent ethanol.

The waiver allows for a 1 pound per square inch (psi) waiver from the general 9 psi limit on Reid vapor pressure (RVP) that exists to reduce ozone-forming air emissions during the summer driving season, from June 1 to Sept. 15.

Because the appeals court has refused rehearing and has exclusive jurisdiction over the rule, its decision forecloses EPA again arguing that the waiver could accommodate E15, shutting down a valuable market for ethanol producers, Growth Energy argues.

“The text, structure, and history of the ethanol waiver show that Congress intended it to apply to various ethanol blends to enable greater use of ethanol, and that in context, Congress intended ‘containing’ to mean ‘having at least,’” the petition says.

“The court of appeals’ interpretation, in contrast, necessarily attributes to Congress a self-defeating and bizarre intent: facilitating increased ethanol use as long as the specified volatility limits are met, yet foreclosing blends that have more ethanol than E10 from the market even if their RVP is no higher than E10’s or the specific limits,” the group says.

“Even if it were not clear that Congress intended ‘containing’ 10% ethanol to mean ‘having at least’ 10% ethanol, . . . the statutory provision would at most be ambiguous, and EPA’s interpretation would be a reasonable resolution of that ambiguity entitled to deference” under the Chevron legal doctrine, the petition argues.

“It is imperative that this Court reject the court of appeals’ interpretation — and do so in this case,” the petition says. “This petition presents the only opportunity for this Court to correct the court of appeals’ error and avert its serious harmful consequences. Because the court of appeals held that the statute is unambiguous and because the D.C. Circuit has exclusive jurisdiction to review EPA regulations” at issue, “there is no possibility of further percolation, a circuit split, or even a future decision from the D.C. Circuit that this Court could review.”

The D.C. Circuit’s position that the law is clear-cut in applying the waiver only to E10 acts as a roadblock to the summer sale of not only E15 but other, higher ethanol blends that EPA might approve. Ethanol advocates say that blends of E15 and above in fact have the same or lower RVP than E10, and hence are no more environmentally harmful.

Program’s Ambition

Biofuels advocates further point to the intent of Congress in establishing the Renewable Fuel Standard (RFS) in 2005 to progressively increase the amount of ethanol blended into the nation’s fuel supply each year, arguing that E15 is required to realize the program’s ambitions. At present, the blend represents only a very small percentage of total fuel sales. However, without the summertime ban, it could expand dramatically, Growth Energy says.

The group further notes similarities between the E15 case and a recent Supreme Court case also involving biofuels, HollyFrontier Cheyenne Refining., LLC v. Renewable Fuels Association, in which the high court in its June 25 ruling faulted the 10th Circuit for its rigid statutory interpretation of another common term, this time in connection with EPA’s grant of waivers to small refiners from RFS blending obligations.

In that suit, the high court rejected the 10th Circuit’s view that EPA unambiguously can only “extend” small refinery waivers to refineries that already held waivers from prior years. The high court instead found that the term “extension” can apply to the renewal of a waiver that has already lapsed, and that the Trump EPA’s position on the issue was correct. The Biden EPA, meanwhile, unsuccessfully switched positions to support the 10th Circuit’s view.

Technically, however, the 10th Circuit never applied the Chevron analysis to the Trump EPA’s grant of small refinery waivers at all, instead weighing the reasonableness of the agency’s actions under the older and less-deferential Skidmore standard.

“Tellingly, again much like ‘extension’ in HollyFrontier, neither the court of appeals nor the challengers have “point[ed] to a single dictionary definition of the term ‘[contain]’ requiring” that there be exactly the specified amount” of ethanol in fuel,” Growth Energy says.

Meanwhile, biofuels groups have sought other avenues to get around the D.C. Circuit’s ruling on E15. Some have backed bills by largely Midwestern lawmakers from ethanol-producing states to circumvent the ruling, although such provisions have not been enacted and face doubtful prospects in Congress, where support and opposition to biofuels is regional, rather than partisan.

And the Renewable Fuels Association in recent comments on an EPA light-duty vehicle greenhouse gas proposal suggested that EPA could use regulation to circumvent the D.C. Circuit ruling. EPA “should take action to effectively eliminate the relevance” of the waiver, RFA says, in a regulatory move limiting evaporative emissions from unblended gasoline that would create space for continued E15 sales in summertime while meeting federal air quality standards.

The agency “should use its authority to mandate that refiners market lower-RVP blendstocks for conventional gasoline in the summertime (i.e., 8.0 psi in [federal air standards] attainment areas) thereby allowing retailers to market a full spectrum of renewable fuel blends appropriate for use in a range of vehicle technologies,” RFA said. — Stuart Parker (