Brett Kavanaugh could be good for ethanol

Source: By John Siciliano, Washington Examiner • Posted: Tuesday, July 10, 2018

President Trump’s nomination of Judge Brett Kavanaugh to the Supreme Courtcould be good news for the ethanol industry and clean energy programs where adherence to the law is often challenged.

Trump said Kavanaugh, in his twelve years as a judge on the D.C. Circuit Court of Appeals, has demonstrated his ability to “set aside” political views “to do what the law and the Constitution require.”

It isn’t entirely clear, but that might have been the message Trump was trying to convey to Sen. Joni Ernst, R-Iowa, just hours before Monday’s announcement. He told the senator and a group of Iowa state officials in her office that they are going to “love” his court nomination.

Trump called Ernst, who promptly put him on speaker, to discuss ethanol and trade, said an aide privy to the call. He ended the talk by saying, “You’re gonna love the Supreme Court nominee,” the aide told the Washington Examiner.

Ernst had just finished a 99-county tour of Iowa, a giant among the farm states for ethanol and agriculture products, where she heard concerns about how Trump’s tariffs are posing problems for farmers by driving up costs.

Ernst has also led the charge against former EPA chief Scott Pruitt’s mismanagement of the ethanol program, which had stoked the ire of farmers and the ethanol industry, who sued Pruitt over his granting of waivers to oil refiners. The waivers exempted them from having to blend ethanol in order to manage the cost of abiding by the regulation.

This is where Kavanaugh could be good for the ethanol industry, if the regulation goes to the Supreme. His previous rulings also show that he does not always act in favor of fossil fuel companies as environmental groups argue.

Kavanaugh, in one of his first decisions on the ethanol program under Trump, rejected all arguments by oil refiners and renewable fuel groups alike, except one, in Americans for Clean Energy, et al., v. EPA and Scott Pruitt almost one year ago on July 27.

“We reject all of those challenges, except for one: We agree with Americans for Clean Energy and its aligned petitioners that EPA erred in how it interpreted the ‘inadequate domestic supply’ waiver provision,” Kavanaugh wrote in penning unanimous three-judge decision.

He ruled that EPA did not have the authority to apply the supply waiver as it had done in setting the annual Renewable Fuel Standard in the preceding year, and must therefore redo the fuel targets under the correct interpretation of the law, which was a victory for ethanol supporters.

Kavanaugh wrote that the law “does not allow EPA to consider the volume of renewable fuel that is available to ultimate consumers or the demand-side constraints that affect the consumption of renewable fuel by consumers.”

The only authority that EPA has in reducing the amount of ethanol and renewable fuel refiners can blend is if there is a lack of supply of corn ethanol. This was not the case for either the 2015 or the 2016 annual biofuel requirements.

“We therefore grant Americans for Clean Energy’s petition for review of the 2015 Final Rule, vacate EPA’s decision to reduce the total renewable fuel volume requirements for 2016 through use of its ‘inadequate domestic supply’ waiver authority, and remand the rule to EPA for further consideration in light of our decision,” Kavanaugh wrote.

In that ruling, he said the oil industry and refiners arguments were not strong enough to be granted regulatory relief from having to abide by the Renewable Fuel Standard.

Kavanaugh considered arguments by the oil refiners challenging EPA’s “neutral aim” and “accuracy” in setting the annual target for liquid cellulosic biofuels. They also raised “several arbitrary and capricious challenges to EPA’s decisionmaking” on the 2016 Renewable Fuel Standard annual targets. But none the arguments persuaded the court.

“None of their arguments has merit,” Kavanaugh wrote.