Court to hear arguments in lawsuit challenging EPA on E15 approval

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, April 17, 2012

Attorneys for automobile, oil and food trade groups will argue in federal court today that U.S. EPA exceeded its authority in approving the sale of the ethanol-gasoline blend E15.

At issue in the U.S. Court of Appeals for the District of Columbia Circuit are lawsuits that call for vacating EPA’s approval of E15, gasoline blended with 15 percent ethanol.

EPA, they say, prematurely approved E15 and did not have authority to allow some vehicles to use the fuel and to exclude others.

“Collectively, we are urging the EPA to slow this process down and consider the serious damage that E15 has been proven to cause within our industries,” the groups challenging EPA said in a statement to Greenwire.

EPA approved the 15 percent blend in October 2010 for use in passenger vehicles from model years 2007 and later. The agency approved E15 for use in models from 2001 to 2006 in January 2011.

Since then, EPA has approved a label and plan aimed at preventing the “misfueling” of vehicles not approved for E15. The agency recently announced the first registrations of companies allowed to produce ethanol for the blend (E&ENews PM, April 2).

The challengers maintain the Clean Air Act does not give EPA the authority to grant a partial waiver to allow a fuel blend in the U.S. market. Testing showed E15 was not compatible with older cars or engines for boats, snowmobiles and other small vehicles

According to court documents filed by the challengers, EPA can only grant a waiver after determining a fuel or fuel additive “will not cause or contribute to a failure of any emission control device or system.”

“The [EPA] Administrator issued unprecedented ‘partial waivers’ covering only certain engines and vehicles, and not others,” the groups wrote in a brief filed with the D.C. Circuit. “‘Any’ means any. It does not mean some, or part.”

Among the plaintiffs: 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.

The auto trade groups have broadly opposed E15 on the basis that it damages car engines, while the food and livestock associations worry that E15 will spur increased production of corn ethanol and drive up the price of livestock feed.

The groups are also contending that EPA does not have robust test results and that it failed to comply with the proper procedure for granting a petition for a fuel blend.

Growth Energy, a biofuels trade group that filed the original petition to allow E15 into the marketplace, failed to provide adequate data for EPA, the groups say. Challengers are expected to argue tomorrow that EPA was not allowed to supply extra data under the rules for granting petitions.

DOE test

They will further argue that a test by the Department of Energy produced vehicles that had failures with E15.

“DOE’s limited testing data showed vehicle and engine failures in the very model years for which EPA was seeking to approve E15,” the groups argue in their brief, “but the agency used statistical sleight of hand in an attempt to argue those failures away.”

The trade groups are also arguing that EPA shirked due-process requirements by not opening for public comment a final study on E15’s effect on vehicles and that EPA did not ease concerns about vehicles misfueling with the blend.

Ethanol groups argue that E15 does not harm car engines.

“Quite frankly, the EPA has been on solid statutory ground from Day 1 on E15,” said Bob Dinneen, president and CEO of the Renewable Fuels Association. “It has had the most robust testing of any fuel in the history of the Environmental Protection Agency. We feel very confident about the court challenge.”

EPA did not respond to requests for comment for this story, but the agency has previously defended its E15 approvals.

Two weeks ago the agency approved the first 20 applications of producers wishing to make ethanol for the fuel. The industry expects the fuel will first appear in Iowa and Illinois because of state laws that encourage its sale.

But although E15 is well on its way to the market, the lawsuit is among several hurdles it still needs to overcome before sale begins in the United States.

Other barriers include state prohibitions, such as in Missouri, where a mandate requires the use of E10, or gasoline blended with 10 percent ethanol.

EPA has also signaled it won’t provide a waiver from regulations that govern the maximum vapor pressure allowed by a fuel, such as it does with E10. Such limits would go into effect in the summer months to reduce smog and air pollution.

Retailers and blenders must also still complete a fuel survey and comply with labeling requirements before E15 can be sold.