Legal challenge to EPA’s E15 scheme picks up steam

The Environmental Protection Agency’s (EPA) plans to allow a controversial blend of gasoline and ethanol to be sold in the U.S. could be headed for rough legal sledding.

Federal appeals court judges recently heard a challenge to the Obama EPA’s approval of E15, a blend of 85 percent gasoline and 15 percent ethanol, to be sold in cars from the model year 2001 and newer. EPA claims it has the power under the Clean Air Act (CAA) to grant waivers allowing the sale of the new blend in certain vehicles. Currently, ethanol is not allowed to comprise more than 10 percent of the fuel when it is blended with gasoline sold at the pump.

EPA’s move is vigorously opposed by the food and livestock industries. They contend that EPA has no such authority under the CAA, and that diverting corn from food and feedstock to fuel will drive up food prices for producers and consumers. Manufacturers of engines and auto parts also oppose EPA’s plans, arguing that higher concentrations of ethanol in fuel will damage engines and expose manufacturers to lawsuits from angry customers. Trade associations representing these industries have brought suit against the agency.

At a hearing before a three-member judicial panel of the U.S. Court of Appeals for the District of Columbia in mid-April, EPA, represented by a Justice Department attorney, faced tough questions. Two legal issues need to be resolved. First, do the groups suing EPA have “standing?” If so, the case against the agency can proceed. Secondly, does the CAA give EPA the power to grant waivers for certain vehicles but not for others? The tough questions the three judges posed to the attorney representing EPA indicated that they are deeply skeptical of the agency’s position. EPA says that a study carried out by the Energy Department and other data sets it has examined lead it to believe it can grant the waivers, without doing harm to the engines of the newer vehicles it is targeting. Not only do the plaintiffs dispute this, they also say that E15 sold at the pump will inevitably make its way into older cars for which it is not intended.

“You’ve got an excellent argument on the merits,” Chief Justice David Sentelle told the plaintiffs. “My problem is getting there.” (Greenwire April 17) By “getting there,” he meant whether the plaintiffs will be granted standing to pursue the case. The issue of standing is expected to be resolved in a few months.

Corn ethanol’s once unassailable position in Washington has eroded in recent years. The generous subsidy ethanol enjoyed for decades was terminated at the end of 2011. Ethanol survives in the marketplace primarily as a result of a congressional mandate for renewable fuels contained in a 2007 statute. Cellulosic ethanol, which received generous loan guarantees from the Energy Department, has been a spectacular commercial failure. Not a single drop was manufactured for sale in the U.S. in 2011.

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About the Author: Bonner Cohen, Ph. D.

Bonner Cohen, Ph. D.

Bonner R. Cohen, Ph. D., is a senior policy analyst with CFACT.