Ethanol Petitions Supreme Court on E15

Growth Energy Tells Court It's Last Chance to Get it Right on Ethanol Ruling

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Growth Energy asked the Supreme Court on Monday to consider an appeals court ruling that vacated a rule that allowed year-round E15 sales. (DTN file photo)

LINCOLN, Neb. (DTN) -- Growth Energy asked the Supreme Court to consider whether EPA has the authority to allow year-round E15 sales, in a petition filed with the court on Monday, arguing the U.S. Court of Appeals for the District of Columbia Circuit erred in vacating the E15 rule.

E15 fuel is 15% ethanol, 85% gasoline. The E15 rule had prohibited from June 1 through Sept. 15 the sale of higher ethanol blends with their higher volatility to lower smog in summer.

The ethanol group's petition comes about a month after the D.C. Circuit rejected an ethanol industry request for a full re-hearing before that court. The D.C. court vacated the E15 rule in July, ruling the so-called Reid-vapor pressure waiver rule that opened the door for E10 does not apply to E15. Reid vapor pressure is a measure of the volatility of gasoline.

"It is imperative that this court reject the court of appeals' interpretation and do so in this case," Growth Energy said in its petition. "The decision below effectively bars E15 from being sold during the summer. The direct harm from those lost sales is significant in its own right, but the potentially lost economic, health, environmental, and security benefits of increased ethanol use are much greater."

Growth Energy said the appeals court erred in its decision because it didn't apply the full reading of the statute used to allow E15 year-round sales.

"It is a 'fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme,'" the group said in its petition.

"This canon is essential because 'oftentimes the meaning -- or ambiguity -- of certain words or phrases may only become evident when placed in context.' Indeed, a 'provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.'"

Growth Energy said, as an example, courts "cannot interpret federal statutes to negate their own stated purposes. Applying these principles -- which the court of appeals failed to do faithfully -- yields the conclusion that Congress used 'containing gasoline and 10% ethanol' to refer to fuel blends with at least 10% ethanol."

Growth Energy said the appeals court's decision didn't provide "proper deference to EPA" and contradicted the will of Congress to promote the use of renewable fuels.

Further, the group said in a news release the decision "would suppress the expansion of higher-blend renewable fuels in the future. Because the court of appeals held that the statute is unambiguous at Chevron step one, its decision forever forecloses EPA from re-adopting its interpretation.

"And no other court can ever address the issue because the D.C. Circuit has exclusive jurisdiction over this issue. Therefore, 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. If this court does not hear this case, the current presidential administration and all future ones will be bound by the decision."

A three-judge panel on the D.C. Circuit said in its July 2 opinion on a case brought by refining interests that the so-called Reid-vapor pressure waiver rule that opened the door to E10 sales originally does not apply to E15, even though the Trump administration declared the two blends to be substantially similar fuels.

The groups said the D.C. Circuit's ruling "conflicts" with the Supreme Court and previous rulings in the circuit and "defeats" the intent of Congress to expand ethanol use.

Original restrictions on the sale of E15 were based on concerns about ozone pollution.

SECOND LEGAL SETBACK FOR BIOFUELS

The E15 ruling was one of two legal setbacks for the biofuels industry this past summer. The Supreme Court sided with refiners in a small-refinery exemptions case.

In October 2018, then-President Donald Trump directed EPA to allow year-round sales of E15.

Back in May 2020, the American Fuel and Petrochemical Manufacturers challenged EPA's action. The group argued that E15 is not a fuel substantially similar to E10, that the Reid vapor pressure waiver does not apply to blends higher than E10, and that the agency did not have the authority to "reopen" E15 waivers it granted for use in vehicles 2001 and newer.

On Aug. 21, 2020, the three groups filed a brief as intervenors in the oil industry's lawsuit.

The brief made the case that EPA's position on parity in RVP waiver regulations for E10 and E15 is consistent with the provisions of the Clean Air Act and the congressional intent behind those provisions.

The organizations argued extending the RVP waiver from E10 to E15 is appropriate because the volatility of the fuel decreases as more ethanol is added into gasoline beyond E10. RFA, Growth Energy, and NCGA also participated in oral arguments for the case.

On Aug. 16, 2021, the three organizations filed a petition for a rehearing, asking the three-judge panel and the full court to rehear the case because the decision conflicted with legal precedent and would harm the biofuels industry and others.

Read the Growth Energy petition: https://growthenergy.org/…

Read more on DTN:

"Appeals Court Throws Out E15 Rule," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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Todd Neeley