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E15 under fire on two fronts

One coalition takes its case to Congress while another considers undertaking a Supreme Court challenge to the EPA decision

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A coalition of organizations seeking to reform or repeal the Renewable Fuel Standard, which mandates the use of biofuels such as ethanol, is shopping legislation to Capitol Hill. At the same time, a separate coalition is leaning toward bringing a case to the Supreme Court, challenging the Environmental Protection Agency’s choice to allow E15 in the marketplace.

Representatives from organizations ranging from environmental groups and those concerned with hunger in developing nations to taxpayer watchdog groups and refinery representatives participated in a conference call in early February to discuss the negative effects of the EPA mandate that was passed in 2005 and strengthened in 2007. “We have drafted some legislation, and we’re circulating it on a limited basis,” Jim Currie, legislative director of the National Marine Manufacturers Association, said during the call. “We hope to get it introduced sometime in the near future.”

Currie hopes legislation will be introduced by the time of the American Boating Congress this spring. “At this point, we’re not prepared to say exactly what the legislation contains,” Currie says. “We are open to anything that will prevent the problems that we see looming out there as a result of E15 getting out into the marketplace. I don’t want to completely tip my hand at this point, but trust me, we are out working on the issue and plan to address it legislatively.”

The NMMA is also among the groups that will likely take the E15 case to the nation’s highest court.

Supreme Court push

“Based on the conversation so far, we are likely to be seeking a Supreme Court review,” says Cindy Squires, the NMMA’s chief counsel of public affairs and director of regulatory affairs. “We anticipate that at least one of those groups will most likely file. If that were to occur, we assume the other groups will follow suit.”

In January, the U.S. Court of Appeals for the District of Columbia denied a rehearing on the EPA decision that put fuel with 15 percent ethanol on the market. The groups have 90 days (until April 15) to decide whether to seek Supreme Court review of that decision. Dissenting Court of Appeals Judge Brett Kavanaugh says the EPA waiver “plainly violates” statutory text, according to court documents filed in January.

The groups involved in the court case are engine makers, several food organizations and the American Petroleum Institute.

The Supreme Court can decide whether it wants to hear the case, says Squires. If that avenue fails, the NMMA has a case involving the EPA’s misfueling plan, which requires the labeling of E15 so consumers aren’t confused, she says.

The NMMA contends that a small sign will not be enough to warn consumers about the higher concentration of ethanol and that some of the fuel will be left behind in the hose, causing other consumers to inadvertently get some into their tanks and gas cans. That case is on hold, pending a decision about the current E15 case, but it could be reopened.

“We’ve asked the court to hold that case because the facts are very similar to those involving the waiver,” says Squires. “They’re two different issues, but they are very intertwined in determining whether the EPA overstepped its authority. We want to make sure we protect boaters from inadvertently putting E15 in the tank and destroying their engine.”

Selling without labels

A survey found that 35 percent (six of 17) of the registered sellers of E15 are not labeling the higher-ethanol gas at the pump, says Squires. The survey also found that several service stations selling E15 were not registered, as required by the mandate, which calls for an overall reduction in the fuel supply through the use of biofuels. The sellers of E15 are in Iowa, Kansas and South Dakota. The survey, performed by RFG Survey Association Inc., did not name the retailers found not in compliance.

“After the gas stations were surveyed, it turned out six of those sites had not even put a basic warning label on the pump,” says Squires. “That’s very concerning to us. With all the scrutiny on E15, these sellers didn’t bother to even label the pump.”

RFG Survey Association Inc. was the result of the initial collaboration of the American Petroleum Institute, National Petroleum Refiners Association member companies and the EPA to determine whether the oil industry could develop a compliance program to meet the requirements outlined in the Clean Air Act Amendments for reformulated gasoline.

“When it comes to ethanol, the NMMA has done a number of government relations battles,” says Squires. “We always like to look at these types of battles as multipronged efforts. We’re very active about ethanol. We’re active in the courts, we’re looking at new legislative options, and we’re looking at state options, as well. There are many avenues, so we try not to leave any stone unturned.”

Currie says he’s optimistic about legislation gaining traction on Capitol Hill because so many groups are joining forces against the Renewable Fuel Standard. “Inertia is the hardest thing to overcome on Capitol Hill,” Currie says. “Once something is enshrined in statute, it is very hard to get it changed, especially when in a case like ethanol there is a significant cadre of members who support it. I am more optimistic now because of the breadth of groups that favor amendment of the RFS, if not its outright repeal. It seems evident that the RFS will be opened this year in Congress, and we want to be there as a party to its reconsideration.”

This article originally appeared in the March 2013 issue.

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