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March 12, 2013
E15 decision appealed to Supreme Court

The Grocery Manufacturers Association (GMA) and the American Petroleum Institute (API) and 15 other industry associations have petitioned the U.S. Supreme Court to rule on a lower court decision that upheld an EPA action intended to increase the use of ethanol in transportation fuel. 

The case concerns EPA decisions in 2010 and 2011 to grant partial waivers under the Clean Air Act (CAA) to allow gasoline with 15 percent ethanol content (E15) to be introduced into the transportation fuel supply for use in certain motor vehicles.  The waivers were granted in response to requests from dozens of companies involved in ethanol production.   

The GMA and other members of a “food group” and the API and other members of a “petroleum group” joined forces to petition the U.S. Court of Appeals for the D.C. Circuit to nullify the EPA waivers.  The groups contended that the EPA lacks authority under the CAA to grant “partial” waivers approving the use of E15; that the EPA failed to provide sufficient opportunity for comment on certain aspects of its waiver decision; and that the regulatory record does not support EPA’s decision to grant the partial waivers. 

Each of the petitioners claimed that it has standing to bring the case against the EPA because it would suffer economic harm as a result of the waivers.  For example, the food group claimed the waivers would increase diversion of corn crops into ethanol production, decrease the amount of corn needed for the food supply, and thereby increase all costs associated with food production. 

Harm not demonstrated

In a 2-to-1 decision, the D.C. Circuit denied the petition.  Mainly, the majority was unconvinced that any petitioner had demonstrated that it suffered economic harm because of the waivers and therefore failed to establish the standing needed to pursue its claims against the Agency. 

In a dissent, Judge Kavanaugh stated that the petitioners had indeed showed that the waivers resulted in harm that the court is empowered redress.  For example, Kavanaugh believes the E15 waiver loosens a prohibition on gasoline and ethanol producers and thereby harms entities such as the food groups that directly compete with gasoline and ethanol producers in the upstream market for purchase of corn.

40 percent of corn for ethanol

In announcing the petition to the Supreme Court, API’s Robert Greco stated:
“We’ve filed this petition because the D.C. Circuit incorrectly concluded that none of the 17 petitioners had standing to challenge the E15 partial waivers – not the engine manufacturers whose products will run on this new fuel blend, not the petroleum industry who must undertake massive infrastructure changes to accommodate the blend and meet the renewable fuel mandate, and not the food producers who now face significantly greater competition in the commodities market for corn, the conventional feedstock for ethanol.”

Speaking for the GMA, Louis Finkel pointed out that 40 percent of corn production acreage is now devoted to ethanol production.  “The [D.C. Circuit’s] decision effectively increased demand for a crop that was already in extremely short supply, thanks to Mother Nature and an unworkable RFS policy,” said Finkel. 

“The available supply and price of corn and other affected commodities has an enormous impact on the cost inputs to food production.  And as hard as food and beverage companies work to deliver safe, nutritious food to consumers at affordable prices, the laws of economics dictate that consumers will feel the effects of these higher input costs at the retail level.”

Click here for the D.C. Circuit’s opinion in Grocery Manufacturers Association et al. v. EPA.

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