US energy group takes E-15 challenge to US Supreme Court

04 June 2013 23:46 Source:ICIS News

WASHINGTON (ICIS)--The American Petroleum Institute (API) said on Tuesday that it and other trade groups have asked the US Supreme Court to revoke the Environmental Protection Agency’s authorisation for a 15% ethanol blend in the nation’s gasolines.

The API joined livestock producers, food manufacturers and retail associations in asking the US high court to block rulings by the Environmental Protection Agency (EPA) in 2010 and 2011 authorising the use of E-15 fuels in automobiles manufactured in 2001 or later.

E-15 blends contain 15% ethanol and gasoline. Prior to the EPA E-15 rulings, US fuel retailers could sell only E-10 fuel blends containing up to 10% ethanol.

The API appeal to the US Supreme Court follows an August 2012 ruling by the US Court of Appeals for the District of Columbia that held that the API and its co-plaintiffs in the case did not have “standing” to challenge the EPA’s E-15 decision, meaning that they could not demonstrate harm to their industries by the EPA action.

But the API argues in its high court appeal that the E-15 ruling will impose “substantial new burdens” on it and other industries, including the costs of producing, introducing, transporting and selling E-15 blends.

On behalf of livestock and food producers, the appeal contends that those industries are injured by the EPA’s E-15 ruling by rising prices for corn due to the diversion of that grain crop from food to fuel production.

US ethanol output is almost wholly dependent on corn for feedstock, accounting for as much as 40% of the US corn crop in recent years.

The API also argued that, despite EPA assurances to the contrary, E-15 can damage engines and cause motor vehicles to break down, noting that US auto manufacturers have warned that they will not honour warranties if car buyers put E-15 in their vehicles.

The US Supreme Court could decline to hear the API appeal, in which case the appellate court ruling and the EPA’s E-15 mandate would stand.

If the high court should decide to consider the API appeal, a court hearing would likely be held later this year. If the justices - known as “the Supremes” - should find in favour of the API and its co-plaintiffs, the case would be sent back to the appellate court for a decision on the merits of the API complaint.

Joining API in the appeal to the Supreme Court were the Grocery Manufacturers Association, the American Frozen Food Institute, the American Meat Institute, the National Chicken Council, the National Council of Chain Restaurants, the National Pork Producers Council, the National Turkey Federation and the Snack Food Association, among others.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By Joe Kamalick