Court Fight Over Biofuels Mandate Intensifies as Hill Action Stalls

JOHNSTON, IA: A decal advertising E85 Ethanol is displayed on a gas pump at a Kum and Go gas station on August 7, 2012 in Johnston, Iowa. An exceptionally hot summer and the worst drought in more than a half century has caused cut prospects for the U.S. corn crop to a five-year low and has sent prices up to over $8.00 a bushel in late July trading. The price surge and limited supply has also prompted ethanol plants to voluntarily slow production by 20 percent, a two year low.
National Journal
Clare Foran
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Clare Foran
Nov. 5, 2013, 2:12 p.m.

As the En­vir­on­ment­al Pro­tec­tion Agency pre­pares to is­sue the 2014 fed­er­al man­date for bio­fuels pro­duc­tion later this month, EPA at­tor­neys con­tin­ue to fight what has be­come an an­nu­al leg­al battle over the re­new­able-fuel stand­ard, or RFS, set for the pre­vi­ous year.

The latest de­vel­op­ment in the on­go­ing lit­ig­a­tion is a re­quest by bio­fuel pro­du­cers to in­ter­vene in an oil-in­dustry law­suit chal­len­ging the 2013 RFS. The suit con­tends that EPA over­reached in set­ting the amount of cel­lu­losic bio­fuels, in­clud­ing corn eth­an­ol, to be blen­ded in the na­tion’s gas­ol­ine sup­ply this year.

“We want EPA to re­vise its meth­od­o­logy for de­term­in­ing the amount of cel­lu­losic bio­fuels re­quired by the RFS so that it ac­cur­ately pre­dicts what will be in the mar­ket­place rather than set­ting as­pir­a­tion­al tar­gets that don’t align with real­ity,” said Rich Moskow­itz, gen­er­al coun­sel for the Amer­ic­an Fuel & Pet­ro­chem­ic­al Man­u­fac­tur­ers (AFPM), a plaintiff in the case. “When EPA gets the num­bers wrong, it hurts re­finers. There can­not be un­cer­tainty in the mar­ket.”

But bio­fuels pro­du­cers worry that the law­suit could dis­mantle the man­date es­tab­lished by Con­gress in 2005 to help wean the coun­try off for­eign oil.

“If this law­suit al­ters the rule in any way, bio­fuels pro­du­cers will feel the im­pact of that the most; and there is no oth­er party that can ad­equately rep­res­ent our in­terests in this court case, so that’s why we’re ask­ing for the abil­ity to in­ter­vene,” said Paul Win­ters, com­mu­nic­a­tions dir­ect­or for the Bi­o­tech­no­logy In­dustry Or­gan­iz­a­tion. BIO, along with Growth En­ergy and the Re­new­able Fuels As­so­ci­ation, filed a mo­tion last Fri­day with the U.S. Court of Ap­peals for the D.C. Cir­cuit re­quest­ing the right to in­ter­vene in the case against EPA.

The law­suit chal­len­ging the 2013 re­new­able-fuel stand­ard was filed by AFPM; Mon­roe En­ergy, a re­finer owned by Delta Air­lines; and the Amer­ic­an Pet­ro­leum In­sti­tute, the trade as­so­ci­ation for the oil and gas in­dustry. The in­dustry groups con­tend that the amount of cel­lu­losic bio­fuels set by the stand­ard is high­er than the mar­ket can sup­ply.

If the mo­tion is gran­ted, the bio­fuels pro­du­cers will be al­lowed to square off against the oil and gas in­dustry in court, with the abil­ity to re­spond dir­ectly to ar­gu­ments brought against EPA in set­ting the stand­ard.

This isn’t the first time the man­date has faced leg­al chal­lenges, and it likely won’t be the last. The Amer­ic­an Pet­ro­leum In­sti­tute con­tested the 2012 RFS rule-mak­ing, while AFPM chal­lenged the 2011 stand­ard.

The ac­tion in fed­er­al court comes as le­gis­la­tion to re­vise the re­new­able-fuel stand­ard is stalled in Con­gress. A num­ber of law­makers — in­clud­ing Reps. Bob Good­latte, R-Va.; Jim Costa, D-Cal­if.; Peter Welch, D-Vt.; and Steve Womack, R-Ark. — have put for­ward pro­pos­als to amend the stand­ard, but so far the House has taken no ac­tion, not even in com­mit­tee.

And as in­ac­tion be­comes the new nor­mal on Cap­it­ol Hill, ad­vocacy or­gan­iz­a­tions may in­creas­ingly turn to lit­ig­a­tion as their best hope for chan­ging fed­er­al policy.

“You’re see­ing a rise in either ac­tu­al lit­ig­a­tion or the threat of lit­ig­a­tion,” said Joshua Ro­sen­stein, a coun­sel with the Wash­ing­ton law firm Sand­ler Re­iff Young & Lamb. “Ad­vocacy groups are be­ing sty­mied be­cause the gov­ern­ment hasn’t been do­ing much and they’ve had to get cre­at­ive; and one of the things I’ve heard people talk­ing about across the in­dustry is seek­ing policy changes through the courts.”

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