WASHINGTON, May 24, 2017 - With questions swirling about whether the Trump administration will be more flexible on certain ethanol regulations than its predecessors, some in Washington are hoping for an end-around approach that would fix the matter on Capitol Hill.
Ethanol trade groups are pushing EPA Administrator Scott Pruitt to issue a waiver that would allow for the sale of fuel blended with up to 15 percent ethanol (E15) from June 1 through September 15. Currently, previous interpretation of the Clean Air Act is blocking such a waiver, but Pruitt told reporters earlier this month of a “statutory analysis that’s ongoing” that he hoped would conclude “very soon.” Pruitt added that he hoped “that we can get there – it’s just a matter of whether the statute permits it or not.”
Pruitt and the EPA have not signaled how that review process will conclude, and Growth Energy CEO Emily Skor told Agri-Pulse that she discussed the matter personally with Pruitt last week.
“Part of our conversation included that there are vulnerabilities, potentially, in how EPA could do it,” she said.
In 1990, an amendment to the Clean Air Act included waiver language for the sale of E10. That waiver was necessary because E10 had a Reid Vapor Pressure rating – a common measure of the volatility of gasoline – higher than the 9 pounds per square inch that was set as the ceiling for sale of fuel during the “high ozone season,” determined by the administrator to be between June 1 and September 15. Measured alone, ethanol and gasoline are both below that threshold, but the E10 combination rises above it.
That waiver gives a 1.0 psi exemption to E10 since that blend exceeds 9.0 psi, but ethanol industry representatives say E15 has a lower RVP than E10 because the RVP goes down as more ethanol is added. Since the waiver – [CAA § 211(h)(4)] – specifically references “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol,” some are concerned that a waiver from the administration would be ripe for a challenge in the courts.
“We want, ultimately, this to be determined by Congress or EPA, but certainly not in the courts,” Skor said. “The last thing that you want is a quick fix that would leave us vulnerable to litigation down the road.”
For its part, the Renewable Fuels Association doesn’t think a legal challenge to a potential waiver would have merit. While noting in a statement to Agri-Pulse that “EPA is sued on everything they do,” RFA said the “chances of a rule on this being overturned under the Chevron standard is slim to none,” a reference to the landmark Supreme Court establishing deference to agency interpretation.
In comments submitted on the administration’s regulatory reform executive order, RFA noted that it feels the CAA amendment does in fact give EPA the authority to extend the waiver to E15. The group said the “legislative language, legislative history and congressional intent all support EPA’s extension of the RVP waiver to E15.”
Perhaps in an effort to avoid the legal ambiguity that administrative action would bring about, both Growth Energy and RFA are supportive of the Consumer and Fuel Retailer Choice Act. That bill, introduced in identical language in the House and Senate in March, would write into law language allowing for blends of 10 percent “or more,” also providing a fix for blends higher than E15.
Sources tell Agri-Pulse lawmakers have secured a commitment for a markup for the bill in the Senate at some point this summer. Since June 1 is right around the corner, the odds of a fix to the issue for the summer of 2017 are slim. But, biofuel groups say, there’s always next year.
Chris Bliley, Growth Energy’s vice president of regulatory affairs, tells Agri-Pulse that after internal conversations with their legal team, Growth Energy has “refocused on the legislative effort because it is the most thorough and complete fix and it doesn’t get into any sort of ambiguity.”
“Even if you take the administrator’s recent comments, they’re looking at it; he didn’t commit that they could do it,” Bliley said. “This becomes a real problem on June 1, and we think we’ve got real momentum with the legislation.”