D.C. Court Throws Out E15 Lawsuit on a Technicality

AutoInformed.com

At the heart of the controversy are the costs of installing E15 pumps at gas stations, which already are selling fuel with E10, as well as warranty costs at automakers, where typically powertrains are now covered for 100,000 miles if E15 damages engines, as some studies show it does.

The U.S. Court of Appeals for the D.C. Circuit has dismissed petitions challenging the Environmental Protection Agency’s partial waiver allowing gasoline with 15% ethanol or E15 in 2001 and newer model vehicles. Federal law establishes a renewable fuel mandate that requires gasoline producers to introduce significant amounts of renewable fuel such as ethanol into the Nation’s gasoline supply.

The suit brought by trade associations whose members are part of the petroleum and food industries, filed petitions for review of two EPA decisions approving the introduction of E15. The Court’s majority did not deal with the legal issues involved, it simply dismissed the petitions for so called lack of jurisdiction, meaning the trade groups do not have a legal standing before the court. A dissenting opinion, though, said the EPA’s decision to grant a partial waiver was illegal because it could damage some existing vehicles.  Where this leaves E15 is not immediately clear. An industry trade group – Global Automakers said, “We are currently evaluating further legal options in the litigation.”

The politics here are tangled and influenced, well dictated, by big money industries. The food interests sued because of EPA’s E15 waiver will increase ethanol production and demand for corn will rise significantly making corn prices will rise. Food producers, competing directly with ethanol producers in the market for purchasing corn, will have to pay more for corn.

Petroleum interests say that because of the E15 waiver and the statutory renewable fuel mandate,  those in the petroleum industry now must refine, sell, transport, and store E15, incurring significant costs to do so.

At the heart of the controversy are the costs of installing E15 pumps at gas stations, which already are selling fuel with E10, as well as warranty costs at automakers, where typically powertrains are now covered for 100,000 miles if E15 damages engines, as some studies show it does.

The technical debate around ethanol use involves the fact that it is indeed corrosive, potentially breaking down engine and fuel system seals. Ethanol is also harder to ignite, but once an engine is running, it burns at higher temperatures, potentially damaging engine and exhaust system components, including air-cleaning catalytic converters. It is also not as fuel efficient as gasoline because of its lower energy density. Worse, studies show that corn-derived ethanol takes as much energy to produce as is in the resulting fuel.

The problem for automakers and consumers comes from a regulation that applies to existing vehicles on the road, instead of a phase-in for future vehicles. While automakers are now building some vehicles that can safely run of blends containing up to 85% ethanol, millions of existing auto engines cannot use the fuel without potential harmful effects.

When President Bush and the Republicans passed the controversial Energy Independence and Security Act of 2007, the stated goal was to get to 20% of all fuel used by 2022 to come from U.S. made renewable fuels to free the U.S. from the ongoing national security issues caused by importing foreign oil from totalitarian and terrorist supporting nations.

This worthy goal was going to be helped in the original bill by the elimination of billions of dollars in taxpayer subsidies going to big oil, but not surprisingly in pay-to-play Washington, the subsidies remained when the final bill emerged from a closed conference committee meeting reconciling House and Senate versions.

Given decades of failed policies by both the Democratic and Republican parties going back to President Nixon designed to get the U.S. off imported oil, it is tough to be optimistic that something will actually be done by partisans in our bickering national government. (See President Obama outlines Energy Independence Plan, Touting Alternative Fuels, “Safe” Nuclear Power, 33% cut in Oil Imports) Politicians are now exclusively concerned with winning the next election and spending most of their time securing the funds necessary to finance what will no doubt be the most expensive election in history.

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About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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