IER Comment on proposed Modification to Fuel Regulations: Provide Flexibility for E15

The following comment was submitted by Kenneth Stein, Director of Policy, on behalf of the Institute for Energy Research regarding Docket No. EPA-HQ-OAR-2018-0775-0002

The Institute for Energy Research strongly opposes this proposed rulemaking. The EPA assertion of authority for taking this proposed action fails for the below reasons. Should EPA seek to move forward with this rulemaking, the reviewing court should find EPA actions unlawful as in excess of statutory jurisdiction, authority or limitations with regard to the attempted amendments to 42 U.S.C. 7545 (h)(4) and as an abuse of discretion with regard to newly broadened waiver authority claimed from 42 U.S.C. 7545 (f)(4).

Whatever the political desires of the current administration, the plain language of existing statute conflicts with the interpretations and authorities asserted in this proposed rule. The proper venue for the statutory amendments sought in this rulemaking is the constitutional legislative process.

EPA seeks to unilaterally amend statute.

Simply put, the proposed rule effectively purports to read the specific term “10 percent” out of statute. 42 U.S.C. 7545(h)(4) (hereafter (h)(4)) provides for an ethanol waiver of 1 psi above the otherwise generally applicable Reid Vapor Pressure (RVP) limits. This waiver is available for “For fuel blends containing gasoline and 10 percent denatured anhydrous ethanol,” language passed by Congress into law in 1990 with the Clean Air Act (CAA) amendments. Since then, this 10 percent language has been uniformly interpreted as a maximum threshold for ethanol blends which qualify for this RVP waiver.

However in this proposed rule, EPA now arbitrarily announces that this 10 percent, which has always been understood as a maximum, shall now be considered a minimum. EPA now asserts that “10 percent” is ambiguous, even though for nearly 30 years that term has not been so understood. EPA offers no rational or textual basis for this reinterpretation, because there is none. This is an arbitrary political decision, not one based on a genuine belief that the 30-year long interpretation was mistaken.

EPA gives away its intent quite clearly in that it does not even attempt to resolve a glaring logical flaw in its claimed new interpretation. If the term “10 percent” is now to be a minimum for ethanol blends, as this proposed rule asserts, then surely blends below 10 percent must now no longer be able to receive the benefit of the RVP waiver. But instead, EPA asserts both blends below 10 percent that previously qualified AND blends above 10 percent will qualify for the RVP waiver. So this proposed rule asserts that the 10 percent referred to in statute is now both a minimum AND a maximum. This proposed granting of a waiver for ethanol blends from 9-15 percent ethanol cannot be reconciled with the plain language of the statute. In this rulemaking EPA is asserting a line item veto, the power to simple cross out “10 percent” from statute.

Asserting ambiguity does not grant EPA the power to amend plain language.

While EPA claims ambiguity in the text, even if such ambiguity exists, it does not hand EPA the power to disregard the plain text of statute. EPA asserts that it is redefining the statute to mean that 10 percent is a minimum threshold. However, it also asserts that 9 percent ethanol blends will continue to qualify for the waiver. EPA cannot have it both ways. If there is ambiguity as to whether 10 percent is meant to be a maximum or a minimum, then EPA must pick one. Instead, EPA’s interpretation treats 10 percent as neither a maximum nor a minimum. As stated above, the practical effect is that EPA simply deletes 10 percent from the statute. This is impermissible; a dubious assertion of ambiguity does not grant EPA extraordinary power to amend statute.

The EPA’s claim of amending its own regulations is irrelevant.

If as EPA contends, the 1990 CAA amendments codified existing EPA regulations, then the “10 percent” referred to in (h)(4) must refer to a ceiling of 10 percent, given that is what regulations were at the time. In its own proposed rulemaking, EPA therefore confirms that the intent of Congress when the 1990 amendments were passed was to set 10 percent as a ceiling. That EPA now wishes to change its regulations in this area does not retroactively change what Congress believed it passed in 1990. The statute does not read, “Whatever blend of ethanol EPA determines appropriate.” It reads 10 percent. Congress must have meant something by that 10 percent. EPA’s longstanding understanding of this provision is that it meant a codification of the 10 percent limit, an understanding that EPA admits in this proposed rule.

If EPA admits that the 1990 CAA amendments codified the existing 10 percent waiver threshold, then that is the end of the discussion. By codifying those regulations, Congress superseded the agency’s regulatory discretion. EPA’s proposal to alter those preexisting regulations is irrelevant to the discussion of what the text of the statute clearly states.

EPA asserts an entirely new, unilateral authority to waive RVP regulations.

In this proposed rule, EPA effectively reads the waiver provision from 42 U.S.C.7545 (f)(4) (hereafter (f)(4)) essentially as a blanket waiver from RVP regulations. Under this proposed interpretation, EPA can by its own determination approve any blend of ethanol in gasoline through (f)(4), because EPA asserts in this proposed rulemaking that an (f)(4) waiver automatically creates a waiver from RVP limitations. In order for this interpretation to be correct, EPA must be claiming that Congress intended for (f)(4) to effectively mean that RVP limitations do not apply to ethanol blends. To so state this is to show that EPA’s interpretation is obviously incorrect, if Congress meant to exempt ethanol blends from RVP limitations, it could have and would have plainly said so. Instead, Congress only included granted a waiver to a certain kind of ethanol blend. This reference must mean something, however the current proposed interpretation by EPA asserts that Congress did not mean what it plainly said.

Indeed it is not clear why EPA stops at E15. Under this proposed interpretation, all ethanol blends could receive the RVP waiver, subject only to an (f)(4) waiver approval.

EPA’s assertion of changed circumstances is not a magic trump card that allows statute to be disregarded.

The ethanol industry asserts, and EPA accepts uncritically, that the language of the statute is outdated because in 1990 E15 was not a possible product. However, this argument only serves to confirm that Congress could not have meant for 10 percent to be a minimum if the only product they could have been offering a waiver to was blends of up to 10 percent ethanol. EPA’s current proposed interpretation suggests that Congress meant to not make a waiver available to the only existing product of the time (i.e. up to E10).

Further, if a statute is outdated, it is up to Congress to update it. There are many who would argue old laws such as the Jones Act or the Antiquities Act are similarly outdated. However until Congress acts to amend those statutes, they remain effective no matter the perverse outcomes. The Constitution does not give the president or his officers the power to unilaterally amend laws that he determines to be outdated. 

Congressional action confirms that 10 percent is a maximum threshold.

While EPA strains to find language in legislative deliberations indicating otherwise, the understanding of Congress is made quite clear by subsequent action. In the last ­­­­ several Congresses, legislation has been repeatedly introduced to extend the existing ethanol waiver to E15. Indeed, this legislation has been supported and promoted by the ethanol industry and introduced and co-sponsored by legislators supportive of the industry. This makes clear that Congress understood and understands that the language of the statute does not allow blends greater than 10 percent ethanol to benefit from the RVP waiver.

Conclusion: lawlessness

The EPA’s proposed reinterpretation of 42 U.S.C. 7545 is nothing short of lawless. This proposal asserts that language Congress specifically passed into statute, and which EPA admits was passed with a specific understanding, was not, in fact, meant so and should be disregarded. This proposed rulemaking is a usurpation of Congress’s legislative power guaranteed by the Constitution. EPA is bound to enforce the law as written; it cannot unilaterally amend statute based on the political preferences of the current executive. EPA can and should abandon this illegal regulatory adventurism.

The post IER Comment on proposed Modification to Fuel Regulations: Provide Flexibility for E15 appeared first on IER.