By Valerie Volcovici
WASHINGTON, Jan 15 (Reuters) - A U.S. federal appeals court
on Tuesday denied a request by food and oil groups that it
reconsider a decision upholding a federal measure allowing
gasoline to be mixed with a higher percentage of ethanol,
producing a blend known as E15.
The petitioners, led by the Grocery Manufacturers
Association and the American Petroleum Institute, requested a
rehearing after the U.S. Court of Appeals for the D.C.
circuit in August backed the Environmental Protection Agency's
approval of the 15 percent mix, an increase from the previous
maximum ethanol blend of 10 percent.
The lobbying groups said that the higher ethanol blend in
gasoline could cause damage to car engines and fuel systems,
resulting in costly repairs for consumers.
The court upheld the 2-1 opinion handed down in August that
the trade groups' claims of harm were speculative.
But Judge Brett Kavanaugh, the lone dissenter, said the law
does not allow the EPA to grant a waiver for a higher blend,
suggesting that the case might continue.
"The evidence is undisputed that this E15 waiver would cause
failure of emissions standards in cars manufactured through
2000. Yet EPA still granted the waiver. EPA's action simply
cannot be squared with the statutory text," Kavanaugh wrote.
Ethanol trade groups applauded the court's decision.
"This is a major victory for the renewable fuels industry
and opens the door for further investment in new fueling
technology to offer E15 to consumers," said Tom Buis, CEO of
Growth Energy, which represents ethanol producers.
The sale of E15 is not widespread yet and faces barriers
including the cost of installing special pumps that can dispense
various blends at service stations. States must also give
approval for the local sale of E15.
The API said it has not yet decided how to continue to
challenge the EPA on this issue in the courts.
"We're disappointed in the court's decision not to hear the
case and are weighing our legal options," said Carlton Carroll,
a spokesman for the API.
"EPA approved E15 even though research by automakers, the
oil industry and the government showed potential mechanical and
infrastructure problems with E15 that could also lead to serious
safety and environmental problems.
A report by the Automobile Association of America in
December said there is insufficient evidence that E15 is safe to
use in most vehicles and that most cars were never designed to
use E15 as a fuel.
"AAA believes the EPA and retailers should suspend the sale
of E15 until more is done to protect consumers from the
potential for costly auto damage and voided warranties," an AAA
spokesman said on Tuesday.
But some legal experts said that, despite the denial of a
rehearing in the appeals court, petitioners may have a shot at
bringing the case to the Supreme Court.
Jonathan Adler, a law professor at Case Western University's
law school, said the case would clear the way to address the
issue of "standing" in the high court.
Several cases handled by the D.C. appeals court, including a
high-profile case in which the court upheld the EPA's rules
governing greenhouse gas emissions, raise concerns that
plaintiffs did not have the standing, or right, to sue, Adler
said.
To bring a lawsuit, the trade groups must have shown that
they had standing - specific interest in the case and or
evidence they were directly hurt.
"This case would seem to be a fairly clean shot at clarifying
some aspects of standing," he said. "There is some concern that
in some of the recent decisions, its stinginess on standing has
come at the expense of analytical consistency."
"It would seem to be a case that for some good reasons has
been flagged and may get serious attention by (the Supreme
Court)."
(Additional reporting by Timothy Gardner)
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