American Petroleum Institute v. U.S. EPA

Jan 25: In the U.S. Court of Appeals, D.C. Circuit, Case No. 12-1139. The Appeals Court explains that, "This case arises out of Congress's command that the Environmental Protection Agency make predictions about a promising technology. While the program as a whole is plainly intended to promote that technology, we are not convinced that Congress meant for EPA to let that intent color its work as a predictor, to let the wish be father to the thought."

 

    Further the Appeals Court indicates that in 2005 and again in 2007, Congress amended the Clean Air Act (Act) to establish a renewable fuel standard (RFS) program, now codified at 42 U.S.C. § 7545(o). See Energy Policy Act of 2005, Pub. L. No. 109-58; Energy Independence and Security Act of 2007, Pub. L. No. 110-140. Under the RFS program, EPA must promulgate regulations to ensure that transportation fuel sold or introduced into commerce (hereafter collectively, sold) in the 48 contiguous U.S. states contains an increasing measure of renewable fuel through 2022. See generally 42 U.S.C. § 7545(o)(2). The Act enumerates yearly "applicable volume" requirements not only for renewable fuel but also for a subclass known as "advanced biofuels," which produce lower greenhouse gas emissions than conventional renewable fuels such as corn-based ethanol. Id. §§ 7545(o)(1)(B) (definition of advanced biofuel), 7545(o)(2)(B) (applicable volumes). The "applicable volume" for a particular fuel (a phrase used repeatedly in the statute and thus in this opinion) determines how much of that fuel refiners, importers and blenders must purchase each year in order to comply with the RFS program. Id. § 7545(o)(3)(B).

 

    The Act requires that more than three quarters of advanced biofuel sold in the United States after January 1, 2022 be cellulosic biofuel. When Congress introduced the cellulosic biofuel requirement in 2007, there was no commercial-scale production at all. Yet Congress mandated cellulosic biofuel sales in the U.S. of 100 million gallons in 2010, 250 million in 2011, and half a billion in 2012. However, Congress provided an escape valve in case those levels could not be reached and called for a determination by EPA of the "projected volume of cellulosic biofuel production" for each calendar year. The Administrator "may also reduce the applicable volume of renewable fuel and advanced biofuels" required for that year.

 

    The Appeals Court indicates, "In a January 2012 Final Rule (the 2012 RFS rule), EPA projected that 8.65 million gallons of cellulosic biofuel (10.45 million ethanol-equivalent gallons) would be produced in 2012, well short of the 500 million ethanol-equivalent gallons mandated by the Act for that year. . . In the same rule, EPA considered but rejected a reduction in the volume of total advanced biofuels required for 2012, stating that other kinds of advanced biofuels could make up for the shortfall...

 

    "Petitioner American Petroleum Institute (API) objects both to EPA's 2012 projection for cellulosic biofuel and to its refusal to reduce the applicable advanced biofuels volume for 2012. We reject API's argument that EPA failed to justify its determination not to reduce the applicable advanced biofuels volume for 2012. But we agree with API that because EPA's methodology for making its cellulosic biofuel projection did not take neutral aim at accuracy, it was an unreasonable exercise of agency discretion. . . We accordingly vacate that aspect of the 2012 RFS rule and remand for further proceedings consistent with this opinion."

 

    The Appeals Court noted further that, "The agency adequately grounded its determination in historical data on sugarcane ethanol imports and biodiesel production, as well as governmental and non-governmental projections for future production of those fuels. See 77 Fed. Reg. at 1,331-37. We find especially relevant EIA's projection of 300 million gallons of sugarcane ethanol imports for 2012 and EPA's estimation of 2.4 billion gallons in U.S. biodiesel production capacity. See id. at 1,332, 1,334. These data plausibly suggest that some combination of the two sources of advanced biofuels will be available to make up for the shortfall in cellulosic biofuel. Moreover, in sharp distinction with cellulosic biofuel, there appears to be no great obstacle to the production of advanced biofuel generally; to the extent that estimates in the record are relatively low, that seems to be based on want of a market, which of course continued pressure will tend to solve."

 

        In a release from API on the decision, Group Downstream Director Bob Greco said, "We are glad the court has put a stop to EPA's pattern of setting impossible mandates for a biofuel that does not even exist. This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers. This decision relieves refiners of complying with the unachievable 2012 mandate and forces EPA to adopt a more realistic approach for setting future cellulosic biofuel mandates. The court has provided yet another confirmation that EPA's renewable fuels program is unworkable and must be scrapped."

    Greco said API continues to recommend that "EPA base its prediction on the previous year of actual cellulosic biofuel production in the current year when establishing the mandated volumes for the following year. This approach would provide a more realistic assessment of potential future production rather than simply relying on the assertions of companies whose ability to produce the cellulosic biofuel volumes EPA hopes for is questionable."

 

    Access the complete opinion (click here). Access a release from API (click here). [#Energy/RFS, #Energy/Biofuel, #CADC]

 

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D.C. Circuit Denies Full Panel Review Of Cross State Air Pollution Rule

Jan 24: In the U.S. Court of Appeals, D.C. Circuit, Case No. 11-1302, EME Homer City Generation, L.P v. U.S. EPA, consolidate with 44 additional cases. In this high-profile case, on August 21, 2012, the Appeals Court, in a split 2-1 decision, dealing with U.S. EPA's controversial Cross State Air Pollution Rule (CSAPR), vacated the Transport Rule and the Transport Rule FIPs and remand this proceeding to EPA. EPA and others requested an en banc (full panel) rehearing of the case and the Appeals Court denied the request. Judge Kavanaugh wrote the opinion of the court when the three-judge panel ruled in August, joined by Judge Griffith. The opinion expressly left in place the existing Clean Air Interstate Rule (CAIR) pending EPA's further action.

 

    In its August ruling the majority ruled in part, ". . .this Court has affirmed numerous EPA clean air decisions in recent years when those agency decisions met relevant statutory requirements and complied with statutory constraints. . . In this case, however, we conclude that EPA has transgressed statutory boundaries. Congress could well decide to alter the statute to permit or require EPA's preferred approach to the good neighbor issue. Unless and until Congress does so, we must apply and enforce the statute as it's now written. Our decision today should not be interpreted as a comment on the wisdom or policy merits of EPA's Transport Rule. It is not our job to set environmental policy. Our limited but important role is to independently ensure that the agency stays within the boundaries Congress has set. EPA did not do so here."

 

    The Transport Rule defined emissions reduction responsibilities for 28 upwind States based on those States' contributions to downwind States' air quality problems.The Transport Rule targets two pollutants -- sulfur dioxide (SO2) and nitrogen oxides (NOx). In a release on the decision, the Environmental Defense Fund (EDF) said that CSAPR was an "historic pollution reduction measure that would have protected air quality for 240 million Americans across the Eastern United States and saved up to 34,000 lives each year. EDF General Counsel Vickie Patton said, "We urge EPA, states and cities alike to take corrective action and secure healthier, longer lives for millions of Americans. The states and cities afflicted by power plant pollution can and should petition EPA under the nation's clean air laws to safeguard the health of their citizens."   

    Three petitions were filed asking the full court for a rehearing. EDF -- joined by the American Lung Association, Clean Air Council, Natural Resources Defense Council, and Sierra Club -- filed one of the petitions in support of the Cross-State Rule. EPA also filed a petition, as did a coalition of 15 states and cities (North Carolina, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New York, Rhode Island, Vermont, Baltimore, Bridgeport, Chicago, New York City, Philadelphia, and Washington, D.C.).

    EDF indicates that CSAPR would have reduced the sulfur dioxide and oxides of nitrogen pollution emitted from coal-fired power plants across 28 eastern states. Those emissions, and the resulting particulate pollution and ozone -- more commonly known as soot and smog -- drift across the borders of those states and contribute to dangerous, sometimes lethal, levels of pollution in downwind states. CSAPR would have reduced power plant sulfur dioxide emissions by 73 percent and oxides of nitrogen by 54 percent from 2005 levels. 

    EPA issued the Cross-State Air Pollution Rule under the "good neighbor" protections of the Clean Air Act, which ensure that the emissions from one state's power plants do not cause harmful pollution levels in neighboring states. While no one is immune to these impacts, children and the elderly in downwind states are especially vulnerable. EPA estimated the Cross-State Rule would have: Saved up to 34,000 lives each year; Prevented 15,000 heart attacks each year; Prevented 400,000 asthma attacks each year; and Provided up to $280 billion in health benefits for America each year .

    On November 19, 2012, EPA Assistant Administrator Gina McCarthy issued a Memorandum regarding the "Next Steps for Pending Redesignation Requests and State Implementation Plan Actions Affected by the Recent Court Decision Vacating the 2011 Cross-State Air Pollution Rule." The Memo explains that while the request for en banc review is pending CAIR remains in effect and says, "In the meantime, we have work to do. Statutory deadlines and other circumstances will require us to take various actions during this period and it is important that we all understand how best to take into account the Court's decision." That Memo now takes on new importance and will apparently guide EPA on this issue until new guidance or new rules are proposed (See link below).

    The coalition of states -- led by New York Attorney General Eric Schneiderman -- urged the court to uphold the Federal Cross-State Air Pollution Rule in earlier arguments before the D.C. Circuit. Schneiderman said back in April 2012, "For too long, New York and other states have been harmed by upwind smokestack pollution. It is critical that strong rules protecting the air we breathe are both upheld and enforced. The transport of this kind of air pollution into our state makes it exceedingly difficult for New York to meet federal air quality standards intended to protect public health, resulting in undue hardship for people suffering from asthma and other health conditions. My office stands ready and willing to fight for our ability to maintain healthy air with the reasonable assurance that our efforts won't be undercut by out-of-state polluters." 

    Access the August 21, 2012 Appeals Court complete 104-page opinion and dissent (click here, dissent begins on pp. 61). Access a lengthy release from EDF with links to related information (click here). Access the EPA November 19, 2012 Memo (click here). Access EPA's petition for rehearing en banc (click here). Access EPA's CSAPR website for background and further details (click here). Access a release from the NY attorney general (click here). [#Air, #MIAir, #CADC]

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