EPA defeats court challenge to higher ethanol levels in fuel

‘Smooth Transition’

A spokesman for the EPA, David Bloomgren, said, “This decision and the EPA’s previous actions do not require the use or sale of E15. EPA will continue to work with stakeholders to ensure a smooth transition as businesses decide whether to introduce E15 into the market.”

Circuit Judge Brett Kavanaugh dissented from the three- judge panel’s decision, saying the groups’ standing to sue was established by the prospect of rising costs for their members.

Jerrod Kitt, the director of research for the Linn Group, a Chicago-based researcher and broker, said he didn’t expect the ruling to have a significant impact on corn or ethanol prices for at least a year.

“The drought this year has seen to it that corn used to make ethanol will be reduced,” Kitt said in a telephone interview. “With corn prices where they are now, you are not going to see people rush out to make E15.”

Liability Issues

The still-unresolved liability issues about using ethanol in all cars and the investment required for new E15 gas pumps may also limit use of E15, Kitt added.

At least 25 U.S. senators and 156 House members have signed letters asking Lisa Jackson, administrator of the Environmental Protection Agency, to suspend or lower mandates on how much ethanol the country must use this year and next.

A 2007 law mandates the use of 13.2 billion gallons of biofuels such as ethanol this year, rising to 13.6 billion in 2013. The measure is designed to help reduce the nation’s reliance on oil from overseas sources.

The USDA on Aug. 10 predicted ethanol use in the year starting Sept. 1 would consume 4.5 billion bushels, down from 5billion in the current year. Use for ethanol as a share of the estimated crop would rise to 42 percent from 40 percent.

The case is Grocery Manufacturers Association v. U.S. Environmental Protection Agency, 10-1380, U.S. Court of Appeals for the District of Columbia Circuit.

Bloomberg News

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