March 18, 2014. In November of 2013, the EPA introduced a proposal to reduce the renewable fuel volume to 15.21 billion gallons. This decision by the EPA has been met with a substantial amount of criticism, mainly because the renewable fuel standard (RFS) is a statutorily mandated volume pursuant to the Clean Air Act, which requires that the total renewable fuels volume for 2014 is 18.15 billion.
The long term legal implications of the EPA’s proposed reduction are substantial. If the EPA’s proposed reduction is allowed to proceed it will set a precedent for EPA administrative action pursuant to establishing the renewable fuels volume related to the RFS. Section 211(o)(7)(A)(ii) of the Clean Air Act does provide a “general waiver” authority that allows the EPA to adjust the renewable fuels volume if “there is an inadequate domestic supply.”
The ethanol industry argues that there is not an inadequate domestic supply. Arguing that the EPA is attempting to modify the renewable fuels volume based off an argument related to the ability to successfully blend and/or distribute the identified renewable fuels into the nations fuel supply as a whole. The EPA contends that the ambiguity contained in the language of the Clean Air Act allows the agency to look at both the production of renewable fuels but also “factors affecting the ability to distribute, blend, dispense and consume those renewable fuels” to evaluate the available supply.
Iowa Attorney General, Thomas J. Miller, has submitted comments to the EPA outlining the legal basis for the opposition to the proposed reduction in the RFS. In his comments Miller addressed how the Chevron test, which is used by the courts to evaluate a federal agency’s interpretation of a statute, is not met. Under this test, the court’s analysis will determine: 1) If the statute is clear, the court must enforce the law’s unambiguous language; and 2) If the statute is not clear, the agency’s interpretation must be permissible.
Based off of the legitimate legal arguments that opponents of the EPA’s proposed reduction in the RFS have expressed, it is quite possible that subsequent litigation could ensue to establish the EPA’s authority to modify the RFS standards and under what circumstances.