[00:00:00] Speaker 00:
Case number 19-1124 et al, American Fuel and Petrochemical Manufacturers Petitioner versus Environmental Protection Agency.

[00:00:13] Speaker 04:
Good morning, Council.

[00:00:15] Speaker 04:
You may proceed.

[00:00:16] Speaker 07:
Good morning, Your Honors.

[00:00:19] Speaker 07:
May it please the Court, Kevin King for the Industry Petitioner Group.

[00:00:24] Speaker 07:
I'll be addressing the 10% issue.

[00:00:27] Speaker 07:
Your honors, the rule should be vacated because it relies on an unreasonable interpretation of the statute's volatility allowance for fuels containing gasoline and 10% ethanol.

[00:00:38] Speaker 07:
The rule interprets that clause as encompassing any blend with at least 10% ethanol, all the way up to 99.9% ethanol.

[00:00:48] Speaker 07:
EPA reads in the phrase at least, even though it's not in the statute.

[00:00:53] Speaker 07:
And that omission is important here, Your Honors, because many other parts of the act, including parts enacted at the same time as paragraph H4, contain at least modifiers or similar language

[00:01:06] Speaker 07:
The presence of that language elsewhere in the statute coupled with its absence in paragraph H4 indicates that it's unreasonable to read in the at least modifier that the rule relies upon.

[00:01:17] Speaker 07:
Now, EPA stresses that the statute does not say containing no more than 10% ethanol and therefore it shouldn't be read as setting a ceiling.

[00:01:26] Speaker 07:
And that's true as far as it goes.

[00:01:29] Speaker 07:
But what EPA ignores is the statute also does not say containing at least 10% ethanol.

[00:01:36] Speaker 07:
EPA tries to have it both ways by emphasizing the absence of one phrase while ignoring the absence of another.

[00:01:43] Speaker 07:
Your honors, we submit that the statute is properly understood as setting a specific requirement, not a floor and not a ceiling.

[00:01:51] Speaker 07:
And what that means is that the statute covers blends of gasoline and 10% ethanol with a reasonable tolerance around 10% to account for real world circumstances like imprecisions in the blending process.

[00:02:05] Speaker 07:
That interpretation makes sense given the statute's reference to a percentage, a mathematically precise expression of proportion per 100 units.

[00:02:15] Speaker 04:
And we know that because

[00:02:18] Speaker 07:
We, we know that because that's the nature of a percentage right percentage expresses how many things are in something per 100 units that's just the nature of a percentage but it also judge Rogers links up with the ordinary usage of the word containing when used without a modifier.

[00:02:35] Speaker 07:
If I wanted to say, you know, express a floor, what I would say is containing at least 10% or containing 10% or more.

[00:02:43] Speaker 07:
But when you use that word without a modifier, as Congress did here, it means a specific amount, and I'll give you just one example.

[00:02:51] Speaker 07:
EPA says at page 105 that its brief contains 27,478 words.

[00:02:58] Speaker 07:
We all know that means a specific amount.

[00:03:00] Speaker 07:
Yet under the rules interpretation, EPA could just as well have said that the brief contains 10 words.

[00:03:07] Speaker 07:
And that really demonstrates the unreasonableness of the rules approach in this case.

[00:03:12] Speaker 01:
But if we knew that the briefing rules were wanting to encourage fulsome discussion,

[00:03:21] Speaker 01:
So the context matters right and so if we wanted people to not skimp on what they wrote and we said certify how many words your brief contains we would understand that perhaps to say at least and I mean EPA you say EPA only emphasizes one and not the other missing.

[00:03:38] Speaker 01:
modifier, but both were considered in the legislative process and both were dropped.

[00:03:43] Speaker 01:
So why shouldn't we just look at that as a delegation to EPA consistent with other limitations in the statute to make the kind of determination that it made here?

[00:03:55] Speaker 07:
Your honor, I think the reason is that just as you say, Congress considered proposals that had the least modifier.

[00:04:02] Speaker 07:
Congress considered proposals that had the at most modifier.

[00:04:06] Speaker 07:
It disregarded both of those.

[00:04:07] Speaker 07:
It chose instead to adopt a specific requirement, gasoline and, you know, containing gasoline and 10% ethanol.

[00:04:15] Speaker 01:
Well, that's your reading, that the shearing away of those two confines it to the number.

[00:04:21] Speaker 01:
But it doesn't say exactly or precisely.

[00:04:26] Speaker 01:
So the question is, doesn't that leave it somewhat open?

[00:04:31] Speaker 01:
And what's your best argument?

[00:04:33] Speaker 01:
I hear you on this precise number.

[00:04:35] Speaker 01:
That carries some weight.

[00:04:38] Speaker 01:
Anything else that we should consider in reading it that way?

[00:04:41] Speaker 07:
Yes, absolutely right so we certainly we agree your honor that context matters and there are three contextual clues here that narrow it down from sort of anything EPA wants to a smaller subset.

[00:04:53] Speaker 07:
Right.

[00:04:53] Speaker 07:
The first is the contextual indicator that I mentioned earlier.

[00:04:57] Speaker 07:
The same statute, the 1990 Clean Air Act amendments in which paragraph H4 was adopted contains numerous other provisions, and you can see them at page 30 of our opening brief, that refer to percentages and say things like at least or no more than, right?

[00:05:14] Speaker 07:
So the modifiers were elsewhere in the same statute, but not here.

[00:05:17] Speaker 07:
And so under that canon, we think it's particularly powerful that Congress intentionally omitted the modifiers in this section.

[00:05:24] Speaker 07:
And again, the House bill had the at least language that was rejected.

[00:05:28] Speaker 07:
Second, Congress was not legislating on a black slate, Congress it's undisputed was aware of EPA is pre existing regulations, those regulations applied only to 9 to 10% ethanol.

[00:05:40] Speaker 07:
And more than that, Congress departed from EPA's regulations in important ways that narrow the scope of EPA's discretion, right?

[00:05:47] Speaker 07:
EPA's regulations said at least 10%, or I'm sorry, at least 9%, that's not in the statute.

[00:05:53] Speaker 07:
EPA's regulations set the upper end of the range with reference to the waiver condition.

[00:05:59] Speaker 07:
But again, the statute doesn't do that.

[00:06:01] Speaker 07:
The statute says containing 10% ethanol.

[00:06:05] Speaker 01:
And indeed, EPA- That last fact, support EPA.

[00:06:09] Speaker 07:
Your Honor, we would disagree with that.

[00:06:11] Speaker 07:
You know, the fact that EPA's regulations set an elastic limit, right, and Congress instead put in a specific number, I think Congress's departure from that F-4 reference from that elastic limit needs to be given meaning.

[00:06:24] Speaker 07:
And speaking of meaning, EPA consistently interpreted paragraph H-4, all the way from 1991 until 2019,

[00:06:32] Speaker 07:
as applying only to blends with 9 to 10% ethanol.

[00:06:36] Speaker 07:
It changed its approach only after President Trump directed the agency to look at new approaches as a way of boosting farmers.

[00:06:43] Speaker 01:
Is that your third point?

[00:06:44] Speaker 01:
You had three.

[00:06:46] Speaker 07:
Right yeah the third point is the purpose right the the interveners and EPA make a lot of the statutes purpose.

[00:06:53] Speaker 07:
But you have to look at paragraph H as a whole, and when you do so, you can see that the purpose as much as anything else is to control emissions indeed EPA acknowledge that in its 2011 Miss fueling mitigation rule.

[00:07:04] Speaker 07:
where it said that the purpose of the statute is, yes, to allow ethanol blending to continue, but also to address and to contain evaporative emissions.

[00:07:15] Speaker 07:
And here, EPA has acknowledged, you can find this in page 20 of the appendix, footnote 139, that this rule would result in a meaningful increase in nitrogen oxide emissions.

[00:07:26] Speaker 07:
Environmental groups, including the Sierra Club, opposed the rule because it would result in those increased emissions and therefore increased ozone.

[00:07:34] Speaker 07:
You don't have to take it from me.

[00:07:35] Speaker 07:
You can look at their analysis at pages 288 to 298 of the appendix.

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So adopting this rule does not advance the statute's purpose.

[00:07:45] Speaker 07:
In fact, it undercuts it.

[00:07:47] Speaker 07:
And so I think that's just one more contextual reason why EPA's interpretation is unreasonable.

[00:07:53] Speaker 06:
Can you tell me why or how you construe, I guess, the second clause of H4, the deemed to comply clause?

[00:08:05] Speaker 06:
Because EPA and I guess more so one of the interveners says that the reference there to the waiver condition under subsection F4

[00:08:22] Speaker 06:
in Part B of that clause supports the EPA's construction.

[00:08:28] Speaker 07:
Right.

[00:08:29] Speaker 07:
So a few things on that, Your Honor.

[00:08:31] Speaker 07:
EPA notably doesn't join intervener's argument.

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And you can find EPA's interpretation of that compliance defense at 76 Federal Register 44-434.

[00:08:43] Speaker 07:
to 44435.

[00:08:46] Speaker 07:
We agree with that interpretation.

[00:08:47] Speaker 07:
Basically, what EPA says there is that paragraph H needs to be read as a whole.

[00:08:52] Speaker 07:
And again, one important part of paragraph H is H5, which allows states to countermand the volatility allowance when it's resulting in increased air pollution.

[00:09:04] Speaker 07:
It would make very little sense

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to give states that option only to have it nullified by this compliance defense that intervenors have raised, which is what would happen right the compliance defense says that it shall be deemed to be compliance with this subsection.

[00:09:22] Speaker 07:
if somebody meets all those conditions, and yet that would override the H5 state authority.

[00:09:28] Speaker 07:
So that's one reason.

[00:09:30] Speaker 07:
The legislative history also, Your Honor, shows that it was simply meant to be an alternative way, an easier way for blenders to demonstrate compliance, not to set a separate volatility limit.

[00:09:40] Speaker 06:
I mean, my reading of the legislative history and the regulatory history is that EPA, prior to 1990,

[00:09:51] Speaker 06:
imposed a rule that required lenders to test their blended fuel.

[00:10:00] Speaker 06:
And that was seen as by Congress as onerous.

[00:10:05] Speaker 06:
And so Congress put this second clause in H4 to say that lenders would no longer have to do their own periodic quality control testing or other testing, as long as they could show that the

[00:10:21] Speaker 06:
base gasoline had been tested and they get the paperwork to show that, that it met the nine PSI requirement.

[00:10:30] Speaker 06:
And then that the amount of ethanol that was put in they could certify was no more than the 10% that was in the F4 waiver for E10 in that they hadn't added anything else, then they would be deemed to comply even if they hadn't done their own testing.

[00:10:51] Speaker 06:
That's the way I read the second clause of H4.

[00:10:54] Speaker 06:
Do you agree with that?

[00:10:57] Speaker 07:
I think we agree with parts of that, Your Honor.

[00:10:59] Speaker 07:
We certainly agree that Congress in the 1990 amendment sought to create this compliance defense as a way to make it easier for downstream parties to comply and to sort of get rid of some of the testing and the paperwork.

[00:11:09] Speaker 07:
We agree with that part of it.

[00:11:11] Speaker 07:
But two points, Your Honor, to follow up on that.

[00:11:14] Speaker 07:
The first is that

[00:11:16] Speaker 07:
The F4 waivers at issue in this case have a 9 PSI limit on them.

[00:11:21] Speaker 07:
So I don't think this point helps the interveners in any event, right?

[00:11:24] Speaker 07:
They specifically say at E15 at 9 PSI.

[00:11:27] Speaker 07:
So I think that that's a threshold reason.

[00:11:29] Speaker 07:
It doesn't get them home in this particular case.

[00:11:32] Speaker 07:
But also more broadly, well, I think I'll just leave it at that.

[00:11:40] Speaker 07:
And if I could just, Judge Piller, to come back to your point about context, the other thing I'd mention here is that our reading doesn't leave EPA without discretion, right?

[00:11:49] Speaker 07:
EPA will have discretion to set a reasonable tolerance around 10% to account for practicalities of the blending process.

[00:11:56] Speaker 07:
9% is clearly okay.

[00:11:58] Speaker 07:
11% might be as well.

[00:12:00] Speaker 07:
So we're not arguing that EPA has no discretion.

[00:12:03] Speaker 07:
What we are arguing is that the rule that it adopts needs to bear some reasonable relationship

[00:12:07] Speaker 07:
to the statutory language and its 10% requirement.

[00:12:11] Speaker 07:
Had Congress adopted the language of EPA's regulations, we wouldn't be making that argument.

[00:12:16] Speaker 07:
We wouldn't have a leg to stand on.

[00:12:17] Speaker 07:
But Congress departed from EPA's approach prior to 1990, and that difference has to matter.

[00:12:28] Speaker 07:
Your honors, if there are no further questions, I'll reserve the balance of my time.

[00:12:31] Speaker 04:
So let me just be sure I understand how that history works in your favor here.

[00:12:42] Speaker 04:
By the time EPA is looking at this, the whole notion of the industry has changed at least

[00:12:55] Speaker 04:
with regard to the strictness of looking at the percentage here.

[00:13:03] Speaker 04:
And that's what EPA tells us.

[00:13:06] Speaker 04:
And to some extent, your clients don't disagree with that because they understand that you may never quite hit the 10% mark.

[00:13:19] Speaker 04:
But so long as you're aiming at it, it seems to be your argument.

[00:13:23] Speaker 04:
That's good enough.

[00:13:25] Speaker 04:
And since Congress was aware, or this court has to assume Congress is aware of the fact that the language is so different in parts where Congress intended to give the agency some leeway, why wouldn't the requirement be

[00:13:56] Speaker 04:
that that in itself is enough and your argument can stop there, that the agency has to go back to Congress.

[00:14:10] Speaker 04:
And even though these arguments can be made, and they were made in this case, where qualifiers were there in the House bill and they were dropped,

[00:14:25] Speaker 04:
And EPA knows I'm gonna ask them that question.

[00:14:30] Speaker 04:
Why isn't that approach that the court has taken in the past the one the court should follow?

[00:14:37] Speaker 04:
Otherwise, how do we know sort of what's going on here?

[00:14:47] Speaker 04:
You say sometimes it could be 9%, sometimes it could be 11%, but your argument seems to be

[00:14:55] Speaker 04:
you have to, or EPA has to have some way to evaluate the good faith of whoever is subject to the limit.

[00:15:11] Speaker 04:
And so if they don't get it precisely, that's fine, so long as they can show that they set up their testing to focus on that percentage.

[00:15:21] Speaker 04:
And EPA comes back and says, essentially, look,

[00:15:25] Speaker 04:
We're in a different world now.

[00:15:28] Speaker 04:
Some things have happened and you acknowledge that these percentages aren't always going to be strictly adhered to and given that the legislative history

[00:15:52] Speaker 04:
comes out sort of on both sides, you could say, of that argument.

[00:15:56] Speaker 04:
And certainly the purpose says EPA favors what it's doing.

[00:16:02] Speaker 04:
Why would the court want to take the position that in this type of measurement, Congress has to be involved at every step?

[00:16:22] Speaker 07:
Your Honor, a lot to unpack there.

[00:16:24] Speaker 04:
We certainly understand where you started discussed and I just want to be sure I know where you are having heard some of the challenges to your position.

[00:16:35] Speaker 07:
Absolutely, Your Honor, I'm glad to respond to that.

[00:16:37] Speaker 07:
Let me start by saying that you accurately characterized our argument, which is, you know, we read the statute is setting a target, you know,

[00:16:44] Speaker 07:
Folks who are invoking this volatility allowance need to be aiming at 10%.

[00:16:49] Speaker 07:
But you're right, Congress would not have required everything to go through Congress here.

[00:16:54] Speaker 07:
As I mentioned, there is room for EPA to operate in the statute.

[00:16:59] Speaker 07:
As the Supreme Court said in the city of Arlington, there's a limit.

[00:17:02] Speaker 07:
EPA can go no further than the ambiguity allows.

[00:17:05] Speaker 07:
And here the ambiguity relates to the practicalities of the blending process.

[00:17:09] Speaker 07:
It's not possible, as EPA has noted, and I don't think anybody's disputed this, to blend fuel right all the way down to 10.000000% ethanol.

[00:17:18] Speaker 07:
But that doesn't mean that it's not possible to get very close to that.

[00:17:22] Speaker 07:
And EPA has discretion to say how close is close enough, as long as EPA is trying to interpret and apply a 10% requirement.

[00:17:31] Speaker 07:
Not a floor, not a ceiling, but a requirement.

[00:17:35] Speaker 07:
And so that's the way we look at it and you know your honor you mentioned purpose, I'll just come back to purpose I know EPA says the purpose favors its interpretation and EPA is free to argue that, but we don't agree we think it's it's at least 5050 here because again,

[00:17:51] Speaker 07:
Paragraph H5 acknowledges that the volatility allowance can result in increased emissions and air pollution, and it gives states a way of disabling the volatility allowance as a result of that.

[00:18:04] Speaker 07:
Congress would not have adopted those terms if it had thought this is just a maximize ethanol type provision.

[00:18:11] Speaker 01:
But isn't that itself a little bit contrary?

[00:18:15] Speaker 01:
I mean, there is a backstop in the NACs.

[00:18:18] Speaker 01:
And so that could cut the other way.

[00:18:25] Speaker 07:
There's a backstop under H5, but that backstop wouldn't operate under intervener's interpretation of the compliance defense that Judge Wilkins was mentioning, again, because the compliance defense says it shall satisfy this subsection, i.e.

[00:18:39] Speaker 07:
all of paragraph H. So that

[00:18:40] Speaker 07:
That's one reason, but the other reason is, again,

[00:18:44] Speaker 07:
The Compliance Defense acknowledges that more ethanol can lead to more air pollution.

[00:18:48] Speaker 07:
It doesn't say it always will, but it just acknowledges that, and this is throughout the legislative history, that the volatility allowance was designed to deal with problems that arise when you add ethanol to these fuel blends.

[00:19:01] Speaker 07:
So I don't think the backstop cuts at all in favor of the other side.

[00:19:06] Speaker 07:
I think it shows again here that this is a specific requirement and EPA can define the margins of it.

[00:19:12] Speaker 07:
It has that authority.

[00:19:13] Speaker 07:
But what it can't do is adopt an interpretation that goes all the way up to 99% ethanol.

[00:19:17] Speaker 07:
That's just not a reasonable interpretation of containing gasoline and 10% ethanol.

[00:19:21] Speaker 01:
And the premise of your position is that at the time Congress was acting, it didn't realize that the shape of the curve, at least for volatility,

[00:19:36] Speaker 07:
Yeah, the record was not clear on that point.

[00:19:39] Speaker 07:
It was not well known.

[00:19:40] Speaker 07:
What everybody knew at the time was E10, right?

[00:19:43] Speaker 07:
E10 wasn't even in widespread usage, although it was authorized.

[00:19:46] Speaker 07:
But people understood E10, and they understood that when you add, when you go from E0 to E10, you have a volatility jump, right?

[00:19:53] Speaker 07:
About a one PSI volatility.

[00:19:54] Speaker 01:
And now EPA, and it sounds like the parties agree that the science shows that there's actually a

[00:20:02] Speaker 01:
downward sloping curve somewhere around following E10.

[00:20:06] Speaker 01:
And so at least as to volatility and related emissions, they're not increasing.

[00:20:13] Speaker 01:
But your point

[00:20:15] Speaker 01:
You say your point has currency, A, because we look at what Congress was doing, not what it might've done if it acted today, and B, because there are other kinds of emissions that might nonetheless increase, like particulate matter?

[00:20:30] Speaker 07:
Yes, yeah.

[00:20:31] Speaker 07:
That last point, let me unpack that a little bit because I recognize that it's complicated.

[00:20:34] Speaker 07:
And again, I recommend if you have the time to look at 288 to 298 of the appendix where Sierra Club and other environmental

[00:20:41] Speaker 07:
environmental groups explain step by step how this works.

[00:20:44] Speaker 07:
It is true that volatility, read vapor pressure, decreases slightly when you go from E10 to E15, if you hold everything else constant.

[00:20:53] Speaker 07:
We acknowledge that.

[00:20:55] Speaker 07:
But that's not the entire story.

[00:20:57] Speaker 07:
What happens when you make that change is that nitrogen oxide emissions increase, and those nitrogen oxide emissions combine with other byproducts to form ozone.

[00:21:06] Speaker 07:
EPA, again, acknowledged at A20, footnote 139, that that would have had a meaningful increase in ozone formation.

[00:21:15] Speaker 01:
EPA's position was that it's sort of marginal, that the increases are kind of, you know, testing error type increases.

[00:21:26] Speaker 07:
I think it goes a little further than that, Your Honor.

[00:21:28] Speaker 07:
They say small but meaningful, and they say, you know, small but meaningful because the increases survive a multivariate comparison.

[00:21:35] Speaker 07:
And again, Sierra Club and others take it even further and say, actually, it's more than small.

[00:21:40] Speaker 07:
It's pretty significant.

[00:21:43] Speaker 07:
So, you know, there are multiple purposes to this statute and the interpretation that EPA has adopted here would undercut one of the dominant purposes.

[00:21:56] Speaker 04:
All right, thank you.

[00:21:57] Speaker 04:
Why don't we hear from Mrs. Dawson.

[00:22:05] Speaker 00:
Good morning, Your Honors, and may it please the Court.

[00:22:07] Speaker 00:
I'm Elizabeth Dawson, presenting on behalf of the industry petitioners with regard to the substantial similarity issue, and on behalf of American fuel and petrochemical manufacturers on the reopener issue.

[00:22:17] Speaker 00:
I'd like to reserve one and a half minutes of my time for rebuttal.

[00:22:21] Speaker 00:
Beginning with substantial similarity, I would like to discuss three main ways in which EPA violated a statute designed to protect consumers and the vehicles they drive.

[00:22:30] Speaker 00:
First, EPA's faulty decision to authorize the sale of E-15 at 10 PSI, despite not finding that fuel to be substantially similar to any certification fuel,

[00:22:41] Speaker 00:
Second, EPA's arbitrary and capricious technical conclusions regarding the substantial similarity of E10 and E15 at 9 PSI.

[00:22:49] Speaker 00:
And third, EPA's improper interpretation of a broadly prohibitive statute with only narrow exceptions.

[00:22:55] Speaker 00:
Then I'll discuss how through this rulemaking, EPA reopened its 2010 and 2011 partial waivers and why once reopened, they must fail as well.

[00:23:04] Speaker 00:
But first, as to substantial similarity, EPA's rulemaking suffers from a fatal but obvious flaw.

[00:23:10] Speaker 00:
EPA promulgated a rule expressly to allow the sale of E-15 at 10 psi, but did not find that E-15 at 10 psi is substantially similar to any certification fuel.

[00:23:22] Speaker 00:
In so doing, EPA skirted the very volatility concerns it discussed when concluding that it could not, even in granting the partial waivers under F4, allow the fuel to be sold at 10 PSI because it would cause vehicles to violate emission standards.

[00:23:38] Speaker 00:
EPA's conclusion that E15 at 9 psi is substantially similar to E10 at 9 psi doesn't answer the question that is actually asked by this rulemaking.

[00:23:49] Speaker 00:
Is E15 at 10 psi, the fuel it wants to authorize the sale of, actually substantially similar to a certification fuel?

[00:23:56] Speaker 00:
So although EPA says, and we acknowledge, that E15 at 10 psi might be

[00:24:02] Speaker 00:
slightly less volatile than E10 at 10 TSI, nobody is arguing that it is not more polluting, which it indisputably is.

[00:24:10] Speaker 00:
So EPA's purposeful avoidance of this fact renders the rule arbitrary and capricious.

[00:24:15] Speaker 00:
Second, EPA's cursory rehash of its technical conclusions in the E15 partial waiver decision is also arbitrary and capricious.

[00:24:23] Speaker 00:
As EPA has previously recognized, the substantial similarity provision is, as its text implies, focused on the substance of the fuel, while F4 is focused on its emissions effects.

[00:24:34] Speaker 00:
E10 and E15 are substantively dissimilar in important ways, both in ethanol content and in volatility.

[00:24:41] Speaker 00:
Moreover, those several years have passed since EPA decided to grant the E15 waiver and E15 has been used on the road.

[00:24:49] Speaker 00:
EPA decided to rely almost exclusively on those same technical conclusions back in 2010 and 2011 to conclude that it did not expect any harmful emissions effects from this rulemaking, but didn't actually take a look at what was going to happen in the real world.

[00:25:05] Speaker 00:
So to the contrary, EPA provided no evidence contradicting the prior findings regarding the emissions effects of E-15 at 10, because as I already explained, it only looked at E-15 at nine, and it disregarded the concerns raised by commenters in both the partial waiver rulemakings and this rulemaking regarding the effects of E-15.

[00:25:25] Speaker 00:
Now third, while this court need not reach the question of statutory interpretation, if it concludes and agrees that

[00:25:31] Speaker 00:
EPA can't justify its conclusion that E-15 is substantially similar to E-10 on the merits.

[00:25:37] Speaker 00:
Ultimately, the statute does not afford EPA the authority to make the substantial similarity finding it did here.

[00:25:43] Speaker 00:
Congress enacted the substantial similarity prohibition to ensure that consumers could continue to drive any light duty vehicle they purchased after 1974 without worrying about whether the fuel used to power it would harm vehicles or the environment.

[00:25:58] Speaker 00:
Now, Congress enacted a narrow exception to this in F4, allowing fuels to enter commerce if they demonstrated that they wouldn't cause any vehicles to violate emissions standards during their useful lives.

[00:26:10] Speaker 00:
But EPA's determination under F1 that E15 is substantially similar only to E10, a certification fuel for a small part of the of the new fleet, contravenes the plain language of the statute and disregards congressional intent.

[00:26:25] Speaker 00:
And EPA's determination that it can even further subdivide the accident light duty vehicle fleet to find E15 to be substantially similar to E10

[00:26:33] Speaker 00:
as long as it's only used in a certain subset of vehicles, renders superfluous the narrow exception that Congress enacted in subsection F4 and heightens the risk of vehicle misfueling.

[00:26:44] Speaker 00:
And finally, at a minimum, it's, I'm sorry.

[00:26:46] Speaker 00:
Yeah, go ahead.

[00:26:46] Speaker 00:
Why don't you wrap up and then I'll ask you.

[00:26:48] Speaker 00:
Oh, I was just going to say that it's unreasonable also for EPA to interpret the statute to allow it to make a substantial similarity finding for vehicles not certified on the fuel that's being used as the basis of comparison.

[00:26:59] Speaker 00:
So here,

[00:27:00] Speaker 00:
EPA found or compared E10 and E15 because E10 was a certification fuel, but expanded the finding to cars not certified on E10.

[00:27:12] Speaker 01:
Are you suggesting that F4 does allow a partial waiver for certain years?

[00:27:17] Speaker 00:
No, we don't concede that F4 does allow a partial waiver, but to the extent that it would, there is no reason then for that partial waiver to be expanded to the substantial similarity provision.

[00:27:31] Speaker 01:
So under your reading, can you identify any fuel that's been introduced since 1990 that would be substantially similar to all

[00:27:40] Speaker 01:
certification fuels used in all model years, it just seems like you have to so detach the statute from everything that we know about what it's about and what's been done under it to adopt your plain language argument, which otherwise might be strong.

[00:28:00] Speaker 00:
Well, I certainly understand that the language that Congress enacted was intended to address a specific problem.

[00:28:08] Speaker 00:
And to answer your question about what has happened since 1990, I can't say that EPA has made a substantially similar determination with regard to multiple certification fuels because it hasn't faced that question.

[00:28:21] Speaker 00:
in the context of light duty vehicles, because it's only very recently that E10 became a certification fuel.

[00:28:26] Speaker 00:
So it wouldn't have had the opportunity to look at both E0 and E10 in a substantially similar determination.

[00:28:34] Speaker 00:
But even if the statute might be anachronistic, as we view it in light of the changing times, that's not a reason to ignore what Congress provided.

[00:28:44] Speaker 00:
As Judge Rogers was saying, EPA has to go back to Congress.

[00:28:47] Speaker 00:
if they want the language to change and to expand to allow additional substantially similar findings.

[00:28:55] Speaker 01:
So you're not arguing that every fuel introduced would have to be substantially similar to all certification fuels, including things like diesel or natural gas or the like you're talking about?

[00:29:11] Speaker 00:
So in this context, we are interpreting and suggesting that the court need go no farther than interpreting subsection F1A, which is the provision applicable to the light duty vehicle fleet, because that is what EPA did here.

[00:29:24] Speaker 00:
It made a substantially similar finding with regard to light duty vehicles.

[00:29:29] Speaker 00:
But then there's also B. There is, but the court need not interpret that, which was, as we all know, enacted at a different time.

[00:29:41] Speaker 01:
Light-duty vehicles like Peugeot or Mercedes that run on diesel, that's not considered a certification fuel in your arena?

[00:29:50] Speaker 00:
Well, F1A is applicable to the fuels used for general use in the light-duty vehicle fleet.

[00:29:56] Speaker 00:
And so E0 was the certification fuel for general use for light-duty vehicles.

[00:30:02] Speaker 00:
And so interpreting that provision, E15 would have to conclude that for a substantial similarity determination to be upheld, it would have to apply

[00:30:10] Speaker 00:
to generally to the fuels and to the vehicles that are light duty vehicles.

[00:30:15] Speaker 01:
Right.

[00:30:15] Speaker 01:
But there are light duty vehicles used for general use.

[00:30:17] Speaker 01:
I mean, it's a quibble, but that are that run on diesel that aren't, you know, industrial trucks that are just passenger cars.

[00:30:25] Speaker 00:
Well, we would submit that the by general use, Congress meant, as it understood at the time, vehicle certified on E zero and Deline.

[00:30:38] Speaker 06:
Yes, assuming

[00:30:39] Speaker 06:
I'm just trying to make sure I understand how your arguments work together.

[00:30:46] Speaker 06:
If indeed we agreed with your colleague's argument about H4, do we need to reach this issue of substantially similar?

[00:30:58] Speaker 00:
No, Your Honor.

[00:30:59] Speaker 00:
First, as EPA stated, it needs both interpretations to allow E15 at 10 PSI

[00:31:08] Speaker 00:
into commerce because of H4's limitations.

[00:31:11] Speaker 00:
If it does not extend to E15, then this rulemaking cannot stand.

[00:31:20] Speaker 00:
So briefly, I would just like to turn to the re-opener issue.

[00:31:23] Speaker 04:
If you allow me the time, I was, I really just want to be clear council, if I could, if we don't adopt your first argument, do you want to respond to?

[00:31:37] Speaker 04:
Judge Wilkins' question?

[00:31:41] Speaker 00:
Sorry, thank you for the opportunity.

[00:31:42] Speaker 04:
That was his question, but I mean, as to, there is the subsection B now.

[00:31:49] Speaker 00:
Well, I don't think that it's necessary in this context for the court to reach subsection B. I think it's, and maybe I'm not understanding your question correctly, but I think the H4 is just positive.

[00:32:03] Speaker 00:
And if the court does not agree with our reading of H4, it can still reach the substantial similarity determination and conclude that EPA improperly either interpreted the statute or applied it with regard to E15 at 10 PSI.

[00:32:21] Speaker 00:
If I could have a moment just to mention the re-opener issue before concluding.

[00:32:27] Speaker 00:
So in this rule-making, EPA bent over backwards to avoid the perception that it was reopening the 2010 and 2011 partial waivers.

[00:32:34] Speaker 00:
But EPA can't insulate those waivers from review by now claiming it can use the F1 provision to take an action that it actually considered to be contrary to law under the F4 provision while keeping its actions under F4 in place.

[00:32:49] Speaker 00:
So here EPA sought comment on the waiver conditions in F4 and proposed that they would no longer be necessary, but ultimately concluded that they were.

[00:32:58] Speaker 00:
And so EPA claims that it did not reopen those waivers here, but by doing that and by also relying on the same technical conclusions that it did in those partial waivers, it has effectively reopened them.

[00:33:10] Speaker 00:
And once reopened for the reasons then Judge Kavanaugh explained in his dissent in the grocery manufacturer's case,

[00:33:17] Speaker 00:
those waivers fail because EPA improperly interpreted the statute.

[00:33:23] Speaker 00:
And EPA failed in its technical conclusions as we included in the comments in this rulemaking.

[00:33:30] Speaker 00:
So because EPA violated the statute, both with regard to this rulemaking and the partial waivers, we would request that this court grant our petition for review and I'd save the rest of my time for rebuttal.

[00:33:43] Speaker 06:
Same question, counsel, with respect to your

[00:33:47] Speaker 06:
reopener argument.

[00:33:49] Speaker 06:
If for the sake of just for the sake of this question, we were to agree with your argument about H4 when we need to reach this reopener issue.

[00:34:03] Speaker 00:
No, not with regard to the E15 rule.

[00:34:06] Speaker 00:
The rule under consideration expressly here is the E15 rule, including the H4 and the substantial similarity interpretation.

[00:34:13] Speaker 00:
So the F4 reopener question is separate.

[00:34:17] Speaker 00:
H4 alone is enough to doom the E15 rule promulgated in 2019.

[00:34:25] Speaker 01:
Let me just ask you, you refer a bunch of times in supporting that it has to be substantially similar to earlier fuels, that this backward compatibility is a big part of the statute.

[00:34:40] Speaker 01:
But what's your best site for that?

[00:34:43] Speaker 01:
You make the argument in your brief that the purpose of F1 is backward compatibility.

[00:34:50] Speaker 01:
And you alluded to it in your remarks today that somebody should be able to drive up to the pump and not worry if they have a 1980s car.

[00:34:58] Speaker 01:
But what's the support for that as Congress's purpose?

[00:35:02] Speaker 00:
Well, I think you can look directly to the statute itself and see that it referenced the model year vehicles 1975 and later to demonstrate that Congress wanted

[00:35:12] Speaker 00:
the all vehicles that were on the road at that time and in the future to be able to use the fuels that were being allowed into commerce.

[00:35:23] Speaker 00:
And to be clear, as we note and I'm sorry, does somebody have a question?

[00:35:29] Speaker 00:
Sorry.

[00:35:31] Speaker 00:
So I think we can look to the words of the statute itself to show that Congress wanted things to be compatible with any vehicles that are on the road.

[00:35:41] Speaker 01:
So they just have to come up with new legislation in order to recognize and build on generational tiers of change technology.

[00:35:51] Speaker 00:
I think that's correct.

[00:35:53] Speaker 00:
I mean, it's clear that in both promulgating the F1 and the H4 provisions,

[00:35:58] Speaker 00:
Congress was responding to problems at the time.

[00:36:01] Speaker 00:
And it certainly didn't necessarily know what was going to happen in the future with regard to the development of fuels.

[00:36:10] Speaker 00:
But there are still cars on the road that were certified on E0.

[00:36:15] Speaker 00:
And so it was important to Congress that they still be allowed to use fuels without having to be concerned about misfueling.

[00:36:27] Speaker 00:
Thank you.

[00:36:29] Speaker 04:
All right.

[00:36:38] Speaker 04:
Mr. Rosen.

[00:36:40] Speaker 08:
Yes, Your Honor, thank you.

[00:36:41] Speaker 08:
Perry Rosen for the United States for EPA here.

[00:36:45] Speaker 08:
First, let me deal with the issue that Mr. King dealt with first, which is the H4 allowance here.

[00:36:53] Speaker 08:
We certainly understand that it's not the easiest task to come in here and say that EPA is reversing

[00:36:59] Speaker 08:
an interpretation that had several decades, or that a statute of number is ambiguous.

[00:37:06] Speaker 08:
But given the circumstances of this case, that's exactly the case here in this specific situation.

[00:37:13] Speaker 08:
As you well know from a legal standpoint, if Chevron means anything, it means that EPA can go back and take another look at a statute, particularly if it's warranted.

[00:37:21] Speaker 08:
And although undoubtedly, EPA took this action at the impetus of a presidential directive, executive order,

[00:37:28] Speaker 08:
It did look at re-examination of the statute and such a re-examination is warranted in this case.

[00:37:36] Speaker 08:
We're talking about a fuel blend with just 5% additional ethanol that's been sold for a decade during two thirds of the year without any significant environmental issues.

[00:37:46] Speaker 08:
It serves the purpose of an intent of the statute, which was to provide a special allowance for ethanol to support the agricultural industry, energy security, and the other reasons set forth

[00:37:58] Speaker 08:
in a statute.

[00:37:59] Speaker 08:
And it results in the same or as you recognize from the briefs, lower volatility, which is the very purpose of section 7545H was to give at the same time ethanol, a special allowance, but also protect against the volatility.

[00:38:17] Speaker 08:
So the question is, is statute ambiguous?

[00:38:20] Speaker 08:
And I think that was discussed in your questions to petitioners council.

[00:38:24] Speaker 08:
And it becomes quite clear that

[00:38:26] Speaker 08:
that it is ambiguous.

[00:38:29] Speaker 06:
Council, if we issued an order saying we want supplemental briefing containing five pages of argument, would you deem it appropriate to file a supplemental brief with 10 pages under the rationale that it contains five pages of argument and it just contains five more pages of argument?

[00:38:53] Speaker 08:
No, I would not because of the context in which

[00:38:56] Speaker 08:
That statement is used, Your Honor.

[00:39:00] Speaker 06:
But context- If I told you that Arnold Palmer is a drink that contains iced tea and 50% lemonade, would you think that if someone gave me a drink that had a teaspoon of iced tea and they filled the remainder of the glass with lemonade,

[00:39:24] Speaker 06:
that I would be receiving in all the honor of Palmer?

[00:39:29] Speaker 08:
Probably not in that case.

[00:39:30] Speaker 08:
But by the same token, there was a statute that required for a piece of jewelry to contain 10% gold to be called gold plated.

[00:39:42] Speaker 08:
And it contained 20% gold.

[00:39:46] Speaker 08:
That statute would be interpreted as at least 10%.

[00:39:50] Speaker 06:
But you've added

[00:39:53] Speaker 06:
to be called gold plated.

[00:39:56] Speaker 06:
This is a recipe.

[00:40:00] Speaker 06:
In my prior life, well, I wasn't one for very long, but I studied chemical engineering.

[00:40:10] Speaker 06:
And when something says it contains a specific percent, especially when you're dealing with chemicals, it means specifically that amount.

[00:40:22] Speaker 06:
I don't see any ambiguity here at all.

[00:40:26] Speaker 06:
Why am I wrong?

[00:40:28] Speaker 08:
It does in those given situations where the danger is in going over that amount, where it acts as a limitation.

[00:40:38] Speaker 08:
But to borrow from an example of the interveners, a restriction or a limitation which says that a fruit juice has to contain 10% real fruit.

[00:40:51] Speaker 08:
that has to be interpreted as at least 10%.

[00:40:53] Speaker 08:
And you wouldn't violate the statute by putting in 15% or 20%.

[00:40:58] Speaker 06:
Well, the regulation that was cited for that example actually had language in it that said that whatever the percentage that you put in has to be the precise percentage, right?

[00:41:14] Speaker 06:
That's what the regulation said.

[00:41:18] Speaker 08:
But again, right, it depends on the regulation, it depends on the context.

[00:41:24] Speaker 08:
And I think what we're trying to figure out is what Congress intended here.

[00:41:29] Speaker 08:
Otherwise, we are saying you have the potential to put forth a rule that whenever a number is used without a qualifier, it means exactly that number and no other number.

[00:41:39] Speaker 08:
And in this case, not even petitioners agree with that, if they agree to 10%.

[00:41:44] Speaker 08:
also means 9% and it means 90%.

[00:41:46] Speaker 04:
But isn't there a response that historically in this particular environment, indeed in this particular circumstance, everybody understood that 10% meant 10%, particularly where the House bill had the leeway that I think our questions are implying

[00:42:15] Speaker 04:
would remove any question in our mind about agency authority.

[00:42:21] Speaker 04:
And when Congress says, we're taking those qualifiers out, that is the court to say, but the agency can put them back in?

[00:42:37] Speaker 08:
Well, as your honor pointed out before, the same is true with the qualifiers on the other side that made it clear

[00:42:44] Speaker 08:
If adopted, it would be no more than 10%.

[00:42:46] Speaker 08:
And as we know, what happens in those situations where in this case qualifiers are not used, but where it's unclear, that leaves a gap for EPA to fill.

[00:42:59] Speaker 04:
Yes, but I guess my concern is simply that how are courts, much less the agencies, to know what words mean if Congress says 10,

[00:43:14] Speaker 04:
but the agency says, don't worry about it.

[00:43:16] Speaker 04:
15 is okay.

[00:43:20] Speaker 04:
I mean, I just wonder what the principles are that we're laying down.

[00:43:23] Speaker 04:
And you heard petitioners reject strongly my effort to get them to discuss this notion that where you have these factors and not all of them point in the same direction, does that leave EPA

[00:43:42] Speaker 04:
some leeway to veer away from 10.

[00:43:48] Speaker 04:
And the question is asked without any implication that EPA was technically wrong, but simply what did Congress mean?

[00:44:05] Speaker 04:
And I understand the point about, well, everybody knew a lot more

[00:44:09] Speaker 04:
10 years later than, or at least five years later, so if you're confused.

[00:44:16] Speaker 04:
But words either mean something or they don't.

[00:44:20] Speaker 04:
And even if the agency wants to achieve a wonderful result, I guess that's what I'm trying to understand about this case without suggesting one way or another.

[00:44:38] Speaker 04:
that the court is taking sides or that the court would be taking sides, whichever way it came out.

[00:44:46] Speaker 04:
But it seems to me there has to be an analysis that can withstand the test of time unless the court announces, well, we've changed our minds.

[00:44:58] Speaker 04:
So we decided to hear this matter in bank or Congress has changed its mind.

[00:45:03] Speaker 04:
And so those decisions are no longer

[00:45:07] Speaker 04:
relevant.

[00:45:09] Speaker 08:
We certainly understand that there are absolutely certain situations where you have a number like this and a statute and no matter how reasonable it is to take a more expensive view of it, you still have to go back to Congress to change that.

[00:45:23] Speaker 01:
So Mr. Rosen, what's your strongest, I mean, I see that the

[00:45:29] Speaker 01:
congressional commitment at the time to increase the share of motor vehicle fuel that was supplied by ethanol as part of the purpose.

[00:45:40] Speaker 01:
There was concern about volatility that we've since learned more about, but there also are these cross-cutting other kinds of pollutants that the petroleum petitioners were referring to and that the environmental commenters were concerned about.

[00:45:56] Speaker 01:
There may be decreases in volatility there may be corresponding decreases in carbon dioxide and non methane organics but there are increases in nitrogen oxide and particulate matter.

[00:46:08] Speaker 01:
And what's your position on on that and

[00:46:12] Speaker 01:
and how that bears on this question of leeway and also on the petitioner's characterization of EPA's view of the scope and importance of those other pollutants.

[00:46:27] Speaker 08:
And that moves over to the other statutory provisions, substantially similar provision.

[00:46:34] Speaker 08:
EPA looked at that.

[00:46:35] Speaker 08:
It did its analysis.

[00:46:36] Speaker 08:
Those determinations have to do with its reinterpretation of the statute in H4.

[00:46:42] Speaker 08:
So in the substantially similar determination, EPA looked at the very factors that are supposed to be looked at.

[00:46:48] Speaker 08:
It did its analysis and it determined that first of all, as far as evaporative emissions are concerned, they would be the same or actually reduced because of the lower volatility with E15.

[00:47:01] Speaker 08:
As to the tailpipe emissions, some emissions, some studies showed emissions going up two to 4%.

[00:47:08] Speaker 08:
Other studies showed those same pollutants not going

[00:47:12] Speaker 08:
And the studies also showed that other pollutants were reduced like carbon monoxide and other important pollutants.

[00:47:19] Speaker 08:
And what most importantly overall, what EPA found was that none of those small increases would have any material effect on the ability of the emissions equipment to control the emissions.

[00:47:32] Speaker 08:
And petitioners make no case otherwise.

[00:47:35] Speaker 08:
They don't say that that was an erroneous finding.

[00:47:39] Speaker 08:
So sure, when you change, there's always going to be

[00:47:43] Speaker 08:
changes in emissions.

[00:47:45] Speaker 08:
EPA determined that they were relatively small.

[00:47:48] Speaker 08:
And as I say, most recent studies showed they're even smaller or non-existent.

[00:47:52] Speaker 08:
There were emissions benefits on the evaporative side.

[00:47:55] Speaker 08:
And that was how EPA formulated its conclusion.

[00:47:58] Speaker 08:
And that's subject to an arbitrary and capricious standard and deference to EPA's technical analysis.

[00:48:04] Speaker 01:
I guess I really was asking about

[00:48:08] Speaker 01:
how those other potential effects of blends with a higher degree of ethanol might have borne on whether Congress was choosing, you know, we're really talking about 10% as the target.

[00:48:29] Speaker 01:
versus whether it might've been reasonable for Congress to say, EPA, it's gonna be up to you, whether it's at least and possibly more.

[00:48:37] Speaker 01:
In other words, is the fact that when you add more ethanol that you're creating these other cross-cutting risks, is that part of the argument that you have to meet or not?

[00:48:48] Speaker 08:
I mean... Not in our view on the H4, simply what the 10% means.

[00:48:56] Speaker 08:
I mean, it's...

[00:48:58] Speaker 08:
The history we've laid out, we believe that the 10% just came out of just sort of where things were at the time.

[00:49:07] Speaker 08:
That 10% is what EPA used.

[00:49:09] Speaker 08:
10% is the only commercial ethanol product that was around.

[00:49:13] Speaker 08:
10% is what was authorized under the waiver, the 1979 waiver.

[00:49:18] Speaker 08:
And it was just pretty easy for Congress to say, everybody agrees.

[00:49:21] Speaker 08:
We're only dealing with 10%.

[00:49:23] Speaker 08:
And that's how they got it.

[00:49:26] Speaker 08:
But they didn't use the modifier to cap it.

[00:49:29] Speaker 08:
And that's why we believe there's some leeway in there.

[00:49:33] Speaker 06:
And once we have- If 10% was the only thing that was around and being used, then why isn't that evidence that that's the only thing that Congress was intending to create an ethanol exclusion?

[00:49:51] Speaker 08:
We believe if there were some other evidence of that, then that

[00:49:56] Speaker 08:
that would be the plausible conclusion.

[00:49:59] Speaker 08:
But we see no technical analysis.

[00:50:04] Speaker 08:
We see no statements in the legislative history.

[00:50:07] Speaker 08:
We see no scientific basis even implied or inferred by Congress as to why that was the magic number, other than simply the fact that 10% is all that had been allowed under F, under subsection F at the time.

[00:50:25] Speaker 06:
So there was nothing in the legislative history either that there was a potential for E15 or anything containing more than 10% ethanol, nor was there anything in the legislative history or the state of the scientific knowledge that if you went above E10 and kept

[00:50:54] Speaker 06:
adding ethanol above E10 could actually decrease volatility, right?

[00:50:59] Speaker 06:
Neither of those things appear in the history.

[00:51:03] Speaker 08:
There was at least one study that spoke to your latter point, but it's unclear whether Congress considered that.

[00:51:17] Speaker 06:
Judge Rogers, I didn't want to cut you off.

[00:51:20] Speaker 04:
I did have another question.

[00:51:22] Speaker 04:
No.

[00:51:22] Speaker 04:
I was interrupting you.

[00:51:23] Speaker 04:
Sorry.

[00:51:25] Speaker 04:
I just can't.

[00:51:27] Speaker 04:
Whoops.

[00:51:28] Speaker 04:
No.

[00:51:28] Speaker 04:
Judge Wilkins, please continue.

[00:51:32] Speaker 06:
One more question.

[00:51:33] Speaker 06:
I'm sorry.

[00:51:34] Speaker 06:
I'll yield.

[00:51:36] Speaker 06:
How does the exclusion from the ethanol waiver that's in H5, how is that operative?

[00:51:46] Speaker 06:
under your construction of H4?

[00:51:51] Speaker 08:
EPA did not consider that in its analysis.

[00:51:55] Speaker 08:
EPA's analysis was focused on 10% and what Congress's intent was, the ambiguity of that term and what a reasonable interpretation is.

[00:52:05] Speaker 08:
And since EPA did not set forth explanations of the effect of H4 or H5 on its analysis, I'm not comfortable

[00:52:15] Speaker 08:
explaining what EPA's analysis might be.

[00:52:20] Speaker 08:
I think Interveners Council has a view on that.

[00:52:22] Speaker 08:
We could communicate that.

[00:52:26] Speaker 06:
Well, we have to construe this whole statute in a way that's congruent.

[00:52:32] Speaker 06:
So even if EPA didn't say anything about H5, which could in and of itself be arbitrary and capricious, you can, as counsel,

[00:52:47] Speaker 06:
tell me whether H5 is now a dead letter or is it?

[00:52:54] Speaker 08:
We don't believe H5 is a dead letter.

[00:52:58] Speaker 06:
Why not?

[00:53:06] Speaker 08:
Look at the exact wording here.

[00:53:29] Speaker 08:
Again, well, to the extent that the interpretation of H4, that you agree that it applies to 15%, then to be consistent, that would be the application throughout the entire provision.

[00:53:51] Speaker 08:
But again, that's not what was EPA's focus here.

[00:53:57] Speaker 06:
All right, thank you.

[00:53:58] Speaker 06:
I'm sorry, Judge Rogers.

[00:54:01] Speaker 04:
Oh, that's all right.

[00:54:02] Speaker 04:
I'm just trying to understand here.

[00:54:05] Speaker 04:
If the court were to opt of the ambiguity

[00:54:29] Speaker 04:
in age four, what is the limit to that type of analysis?

[00:54:45] Speaker 04:
As I understand it, you're representing a position that it really doesn't matter.

[00:54:54] Speaker 04:
These are my words, not the agency's words.

[00:54:58] Speaker 04:
what Congress said in fact, as to a percentage because the word containing has no limitation.

[00:55:15] Speaker 04:
And that gives an agency leeway.

[00:55:20] Speaker 04:
And there's good reason here

[00:55:26] Speaker 04:
consistent with the ultimate purpose of the statute to apply that leeway.

[00:55:43] Speaker 04:
That although it's not an argument that E10 was no longer a usable fuel,

[00:55:59] Speaker 04:
it seemed to be part of the past.

[00:56:06] Speaker 04:
And let's assume for the purposes of my question that the scientific community agreed with you.

[00:56:34] Speaker 08:
And I'm not certain what the question is.

[00:56:40] Speaker 04:
You want me to just copy what you wrote in your brief in the opinion?

[00:56:46] Speaker 08:
No, of course not.

[00:56:48] Speaker 04:
No, no, I mean, that could be a legitimate answer.

[00:56:51] Speaker 04:
I mean, we looked at the brief for assistance, but I just want to be sure that that's where you are after you've heard the arguments of the other two council.

[00:57:03] Speaker 08:
Yes, that's where we are.

[00:57:05] Speaker 08:
that E-10 as used in Congress has an expansive meaning.

[00:57:13] Speaker 08:
And whatever limitations are necessary on that come in through other provisions.

[00:57:22] Speaker 04:
Yeah.

[00:57:22] Speaker 04:
All right.

[00:57:24] Speaker 04:
Any further questions?

[00:57:26] Speaker 06:
So E-10, I'm sorry, containing 10%

[00:57:34] Speaker 06:
It also means containing 85%, right?

[00:57:39] Speaker 08:
Not technically, because it still has to be, well, it has to be gasoline.

[00:57:44] Speaker 08:
And gasoline has to be at least 50% gasoline.

[00:57:48] Speaker 08:
But yes, the number is, other than that, unlimited on the top side.

[00:57:54] Speaker 08:
And it's through other limitations that EPA still has to permit a fuel to be introduced into commerce.

[00:58:02] Speaker 08:
But if it is, and if it checks all those boxes, then as far as the one PSI waiver, that would apply to higher levels.

[00:58:14] Speaker 06:
Up to 49% under your construction.

[00:58:20] Speaker 06:
49% at the moment.

[00:58:23] Speaker 08:
Yes, that's correct.

[00:58:31] Speaker 04:
Judge Pillard, anything you wanted to ask?

[00:58:34] Speaker 04:
I'm fine, thank you.

[00:58:36] Speaker 04:
Thank you.

[00:58:37] Speaker 04:
All right, council, thank you.

[00:58:48] Speaker 04:
Now, I'm using council's names and titles here because there's different council representing the same party.

[00:59:00] Speaker 05:
Yes, your honor.

[00:59:01] Speaker 04:
Council, Mr. Rosen, do you want to have some response time now on your 10% argument?

[00:59:15] Speaker 02:
I believe your honor that- I'm sorry, are you- This is, yes, this is Ethan Shankman for biofuel interveners.

[00:59:24] Speaker 04:
I apologize.

[00:59:24] Speaker 02:
May I please the court?

[00:59:27] Speaker 04:
Please proceed.

[00:59:28] Speaker 02:
I'd like to cover three points if I can.

[00:59:31] Speaker 02:
I'd like to discuss H4, a quick note on standing, and then turn to subset.

[00:59:36] Speaker 02:
First, EPA's interpretation of H4 as setting a minimum threshold of 10% is supported by the ordinary usage of the word contains.

[00:59:45] Speaker 02:
I want to go back to the example of a regulation prohibiting a beverage from being labeled fruit juice, unless it contains 5% natural juice, any reasonable beverage maker would understand that language to mean contains at least 5% natural juice as opposed to contains exactly 5%.

[01:00:03] Speaker 02:
In other words, a beverage with 10% or 15% natural juice could still be labeled fruit juice.

[01:00:08] Speaker 02:
Similarly here, EPA has recently interpreted the language in H4 as setting the minimum threshold.

[01:00:15] Speaker 02:
It's not a recipe, it's a gatekeeper.

[01:00:18] Speaker 02:
As in the juice example, the use of the word contains is setting a standard.

[01:00:22] Speaker 02:
It's not describing a set of facts like this brief contains 6,900 words.

[01:00:26] Speaker 02:
And the purpose of the scheme is better served if the standard is exceeded.

[01:00:31] Speaker 02:
Now context matters.

[01:00:33] Speaker 06:
Can you give me an example of any regulation or statute written in this fashion that has been construed by a court the way that you want us to construe H-4?

[01:00:49] Speaker 02:
Yes, Your Honor.

[01:00:49] Speaker 02:
The FDA regulation that we cited, 101.30B1,

[01:00:57] Speaker 02:
is very clear that when a beverage has the label contains 10% orange juice, that that beverage could have 15% orange juice, but not 5%.

[01:01:08] Speaker 02:
It says that the percentage has to be expressed as a whole number, not greater than, but could be less than the actual percentage of the juice.

[01:01:20] Speaker 02:
In this case, Your Honor, the whole point of H4 is to ensure the continued viability of ethanol blends, to capture all the benefits of ethanol that Congress had in mind while keeping volatility within acceptable limits.

[01:01:34] Speaker 02:
And here it is undisputed that the volatility of E15 is actually lower than E10 with the same base gasoline.

[01:01:41] Speaker 02:
And Your Honors, that was a fact that was well established before the 1990 amendments.

[01:01:47] Speaker 02:
I can give you the precise citation.

[01:01:51] Speaker 02:
Joint appendix 422 cites to a 1985 study that found that the RVP curve for ethanol blends goes down after reaching a peak around 10% ethanol.

[01:02:04] Speaker 02:
And EPA started citing those studies as early as 1988.

[01:02:10] Speaker 02:
I would be glad to provide citations to the court if that would be helpful.

[01:02:14] Speaker 02:
But in any event, these facts were well known before Congress legislated in 1990.

[01:02:20] Speaker 02:
Critically, petitioners offer no good reason why Congress would have wanted H4 to impose a hard cap of 10%, which would impede the continued viability of ethanol blends while making things worse, not better, for volatility.

[01:02:33] Speaker 01:
You don't think there's any reason based on the other potential increases of the other pollutants that that was not, this is similar to the question I was asking Mr. Rosen, that that was not, wouldn't have been a reason, was not in fact a reason for Congress to say

[01:02:54] Speaker 01:
we're going to stick with the known, we're going to authorize only 10% because, you know, the graphs sort of go, some get better, some get worse for other reasons above 10%.

[01:03:09] Speaker 02:
Absolutely not, Your Honor.

[01:03:10] Speaker 02:
The only pollutant, the only pollution problem that was of concern to H was volatility.

[01:03:16] Speaker 02:
All other pollutant issues are dealt with in other sections of Section 211, in particular 211F, which is where EPA did that analysis here, and 211C, which allows EPA to regulate other air pollutants.

[01:03:32] Speaker 02:
And of course here, EPA found that there was no material difference between

[01:03:36] Speaker 02:
E15 and E10, the gasoline that it would be replacing with respect to any of the pollutants.

[01:03:44] Speaker 02:
But that's key.

[01:03:45] Speaker 02:
H4 was concerned just with volatility.

[01:03:50] Speaker 02:
Now, further support for EPA's interpretation is found in the second clause of H4, which I'd like to turn to the so-called deemed to comply provision, which is H4B.

[01:04:00] Speaker 02:
That provides blenders with a compliant shortcut.

[01:04:02] Speaker 02:
To be deemed a compliance, a blender need only show that the ethanol, quote, the ethanol portion of the blend does not exceed its waiver condition under subsection F4.

[01:04:12] Speaker 02:
But any ethanol blend can apply for an F4 waiver.

[01:04:15] Speaker 02:
It's not pegged to any particular volume.

[01:04:17] Speaker 02:
Indeed, E15 itself has an F4 waiver.

[01:04:21] Speaker 02:
Congress would not have based the deemed to comply provision on the maximum percentage allowed under an F4 waiver if it intended to freeze ethanol blends forever at 10%.

[01:04:33] Speaker 02:
And by the way, Your Honors, I would also like to point out that EPA does agree with this argument.

[01:04:37] Speaker 02:
EPA makes this argument in its preamble at Joint Appendix 29 and Joint Appendix 55.

[01:04:42] Speaker 02:
It agrees with this interpretation of deemed to comply and it cites it specifically as additional support for its interpretation of H4 as providing a minimum percentage.

[01:04:54] Speaker 06:
You're arguing that the deemed to comply was drafted because there could be some future new blends

[01:05:06] Speaker 06:
approved under F4.

[01:05:10] Speaker 06:
But the legislative history in the regulatory context prior to 1990 made clear that Congress put the deemed to comply provision in only to obviate the testing requirements for downstream lenders, and that's it.

[01:05:32] Speaker 02:
Yes, Your Honor, the purpose of the deemed comply provision is to provide blenders with an alternative means of appliance.

[01:05:39] Speaker 02:
That is true because of the difficulties involved in testing the blend after it was produced.

[01:05:46] Speaker 02:
Our point is Congress would not have framed or constructed that alternative compliance mechanism by reference to whatever is the maximum percentage allowed under F4.

[01:06:00] Speaker 02:
if what Congress had in mind was an absolute cap on ethanol at 10%, it would have simply referred to ethanol at 10%.

[01:06:11] Speaker 01:
Are there other conditions other than the percentage in a waiver?

[01:06:15] Speaker 01:
So when it talks about not exceeding waiver conditions, why should we read that as not exceeding the percentage of ethanol as opposed to other waiver conditions?

[01:06:26] Speaker 01:
Is that even a coherent question?

[01:06:28] Speaker 02:
No, that's a very coherent question, Your Honor.

[01:06:31] Speaker 02:
First of all, EPA has specifically addressed that, interpreted this provision as applying only to the volume ethanol percentage, and petitioners do not challenge that aspect of EPA's interpretation.

[01:06:47] Speaker 02:
But textually, the phrase in the deemed to comply provision says,

[01:06:52] Speaker 02:
the ethanol portion of the blend.

[01:06:55] Speaker 02:
So it's talking about the portion, it's talking about the percentage, and that's why that's the only thing that matters.

[01:07:01] Speaker 02:
Now, it's also important to realize, Your Honors, that EPA's final rule

[01:07:12] Speaker 02:
and this steam to comply provision that we've been discussing.

[01:07:15] Speaker 02:
They are both consistent with the original regulatory approach that EPA was taking back in 1988, 1990 at the time that the Clean Air Act amendments were passed.

[01:07:27] Speaker 02:
Under those regulations that existed at the time, EPA applied a one PSI tolerance to ethanol blends of at least 9% ethanol with no upper limit other than the maximum percentage allowed under an F4 waiver.

[01:07:41] Speaker 02:
Yes, at the time, and for 20 years from that point forward, the only F4 waiver was for E10, but clearly EPA contemplated the possibility that there would be subsequent F4 waivers for higher percentages of ethanol blends.

[01:07:56] Speaker 02:
And that was carried forward by Congress, that concept in the deemed to comply provision.

[01:08:04] Speaker 02:
Your Honor, may I?

[01:08:06] Speaker 02:
I would like to be able to say a quick word on standing and a quick word on subsim if the court would allow me to do so.

[01:08:14] Speaker 04:
A quick word.

[01:08:17] Speaker 02:
Okay, for the reasons given in our brief, your honor, if this court agrees with EPA's interpretation of H4, then petitioners lack standing to challenge the subsim interpretation and the court doesn't need to reach it.

[01:08:31] Speaker 02:
That's because EPA proposed two alternative approaches to addressing section 211F.

[01:08:37] Speaker 02:
Petitioners only challenge the first and not the second.

[01:08:40] Speaker 02:
We submitted a declaration

[01:08:42] Speaker 02:
which from an expert establishing that the same level of E-15 sales will be achieved under either approach and that declaration was unrebutted.

[01:08:51] Speaker 02:
So whatever increased E-15 sales that petitioners cite as the basis for their injury will occur.

[01:08:59] Speaker 02:
so long as the court upholds the H4 interpretation.

[01:09:02] Speaker 02:
There's no redressability to go on to challenge the subsim interpretation, and that's discussed in our brief.

[01:09:11] Speaker 02:
And then with respect to subsim, Your Honors, it was perfectly reasonable for EPA to have conducted the subsim analysis at 9 PSI as opposed to 10 PSI.

[01:09:22] Speaker 02:
Subsection F1 does not dictate how EPA is to conduct a subsim analysis, leaving the agency with broad discretion.

[01:09:30] Speaker 02:
Here, the relevant certification fuels, E10 at 9 PSI, and EPA reasonably conducted an apples to apples comparison, 9 PSI to 9 PSI.

[01:09:38] Speaker 02:
And that was reasonable because Congress separately addressed the volatility issue in Section 211H.

[01:09:45] Speaker 02:
which requires an automatic one PSI tolerance with no additional air emissions or air emission controls analysis required.

[01:09:53] Speaker 02:
EPA's approach in the final rule harmonizes H4 and F1 and gives full effect to both.

[01:10:00] Speaker 02:
We would urge the court to affirm EPA's final rule.

[01:10:03] Speaker 02:
Thank you.

[01:10:05] Speaker 04:
Thank you.

[01:10:08] Speaker 04:
All right, now.

[01:10:13] Speaker 04:
Council.

[01:10:15] Speaker 04:
for Industry Petitioner Group, Kevin Long.

[01:10:21] Speaker 07:
Thank you, Your Honor.

[01:10:22] Speaker 07:
A few points.

[01:10:23] Speaker 07:
I'll start where Interveners Council ended on the standing point.

[01:10:27] Speaker 07:
Interveners expert concedes, and this is at pages seven to eight of their appendix, paragraph 15, that a portion of the industry is subject to the F1 substantial similarity determinations and would be affected by it.

[01:10:42] Speaker 07:
And therefore, there are several

[01:10:46] Speaker 07:
fuel manufacturers who are affected by this, such that it will have an impact in the marketplace and therefore API FPM and others have standing here because there is that impact.

[01:10:57] Speaker 07:
Indeed, EPA itself said it pages 28 to 29 of the appendix and the carryover paragraph.

[01:11:02] Speaker 07:
that it presumes and understands that its rule will have this effect.

[01:11:07] Speaker 07:
And it's especially ironic.

[01:11:08] Speaker 07:
Interveners here are now arguing that this rule that they lobbied for and that EPA dedicated 16 pages of the Federal Register to will have no effect.

[01:11:16] Speaker 07:
It's not plausible in light of those statements.

[01:11:19] Speaker 07:
So I think that opens and shuts on standing, which, by the way, no one else is challenged.

[01:11:25] Speaker 07:
Getting to the merits, you heard EPA's counsel during this argument concede that its interpretation of paragraph H4 has no limit.

[01:11:34] Speaker 07:
It goes all the way, it takes containing 10% and takes it all the way up to 49% and it would go to 99.9% but for other factors.

[01:11:42] Speaker 01:
Standing on its own.

[01:11:43] Speaker 01:
He did say standing on its own that there are other considerations and provisions that would limit it.

[01:11:50] Speaker 07:
Right.

[01:11:51] Speaker 07:
As I understand it, standing on its own, it goes to 49.9% and then the other factors are what limits it there.

[01:11:57] Speaker 07:
Otherwise, it'd go to 99%.

[01:11:58] Speaker 01:
And that's... I thought he was saying there were other factors that limit the extent to which it goes from 15 to anywhere higher.

[01:12:06] Speaker 01:
That's how I understood him to be described.

[01:12:09] Speaker ?:
Yes.

[01:12:10] Speaker 01:
that the language itself doesn't do the work, but that other considerations do.

[01:12:16] Speaker 01:
And that's why, indeed, I mean, they have, as you know, they have a challenge from the other side and they're defending their decision to stop at 15 based on other considerations.

[01:12:28] Speaker 07:
Your Honor, looking at paragraph H, my understanding is EPA has said that it means at least 10%, that there's no limit on that.

[01:12:34] Speaker 07:
There may be limits elsewhere in the scheme, but we're talking here about what's a reasonable interpretation of that.

[01:12:40] Speaker 07:
And I guess, you know, we would agree with Judge Wilkins that this is a formula, a recipe.

[01:12:46] Speaker 07:
It says containing gasoline and 10% ethanol, and EPA has just said that it sees that as imposing no limit at all.

[01:12:52] Speaker 07:
That's just not a reasonable construction considering the context here, right Congress consider language that would have expressly set a floor, it rejected it consider language that would have expressly set a ceiling, it rejected that as well instead, it set a specific requirement.

[01:13:07] Speaker 07:
So that's the context.

[01:13:10] Speaker 07:
And it means, you know, Judge Rogers, to your point, EPA does retain discretion here, but they need to target 10%.

[01:13:19] Speaker 07:
That's the limit.

[01:13:20] Speaker 07:
They need to be taking a good faith effort to allow folks to aim at 10%.

[01:13:24] Speaker 07:
And that might mean 9% or 8.5% or 11%, but it doesn't mean 49%.

[01:13:32] Speaker 07:
In the context here, as some of the judges have acknowledged and recognized involves scientific and technical changes.

[01:13:39] Speaker 07:
things that might have been in Congress's mind when it was acting in 1990.

[01:13:43] Speaker 07:
And to that point, I guess I think it's really important to call out Justice Sotomayor's opinion for the Supreme Court just two weeks ago in the Facebook case, where Justice Sotomayor explained that technological change and notions of a statute's purpose cannot overcome the clear text.

[01:13:59] Speaker 07:
That principle we think has equal application here.

[01:14:04] Speaker 07:
With respect to the compliance defense, it's notable that intervener's argument would create a gross asymmetry in the statute.

[01:14:13] Speaker 07:
If interveners were correct about what that compliance defense meant, then manufacturers would be subject to one limit and blenders and others would be subject to a different one, right?

[01:14:24] Speaker 07:
For manufacturers, it would be infinite, as much ethanol as you want.

[01:14:29] Speaker 07:
And for everybody else, it would be the F4 waiver condition.

[01:14:32] Speaker 07:
There's no evidence at all that Congress intended the volatility limit to work in that fashion.

[01:14:38] Speaker 07:
And again, you know, reading it, interveners way would nullify the H5 option for states to disable the volatility allowance.

[01:14:53] Speaker 07:
How so, it would disable it because again, the second part of H for the compliance defense says that meeting those requirements is a defense.

[01:15:05] Speaker 07:
It satisfies compliance with this subsection.

[01:15:09] Speaker 07:
And so it would operate irrespective of age five.

[01:15:12] Speaker 07:
And you don't need to take it from me.

[01:15:13] Speaker 07:
Again, EPA said this, 76 federal register at 44, 434 to 435.

[01:15:19] Speaker 07:
That's EPA's interpretation on it.

[01:15:22] Speaker 07:
And I'm just repeating what they said, because I think it's persuasive.

[01:15:25] Speaker 07:
We agree with it.

[01:15:26] Speaker 01:
Well, you can also in the preamble and I think it's no 91 they they talked about as as Mr. Rosen did today their interpretation.

[01:15:37] Speaker 01:
Continuing to allow H5 to operate.

[01:15:40] Speaker 01:
NGA 13.

[01:15:44] Speaker 01:
So maybe they said conflicting things on this, but I did not take them to to.

[01:15:51] Speaker 01:
To agree with you that H5 would be rendered in inoperable.

[01:15:56] Speaker 07:
Well, I think actually we're on the same side with EPA on this narrow issue.

[01:16:00] Speaker 07:
And you saw that maybe a little bit from the pause from Mr. Rosen.

[01:16:05] Speaker 07:
We agree with EPA that H5 is not disabled.

[01:16:08] Speaker 07:
And the reason it's not disabled is that intervener's interpretation is not correct.

[01:16:12] Speaker 07:
Right.

[01:16:13] Speaker 07:
There are some areas where we agree with EPA here and some areas where we disagree.

[01:16:17] Speaker 07:
But this is one my understanding is where we agree.

[01:16:21] Speaker 07:
And that brings me to where I'd like to close, if you don't mind, Your Honors.

[01:16:26] Speaker 07:
Judge Rogers, this goes to your question about taking sides.

[01:16:29] Speaker 07:
A ruling that enforces the 10% requirement in the statute would not be taking sides here, because even without this rule, E-15 can still be sold.

[01:16:38] Speaker 07:
Yes, it can be sold at 9 PSI, which is, by the way, is a lower level of volatility that unquestionably would involve fewer emissions.

[01:16:45] Speaker 07:
So, in that world EPA would still have some discretion about what it means for fuel to be containing 10% ethanol, but that discretion would not be limitless, it would be cabined in some way to be tied to real world practicalities of the blending process.

[01:17:00] Speaker 07:
Your honors, for all those reasons, we urge you to vacate the rule.

[01:17:03] Speaker 07:
You need on this suite of issues go no further than the H4 issue.

[01:17:09] Speaker 07:
You wouldn't need to get to substantial similarity in all of those other questions because the rule as EPA indicated at page four of the appendix is not severable.

[01:17:17] Speaker 07:
Thank you, your honors.

[01:17:20] Speaker 04:
Thank you.

[01:17:24] Speaker 04:
All right, Council Dawson.

[01:17:26] Speaker 00:
Thank you, Your Honor.

[01:17:27] Speaker 00:
I just have two really quick points on rebuttal.

[01:17:29] Speaker 00:
First, to make a factual distinction from what Mr. Rosen explained with regard to the difference between E10 and E15, E15 doesn't have 5% more ethanol than E10.

[01:17:41] Speaker 00:
It has 50% more ethanol.

[01:17:43] Speaker 00:
And that is an important distinction when looking at what is substantially similar and what is not.

[01:17:48] Speaker 00:
Second, EPA has not disavowed the conclusion it reached in the partial waivers in 2011 at 76 FR 4675 when it explained that E-15 at 10 PSI will lead to motor vehicles exceeding their evaporative emission standard in use.

[01:18:06] Speaker 00:
And that just goes to show how acrobatic EPA's interpretation of the statute had to be.

[01:18:12] Speaker 00:
in the E-15 rule.

[01:18:14] Speaker 00:
Because it couldn't get around that conclusion in F-4, it had to reinterpret two other statutory provisions to allow E-15 at 10 PSI to be sold.

[01:18:23] Speaker 00:
And we believe that that is arbitrary and capricious.

[01:18:26] Speaker 00:
And for that reason, the court should vacate the E-15 rule.

[01:18:30] Speaker 00:
Thank you.

[01:18:31] Speaker 04:
All right.

[01:18:32] Speaker 04:
Thank you.

[01:18:34] Speaker 04:
We will take part one under consideration and move to part two.

[01:18:45] Speaker 04:
Mr. Barry.

[01:18:48] Speaker 09:
Good morning, your honors, and may it please the court.

[01:18:51] Speaker 09:
My name is Jonathan Barry, and I'm here on behalf of the Urban Air Initiative petitioners.

[01:18:56] Speaker 09:
I'd like to reserve three minutes for rebuttal.

[01:18:59] Speaker 09:
I'd like first to break down our first claim, which turns on the meaning of the substantially similar law in F, 211F1.

[01:19:08] Speaker 09:
In our view, EPA's key mistake here jumps out at page two of its brief when it reads the words fuel or fuel additive as, quote, collectively new fuel.

[01:19:22] Speaker 09:
So how does EPA justify reading out this term, the term fuel additive?

[01:19:26] Speaker 09:
They do it by reading the word fuel as meaning finished fuel.

[01:19:31] Speaker 09:
That is the mixture that contains not only pure gasoline but also blended additives like ethanol at a specific concentration.

[01:19:39] Speaker 09:
So E10, E15, these are finished fuels.

[01:19:43] Speaker 09:
EPA thus says that a fuel manufacturer can't apply the register E20 because it's not subsim to the finished fuel E10.

[01:19:51] Speaker 09:
But here's the problem.

[01:19:53] Speaker 09:
If fuel means finished fuel, then the sub-similar second verb, increase the concentration and use of, has no effect.

[01:20:01] Speaker 09:
Every time a fuel maker says, hey, EPA, I'd like to increase the concentration and use of a fuel additive that's in a surf fuel, EPA would say, no, that's introducing into commerce a new finished fuel.

[01:20:15] Speaker 09:
On EPA's reading, there's no additional conduct prohibited by that second verb.

[01:20:21] Speaker 09:
And so we think there's only one way to rescue the second verb and the term fuel additive from surplusage.

[01:20:27] Speaker 09:
You need to give it the word fuel.

[01:20:29] Speaker 09:
It's narrower reading, not finished fuel, but neat fuel, like pure gasoline, pure diesel.

[01:20:36] Speaker 09:
With that narrower reading, the prohibition's two verbs and the reference to fuel additive all have separate effect.

[01:20:43] Speaker 09:
And we believe that if this reading is right, then the presence of the fuel additive ethanol and the ethancer fuel satisfies the sub-sim laws condition.

[01:20:52] Speaker 09:
And ethanol producers like our petitioners can apply for registration where they'll need to satisfy EPA's rules on testing for health and environmental effects emissions and so on.

[01:21:02] Speaker 09:
But on our reading, they're no longer shut out of the registration office and they qualify for the RVP waiver as well.

[01:21:09] Speaker 01:
Mr. Barry.

[01:21:11] Speaker 06:
I'll help.

[01:21:12] Speaker 06:
Go ahead.

[01:21:13] Speaker 01:
No, go ahead, Judge Wilkins.

[01:21:17] Speaker 06:
How do you have standing, I don't know if it's standing or final agency action problem, but how is it that the E-15 rule changed the rights and responsibilities of anything containing more than the

[01:21:42] Speaker 06:
15.

[01:21:46] Speaker 09:
So your honor, we believe that there are a, there's a couple of different of avenues there.

[01:21:53] Speaker 09:
I think the one that is most straightforward is the question of eligibility for that, for the H4 waiver, for that one PSI waiver on EPA's interpretation of that provision, which we completely agree with.

[01:22:10] Speaker 09:
any entity dealing with a blend that contains at least 10% ethanol is entitled to sell that finished fuel at 10 PSI.

[01:22:27] Speaker 09:
But then EPA comes in additionally and caps

[01:22:32] Speaker 09:
that according to its sub-SIM determination.

[01:22:36] Speaker 09:
So that sub-SIM determination cuts off the ability of folks to sell those mid-level blends like E20.

[01:22:46] Speaker 01:
Mr. Barry, you didn't make that particular harm argument your opening brief, did you?

[01:22:50] Speaker 01:
You made in your reply brief the argument you just articulated, that mid-level fuel manufacturers can't access the one PSI volatility waiver that's available under E20.

[01:23:02] Speaker 01:
Is that, why is that not a reason for us not to consider that in the standing analysis?

[01:23:11] Speaker 01:
Why is it not forfeit?

[01:23:15] Speaker 09:
Bear with me for just a moment, your honor.

[01:23:18] Speaker 09:
So our,

[01:23:26] Speaker 09:
You know, our affidavits, Your Honor, speak to standing.

[01:23:33] Speaker 09:
So this is A1 and A2 in our opening brief.

[01:23:38] Speaker 09:
And so, for example, this is at A1, our retailer petitioner that submits an affidavit

[01:23:50] Speaker 09:
states, I understand the E15 rule would purport to make it illegal or impractical for jumpstart stores to sell mid-level blends.

[01:23:59] Speaker 09:
This is paragraph four.

[01:24:01] Speaker 09:
For example, the rule limiting the one PSI waiver to fuel blends containing no more than 15% ethanol would make it impractical to sell mid-level blends during the summer.

[01:24:15] Speaker 01:
And so the finality argument is that somehow allowing blends with 11 to 15% ethanol carries some kind of negative implication with respect to higher concentrations.

[01:24:36] Speaker 01:
Nobody disputes that the rule is final

[01:24:42] Speaker 01:
where it applies.

[01:24:45] Speaker 01:
But I think, and this is really piggybacking on Judge Wilkins question, how has it affected producers of higher concentration blends who couldn't access the one PSI volatility waiver before, who weren't treated

[01:25:07] Speaker 01:
the way that E15 is now treated, but still are in really the same position.

[01:25:14] Speaker 09:
Right.

[01:25:17] Speaker 09:
So I think the way I think the way to unpack this a little bit is to start with the observation that

[01:25:24] Speaker 09:
We don't simply examine state of affairs pre-rule compared to state of affairs post-rule.

[01:25:32] Speaker 09:
The source of the disability to sell at that 10 PSI has changed.

[01:25:44] Speaker 09:
That was previously traceable to, and I recognize I'm commingling a little bit on finality and standing here, but previously it was treating the H4's number as a ceiling.

[01:26:04] Speaker 09:
That was previously the source of the disability.

[01:26:07] Speaker 09:
Now it's the subsim determination is the source of the disability.

[01:26:12] Speaker 01:
And why is it a disability though?

[01:26:14] Speaker 01:
That's what I'm not seeing.

[01:26:15] Speaker 01:
It's just, you know, agencies operate step by step and here there's more familiarity with E15 and they just said, we're going to go step by step.

[01:26:27] Speaker 01:
And this is how far we're going.

[01:26:29] Speaker 01:
How does that impose a disability?

[01:26:35] Speaker 09:
Your honor, it's because EPA's legislative rulemaking on H4 caps eligibility at 15%.

[01:26:46] Speaker 09:
So if we have a retailer who wishes to sell E20, even though EPA agrees the statute allows that, the rule takes it away.

[01:27:00] Speaker 01:
That's a source of an injury.

[01:27:05] Speaker 01:
repeating myself in a sense.

[01:27:06] Speaker 01:
But can you point us to anything in the rule that suggests that EPA has reached a final decision that E-20 or some other mid-level blend is not substantially similar to, let's say, E-15 or E-10?

[01:27:27] Speaker 09:
What EPA chose to do, Your Honor, is to

[01:27:34] Speaker 09:
is to limit eligibility on the scope of its particular sub-SIM determination here.

[01:27:44] Speaker 09:
What do you think?

[01:27:45] Speaker 01:
They're letting the first few people in the door or the first few blends in the door.

[01:27:52] Speaker 01:
Have they said anything more than that's gonna be a different rulemaking?

[01:27:56] Speaker 01:
And in fact, I know you have a petition for rulemaking and a petition for reconsideration pending?

[01:28:03] Speaker 09:
Yes, it's the same document.

[01:28:05] Speaker 09:
They're in the alt.

[01:28:06] Speaker 09:
Yeah.

[01:28:07] Speaker 01:
And what's the status of that?

[01:28:10] Speaker 09:
So that's that's pending with the agency.

[01:28:13] Speaker 09:
And that's that's that's kind of it.

[01:28:16] Speaker 01:
And the mid-level blend producers are able under current law to to sell for flex fuel vehicles, right?

[01:28:26] Speaker 09:
Well, Your Honor, that is

[01:28:28] Speaker 09:
So that's been put under a cloud by this rulemaking.

[01:28:35] Speaker 09:
And so for example, and that's part of the subject of that petition is whether the

[01:28:48] Speaker 09:
And I apologize for a little bit of context on this.

[01:28:51] Speaker 09:
EPA's regulatory definition of fuel manufacturer excludes oxygenate blenders.

[01:28:56] Speaker 09:
Fuel retailers like our petitioner who have these blender pumps from the regulatory classification of fuel manufacturer provided that they mix in ethanol or oxygenates at an otherwise allowable amount.

[01:29:11] Speaker 09:
And the implication of

[01:29:12] Speaker 09:
this rulemaking appears to be that otherwise allowable is capped at this at this substance.

[01:29:20] Speaker 01:
Isn't there an undisturbed flex fuel rule still on the books?

[01:29:27] Speaker 01:
That's 80.1504 a three that allows it says no person shall be prohibited from manufacturing, etc.

[01:29:36] Speaker 01:
Gasoline containing greater than 10 volume percent ethanol into any flex fuel vehicles.

[01:29:42] Speaker 01:
So it seems to say to the extent there was a flex fuel market separate and apart that is

[01:29:51] Speaker 01:
I think that's undisturbed, but you're suggesting there's some kind of disability that spills over from this rule that would cabin the permission that that rule grants?

[01:30:00] Speaker 09:
I mean, at the very least, Your Honor, I think that this rulemaking plainly caps the availability of the one RVP waiver in those contexts.

[01:30:14] Speaker 01:
I was not available for flex fuel for for sellers of mid-level blends to flex fuel vehicles previously.

[01:30:23] Speaker 09:
So the challenge your honor is that EPA is now of the view that the

[01:30:30] Speaker 09:
that since H4 is to be viewed as a floor, that it should be available, but for that, that cap.

[01:30:38] Speaker 01:
I'm just trying to, as a matter of positive law, it wasn't available before.

[01:30:42] Speaker 01:
It is still not available.

[01:30:44] Speaker 01:
You have a much stronger argument that it should be available.

[01:30:47] Speaker 01:
And you're saying, you know, great, this new interpretation that it is a floor should help us.

[01:30:56] Speaker 01:
EPA has said, well, we're going to do this project now, which has to do with up to E15.

[01:31:05] Speaker 01:
But they haven't said, and in so doing, we've told you we're never going to do yours.

[01:31:10] Speaker 01:
And so I'm just trying to figure out what has been finally decided with respect to the things that were not on the agenda.

[01:31:23] Speaker 09:
EPA, and this goes to a point from the previous portion of the argument, EPA caps their stated reasoning, caps the availability.

[01:31:33] Speaker 09:
It's not that our VP waiver is unlimited in its accessibility.

[01:31:36] Speaker 09:
It caps it at both substantial similarity and at applying only to gasoline.

[01:31:41] Speaker 09:
Those are the kind of the two integrated factors there.

[01:31:46] Speaker 09:
But what EPA, and in our view, EPA could have stopped there.

[01:31:52] Speaker 09:
But it went on to make this specific subsim determination and import that determination into a hard numeric ceiling that we believe is injurious.

[01:32:09] Speaker 06:
The problem that I have with this is that it's like saying that if an agency said, we're going to create a new waiver for apples and then

[01:32:22] Speaker 06:
the people who grow oranges say, well, we want you to include us in that waiver as well.

[01:32:30] Speaker 06:
And the agency doesn't.

[01:32:32] Speaker 06:
And it just says, we're granting this new waiver for apples.

[01:32:38] Speaker 06:
Then that's opening the door for the orange producers to sue to say,

[01:32:46] Speaker 06:
Well, we're harmed because you didn't extend this new, you know, waiver to us.

[01:32:53] Speaker 06:
But we wouldn't do that.

[01:32:54] Speaker 06:
We would say, you know, file your petition for rulemaking to get your own waiver.

[01:32:59] Speaker 06:
And if that's denied, then we'll review that on the merits.

[01:33:03] Speaker 06:
I mean, just because you're adjacent to E-15, when the agency says we're considering what we should do about E-15,

[01:33:16] Speaker 06:
and you say, well, me too, but the agency makes its decision with respect to E-15, that doesn't change your status at all.

[01:33:31] Speaker 06:
And it seems like, you know, it's the same as the apples and oranges hypo.

[01:33:37] Speaker 06:
What am I missing?

[01:33:39] Speaker 09:
What I think the key issue here, Your Honor, is that F1, unlike F4, is not a waiver provision.

[01:33:49] Speaker 09:
F1 is self-executing by its terms, whereas F4 requires that affirmative act by EPA to do so.

[01:33:58] Speaker 09:
I think this also helps explain why EPA's subsim determination

[01:34:03] Speaker 09:
is styled an interpretive rule deliberately and not a legislative rule.

[01:34:09] Speaker 09:
But to be a little bit more specific, once EPA undertakes, and we believe they had discretion to not do this, but once they undertake to make a specific subsim determination under the self-executing statutory provision of F1, they have an obligation not to misstate the law,

[01:34:27] Speaker 09:
when it comes to the text of F1, or misconstrued the law rather, and they also have, they're also required to not, they're required to consider responsible alternatives to the proposal and not give non-arbitrary reasons, not give arbitrary reasons for cutting off the inquiry.

[01:34:51] Speaker 01:
Is your petition, did it even challenge the h1 many you you point to it in your reply brief as the source of the harm, but your, your petition is focused on f1, and I'm just

[01:35:07] Speaker 01:
You know, it seemed like that was really pretty clearly all that you were, you were challenging was the limitation on the f1 construction that the rule embodies and yet you're kind of sneaking in a different challenge through the back door.

[01:35:23] Speaker 09:
Your honor, the issue here is that EPA's construction of H4 bakes in what we believe to be this erroneous construction of, like legally erroneous construction of F1, factually as a matter of kind of black letter admin law, a failure to consider the responsible alternative of E20.

[01:35:53] Speaker 09:
All right.

[01:35:56] Speaker 09:
All right.

[01:35:56] Speaker 09:
If I may just very, very briefly, Your Honor.

[01:36:01] Speaker 09:
uh, add that, um, we don't believe there's a, there's a parade of orables or a floodgates argument that gets made here.

[01:36:08] Speaker 09:
Uh, we believe this, this court has already identified, um, how, um, 211 presents this integrated scheme.

[01:36:15] Speaker 09:
Um, 211 F is simply one tumbler in a much larger lock.

[01:36:19] Speaker 09:
There's lots of other tumblers in registration, not before you even get to 211 C's regulatory authority, uh, that have to be thrown before, um, uh, before these products may flow.

[01:36:32] Speaker 04:
All right.

[01:36:33] Speaker 04:
Thank you, Council.

[01:36:34] Speaker 04:
Why don't we hear now from Council Dawson?

[01:36:41] Speaker 04:
Am I right about that?

[01:36:42] Speaker 04:
No, I'm not.

[01:36:44] Speaker 04:
Council Rosen.

[01:36:45] Speaker 04:
Yes, Council, well, EPA, for EPA, first Council Rosen.

[01:36:54] Speaker 08:
Thank you.

[01:36:55] Speaker 08:
Thank you, Your Honor.

[01:36:56] Speaker 08:
In our view, you focused on the central issue and the obviously initial issue

[01:37:01] Speaker 08:
that the UAI petitioners lack standing and lack of final agency action.

[01:37:07] Speaker 08:
The challenge rule, this E-15 rule does not prohibit mid-level blends, E-16, D-50, we'll call it mid-level blends.

[01:37:15] Speaker 08:
It doesn't place any restriction on the use of those blends.

[01:37:19] Speaker 01:
What about the volatility point?

[01:37:21] Speaker 08:
The volatility point is under H-1 and these petitioners did not sue under H-1.

[01:37:27] Speaker 08:
They said exclusively that their challenge is the F-1 termination.

[01:37:32] Speaker 08:
And no one even requested that mid-level blends be considered for the F1 determination here.

[01:37:44] Speaker 08:
EPA made it very clear that this rule only has to do with E15.

[01:37:47] Speaker 08:
That's what the president directed EPA to look at.

[01:37:50] Speaker 08:
That's what EPA said we're going to look at.

[01:37:52] Speaker 08:
And that's what EPA did look at.

[01:37:56] Speaker 08:
As the court knows, a change in

[01:37:59] Speaker 08:
requirements or restrictions placed on a party have to come from a change in the regulation.

[01:38:06] Speaker 08:
Petitioners point to no change in the regulatory language that's included at the end of the preamble that has anything to do with mid-level plans.

[01:38:16] Speaker 01:
In considering standing, we assume this petitioner's success on the merits.

[01:38:24] Speaker 01:
In finality, I haven't seen that articulated in that way.

[01:38:30] Speaker 01:
And so I've just gone back and forth between whether their argument is a finality argument or a merits argument.

[01:38:37] Speaker 01:
I mean, how do we decide finality without, in some sense, prejudging the merits of their argument?

[01:38:43] Speaker 01:
I don't know if you can help me out with that.

[01:38:46] Speaker 08:
I think it's because finality, when you look at finality of an agency action, you look typically at the agency has looked at the issue, considered the issue, but not come to a final decision.

[01:39:00] Speaker 08:
You don't even get there here because they did nothing.

[01:39:05] Speaker 08:
EPA proposed nothing and took no action.

[01:39:09] Speaker 08:
They took no final action.

[01:39:11] Speaker 08:
They took no preliminary action because they were never asked to.

[01:39:14] Speaker 08:
Petitioners in their affidavit that they submit from jumpstart stores, as counsel mentioned, they allege injury because they cannot sell E-16 to E-50 for use in light duty vehicles.

[01:39:29] Speaker 08:
But that's not the fault of EPA.

[01:39:31] Speaker 08:
And it's certainly not the fault of this particular regulation.

[01:39:34] Speaker 08:
It's the fault of jump start stores and UAI who've not gone ahead and seek a substantially similar determination.

[01:39:44] Speaker 08:
Or this statute even has an alternative path for them to seek, which is a waiver.

[01:39:49] Speaker 08:
They just can submit a waiver, submit the data that supports their waiver, and wait for the decision.

[01:39:55] Speaker 08:
If EPA rejects that request, that can be challenged.

[01:40:00] Speaker 08:
But no such request has been made here.

[01:40:07] Speaker 01:
Does it bear on this at all, or is it just a fact in the world that they have their petition pending for reconsideration and for rulemaking?

[01:40:16] Speaker 08:
In our view, that's just evidence that they understand the correct path to take, that they can go to EPA and say, we think E20 or E25 is a fuel that EPA should

[01:40:29] Speaker 08:
either find is substantially similar to a certification fuel like E10 or alternatively that it should grant a waiver because it doesn't have significant and kind of significant impacts on emissions controls.

[01:40:40] Speaker 08:
And that's what they, in a somewhat convoluted way, but that's what they have done, but they're too impatient to wait for the answer.

[01:40:49] Speaker 08:
And that's the proper procedure to follow.

[01:40:54] Speaker 08:
This is a little bit that Wilk is picking up on your

[01:40:57] Speaker 08:
example of oranges and apples.

[01:40:59] Speaker 08:
The one that I thought of is if the Department of Transportation is looking at expansion of freight and is looking at a rule to expand railroad tracks by two feet on each side, that a shipper comes in and says, well, that rule's invalid because you didn't extend the length of tankers by 100 feet, because that would also increase that.

[01:41:23] Speaker 08:
It's the same general subject matter, but it has nothing to do

[01:41:26] Speaker 08:
with the rule that's before the agency.

[01:41:29] Speaker 08:
They can go in and make a special request.

[01:41:31] Speaker 08:
EPA would rule on it.

[01:41:32] Speaker 08:
They could have a challenge.

[01:41:35] Speaker 01:
So I take it that you would, that there's been no change to the ability of mid-level blenders to sell for flex fuel vehicles.

[01:41:49] Speaker 01:
I mean, that's just still the same as it was.

[01:41:52] Speaker 08:
That's exactly the same.

[01:41:53] Speaker 08:
They are permitted to do that, yes.

[01:41:55] Speaker 01:
Nothing in the E-15 rule changes that.

[01:41:58] Speaker 08:
Nothing in the E-15 rule changes that or speaks to that.

[01:42:05] Speaker 08:
If we get to the substance and UAI's core argument, the core argument is basically once any fuel with an additive is approved, then any other fuel with any concentration of that additive has to be approved.

[01:42:23] Speaker 08:
EPA has no choice.

[01:42:25] Speaker 08:
Just because the additive has the same name, it has to be approved.

[01:42:31] Speaker 08:
Forget the data, forget the analysis of the impacts, forget the effect on pollution control devices, forget that it actually could increase pollutants to a large degree.

[01:42:42] Speaker 08:
Their view is that it has to be approved.

[01:42:45] Speaker 08:
And that interpretation would subvert the sole purpose of the statute.

[01:42:52] Speaker 01:
I don't think they've really packaged their argument this way, but to the extent that they are saying, look, you yourself have come up with a statutory construction that does not differentiate between different levels of ethanol, fuels with different levels of ethanol concentration above 10%.

[01:43:11] Speaker 01:
It is therefore arbitrary to draw a line at 15.

[01:43:17] Speaker 01:
And as I said, I don't think that's really the way they make their argument,

[01:43:20] Speaker 01:
What is your answer to that?

[01:43:22] Speaker 01:
Why is it not arbitrary given your statutory interpretation to stop where you did?

[01:43:32] Speaker 08:
It's not arbitrary because we'd have to consider each fuel on its own basis.

[01:43:39] Speaker 08:
If they came in with an application of E20, EPA would look at that based on the same factors that are applied under either F1 or F4, depending on

[01:43:49] Speaker 08:
which path was taken.

[01:43:50] Speaker 08:
If a waiver application came in, EPA would look at that.

[01:43:54] Speaker 08:
So EPA can't prejudge without looking at the technical analysis of compatibility of emissions control equipment and those other factors as to how E20 would come out.

[01:44:07] Speaker 08:
You know, we believe, for instance, that E20 continues down that scale of evaporative emissions.

[01:44:14] Speaker 08:
It has less volatility.

[01:44:15] Speaker 08:
That's one thing in its favor.

[01:44:17] Speaker 08:
There are other things that may not be in its favor.

[01:44:19] Speaker 08:
EPA has to look at all those factors.

[01:44:26] Speaker 08:
The petitioners, the UAEI tries to make an argument and started out with an argument about the wording of the statute.

[01:44:33] Speaker 08:
We take a very different view.

[01:44:34] Speaker 08:
The wording of the statute under their interpretation would read out a whole portion of the statute.

[01:44:41] Speaker 08:
And the statute says it's unlawful for any manufacturer, any fuel or fuel additive

[01:44:46] Speaker 08:
first introduced into commerce or to increase the concentration in use of any fuel or fuel additive.

[01:44:52] Speaker 08:
That's exactly what they're arguing here.

[01:44:53] Speaker 08:
Let's increase the concentration.

[01:44:58] Speaker 08:
And the statute says to do that, there has to be a substantially similar determination.

[01:45:03] Speaker 08:
And their argument is the opposite.

[01:45:05] Speaker 01:
But then the back, I mean, it's not beautifully written in F1A.

[01:45:10] Speaker 01:
The back end of it talks about, it's not substantially similar to any fuel or fuel additive utilized in the certification.

[01:45:24] Speaker 01:
There's no comparator for a concentration in use of.

[01:45:29] Speaker 01:
It's just like either the fuel is similar or the fuel additive is similar.

[01:45:34] Speaker 01:
And I guess your position is, well, this is a fuel and it's not the neat fuel that I think Mr. Barry was referring to.

[01:45:44] Speaker 01:
It's fuel, meaning in this case, a blend.

[01:45:48] Speaker 08:
The statute requires substantially

[01:45:51] Speaker 08:
The new fuel or fuel additive would be substantially similar to the fuel or fuel additive utilized in the certification of the Model 75 or later.

[01:46:01] Speaker 08:
The fuel that was used in the certification here is E10.

[01:46:06] Speaker 01:
That's the sort of- Well, and they would say the fuel additive that was utilized in the certification was ethanol.

[01:46:13] Speaker 08:
And that might apply if you were, let's say there was a B10, which is-

[01:46:20] Speaker 08:
benzene tend to different oxygen.

[01:46:22] Speaker 08:
And then you'd say, okay, it's the same.

[01:46:24] Speaker 08:
It's the same level.

[01:46:26] Speaker 08:
It's the same level of gasoline.

[01:46:28] Speaker 08:
But it's a different additive.

[01:46:30] Speaker 08:
Let's compare the additive to the additive.

[01:46:32] Speaker 08:
But that's not what was going on here.

[01:46:35] Speaker 08:
This was looking at a completely different fuel with different characteristics.

[01:46:42] Speaker 01:
So am I right that you're reading fuel as, I mean, you've just said it, you're reading fuel as the package, as a blend, not as referring to neat fuel and then a fuel additive separately.

[01:46:54] Speaker 08:
That's correct.

[01:46:55] Speaker 08:
And as EPA explained in the rulemaking, in this case, an additive can be an additive, in that B10 example or the other example I gave when it's just that.

[01:47:05] Speaker 08:
But in this case, it is a characteristic of the fuel.

[01:47:09] Speaker 08:
And under UAI's reasoning,

[01:47:12] Speaker 08:
If there's a fuel with a half a percent of ethanol, then automatically any fuel up to 99% ethanol would have to be deemed substantially similar.

[01:47:25] Speaker 08:
And we don't, I don't know how EPA could ever again approve a fuel blend that has an oxygenate in it under those circumstances, because it would have to do analysis of that blend, not with 1%, but with 50% or 99%.

[01:47:44] Speaker 08:
And this is consistent with EPA's regulations too.

[01:47:48] Speaker 08:
40 CFR 79.21H says that what must be demonstrated is that the fuel additive when used, the recommended range of concentration is substantially similar to any fuel additive included in a fuel utilizing the certification.

[01:48:06] Speaker 08:
So it specifically says you have to look at it at the recommended concentration.

[01:48:14] Speaker 06:
Can you just help me understand how the regulatory scheme applies to E85?

[01:48:26] Speaker 06:
So what provision of the Clean Air Act here allows for the sale of E85?

[01:48:40] Speaker 08:
It's the same provisions where EPA has determined that E85 can be used in flex fuel vehicles only that are specially built to take high amounts of ethanol.

[01:48:57] Speaker 08:
EPA defines characteristics based, it's somewhat similar to diesel engines or propane gas engines.

[01:49:06] Speaker 08:
They're judged on their own characteristics and ability to handle

[01:49:09] Speaker 08:
that particular fuel.

[01:49:11] Speaker 08:
And even UAI admits in its brief that we're making substantially similar determinations.

[01:49:16] Speaker 08:
You have to look at the type of vehicle and compare apples to apples in this case.

[01:49:23] Speaker 06:
But what statutory provision applies to E85?

[01:49:30] Speaker 06:
Or is it approval and introduction into common?

[01:49:34] Speaker 08:
I'm not sure that there's any special provision for E85.

[01:49:38] Speaker 08:
There are regulations, special regulations to it, but it would be under the same provision.

[01:49:49] Speaker 08:
Subsection B refers to all vehicles as opposed to subsection one, which just talks about light duty vehicles.

[01:50:02] Speaker 08:
So then within that classification,

[01:50:05] Speaker 08:
of vehicle and fuel.

[01:50:07] Speaker 08:
That's the process that EPA goes through.

[01:50:14] Speaker 06:
You mean F1B?

[01:50:16] Speaker 06:
Yes, yes.

[01:50:22] Speaker 06:
And so same question with respect to mid-level blends.

[01:50:29] Speaker 08:
Yes, the mid-level blends would have to go through again either

[01:50:34] Speaker 08:
substantially similar determination or a waiver to allow that fuel to be sold.

[01:50:42] Speaker 08:
And EPA would apply those statutory parameters to determine whether that's viable or not.

[01:50:48] Speaker 08:
And in fact, that's the subject of the pending petition that was referenced earlier as to E-16 to E-50 and what may or may not be permitted.

[01:51:05] Speaker 01:
But they haven't applied for a waiver or a substantial similarity determination.

[01:51:08] Speaker 01:
Or you take that petition to be that.

[01:51:11] Speaker 08:
As counsel said, it isn't the alternative.

[01:51:13] Speaker 08:
And the second part of it was a petition to allow the mid-level one.

[01:51:18] Speaker 01:
So that's like an application.

[01:51:19] Speaker 01:
That's the same thing.

[01:51:20] Speaker 01:
Application for a waiver or petition for a rulemaking on the waiver question.

[01:51:24] Speaker 08:
Yes.

[01:51:24] Speaker 08:
And that's the way EPA views that.

[01:51:27] Speaker 01:
Got it.

[01:51:29] Speaker 06:
So are you saying then that for E85, EPA

[01:51:35] Speaker 06:
has made a finding since that it is substantially similar to some fuel or fuel additive.

[01:51:51] Speaker 06:
And if so, when did they make that finding and substantially similar to what?

[01:51:57] Speaker 08:
They made a finding that E85 is a certified fuel is a certification fuel for

[01:52:05] Speaker 08:
vehicles for flex-fuel vehicles, and they made a regulatory determination that fuels such as mid-level blend fuels, E16 to E50, are permitted for use in those flex-fuel vehicles where E85 is the certification fuel.

[01:52:38] Speaker 04:
Anything for them?

[01:52:40] Speaker 08:
No, on those bases and particularly again on the standing and lack of final agency action, but obviously also on the substance.

[01:52:48] Speaker 08:
You believe that UAEI's claim should be rejected.

[01:52:52] Speaker 08:
Thank you.

[01:52:54] Speaker 05:
All right.

[01:52:57] Speaker 01:
All right.

[01:53:00] Speaker 01:
Mr. Berry?

[01:53:02] Speaker 01:
I think we have Ms.

[01:53:02] Speaker 01:
Dawson first.

[01:53:06] Speaker 00:
Yes, thank you.

[01:53:07] Speaker 00:
Ms.

[01:53:07] Speaker 00:
Dawson, Council Dawson.

[01:53:11] Speaker 00:
Thank you, Judge Rogers.

[01:53:12] Speaker 00:
Hello again, Elizabeth Dawson on behalf of American fuel and petrochemical manufacturers here as an intervener in support of EPA with respect to the issues raised by the urban air initiative group of petitioners.

[01:53:24] Speaker 00:
So first, I would just say that in the event this court is inclined to rule for EPA,

[01:53:30] Speaker 00:
on the standing or final agency action issues, we certainly would not oppose that.

[01:53:36] Speaker 00:
I would only add here that Urban Air's interpretation of the statute would amount to a shoot first, ask questions later approach to fuels regulation.

[01:53:45] Speaker 00:
Any additive currently present in any certification fuel would automatically be allowed in any concentration, which completely disregards the protective purpose of the statute.

[01:53:54] Speaker 00:
The entire reason Congress enacted this statute was because the other portions of the Clean Air Act

[01:54:00] Speaker 00:
such as Section 211C were not sufficient as a backstop to protect consumers and vehicles with the introduction of new fuels or additives.

[01:54:12] Speaker 00:
you know, urban air in their reply brief seems to argue that there are regulatory measures that would still allow for regulation in advance of a fuels being sold.

[01:54:25] Speaker 00:
But those regulations only apply to designated fuels.

[01:54:28] Speaker 00:
And how a fuel is designated is by going through the Clean Air Act by going through F1 or F4.

[01:54:35] Speaker 00:
So they haven't explained how those regulations would actually apply to a fuel with a new concentration of ethanol.

[01:54:41] Speaker 00:
Additionally, those regulations only apply to manufacturers.

[01:54:44] Speaker 00:
And so they have not explained how that would be protective in the case of blenders.

[01:54:49] Speaker 00:
Ultimately, while they talk about vehicles such as flex fuel vehicles, their real purpose here, and if you look at their interpretation of the statute, would be to allow ethanol in a higher concentration in regular light duty vehicles, not limited to flex fuel vehicles.

[01:55:05] Speaker 00:
Their interpretation couldn't be so limited

[01:55:08] Speaker 00:
under their interpretation of F1.

[01:55:10] Speaker 00:
And for those reasons, we would agree with EPA that the court should deny Urban Air's petition for review.

[01:55:17] Speaker 00:
All right.

[01:55:18] Speaker 04:
Thank you.

[01:55:19] Speaker 00:
Thank you.

[01:55:27] Speaker 04:
All right.

[01:55:28] Speaker 04:
So, counsel for Urban Air, Mr. Barry.

[01:55:39] Speaker 09:
Thank you, Your Honor.

[01:55:40] Speaker 09:
A couple of quick observations.

[01:55:44] Speaker 09:
One is that there already is currently an existing designation for gasoline and derivative of the additives that go into the gasoline.

[01:55:54] Speaker 09:
That triggers EPA's extensive regulatory regime under 211A and B that go directly to concentration, even of fuel additives like ethanol that exist in a certification fuel.

[01:56:08] Speaker 09:
There's under 211B1, there's tier one emissions characterization.

[01:56:14] Speaker 09:
There's tier two health effects testing on typically, I believe on rats.

[01:56:19] Speaker 09:
There's tier three additional residual pre-registration testing.

[01:56:24] Speaker 09:
testing protocols that EPA may impose at its discretion prior to granting registration.

[01:56:30] Speaker 09:
There is discretion to impose emission control system testing.

[01:56:34] Speaker 09:
There is the existing mis-fueling rule promulgated under 211C that restricts the introduction of higher level blends.

[01:56:43] Speaker 09:
And EPA also has maintained that the Clean Air Act's anti-tampering provision applies here.

[01:56:52] Speaker 09:
Those are at least five different tumblers in the lock before any alleged floodgates open.

[01:57:00] Speaker 09:
I did want to point out there was sort of an implied premise here that we talked a little bit in my opening presentation.

[01:57:06] Speaker 09:
that some kind of affirmative, in fact, council for EPA stated that some sort of affirmative substantial similarity determination was needed.

[01:57:16] Speaker 09:
If that's true, then that seems to resolve any questions about finality.

[01:57:25] Speaker 09:
The EPA has continued to keep the gates shut.

[01:57:28] Speaker 09:
As it happens, as I'd said, F1 is in fact self-executing and that affirmative determination is

[01:57:35] Speaker 09:
is not needed.

[01:57:37] Speaker 09:
Additionally, last thing I would say on finality is that adopting the approach suggested here would have odd consequences for judicial review because it would seem that someone facing an enforcement defense action in regard to selling mid-level blend would be able to litigate de novo this question of substantial similarity despite the existence of an EPA rule

[01:58:05] Speaker 09:
Briefly, I wanted to mention the issue of, of noticing comment and this to rebut this notion that we're in this.

[01:58:16] Speaker 01:
Just before you let me just go back to what you just asked, if, if you're right that this doesn't.

[01:58:26] Speaker 01:
So assuming your position that ethanol is an additive, and that's what we look at, whether it's substantially similar to an additive already approved, I take it, though, that your position is that we don't look at concentration.

[01:58:43] Speaker 01:
But how can that be given that the statute makes the change in concentration a trigger for the analysis?

[01:58:54] Speaker 09:
So, Your Honor, we believe that the only way to give that increase the concentration and use of verbiage meaning in F1 is for it to apply to those non-subsim additives that may be lawfully in use under F4.

[01:59:11] Speaker 09:
that that's a restriction on the ability of a manufacturer to increase, you know, to take the additive MMT, which is, I believe, currently waived in at 1 over 32 concentration.

[01:59:25] Speaker 09:
If a manufacturer sought to go up to 1 16th or 1 8th, that would be prohibited by F1, because MMT is only in use through F4, not through its presence in a cert fuel, because it's not in any cert fuel.

[01:59:40] Speaker 01:
But F4 also has this concentration provision.

[01:59:46] Speaker 09:
That's right.

[01:59:47] Speaker 09:
And we believe that F4 does speak directly to regulating concentration in that regard.

[01:59:56] Speaker 09:
Once an additive is in a cert fuel by contrast,

[02:00:05] Speaker 01:
Then it can be used in any quantity, whereas when it's in a waved-in fuel, it can only be used in the concentration specified in the waiver.

[02:00:14] Speaker 09:
Is that the decision?

[02:00:17] Speaker 09:
I would put it slightly more narrowly, Your Honor, which is that F1 no longer restricts concentration.

[02:00:23] Speaker 09:
211 A, B, C, and E, I suppose, continue to govern.

[02:00:31] Speaker 09:
And the EPA routinely

[02:00:33] Speaker 09:
employs those authorities.

[02:00:38] Speaker 01:
So F1, to the extent that it also refers to an increase in the concentration, you're taking that to be a cross-reference to a fuel of a particular concentration that's been given a waiver and only that?

[02:00:55] Speaker 09:
To an additive in a specified concentration, that's right.

[02:00:58] Speaker 01:
That has been permitted into

[02:01:02] Speaker 01:
commerce through a waiver and only through a waiver.

[02:01:05] Speaker 09:
That's right through the same yeah under the same this is all part of the same subsim law 211f that's the number four and it just in our view given

[02:01:20] Speaker 09:
given the structure of F1 and F as a whole, there's no other way to make increase the concentration use of do work that doesn't create surplus issues.

[02:01:35] Speaker 09:
And I would as an aside that

[02:01:39] Speaker 09:
Cannon against surplusage, not an iron cannon, as it were.

[02:01:42] Speaker 09:
And if 211F were the only statutory authority for regulating concentration, that could well be a good reason for ignoring the surplusage concern we raise.

[02:01:52] Speaker 09:
But we think in that larger context, there's lots of other regulatory authority here.

[02:01:58] Speaker 06:
But isn't there really no surplusage issue if you just read the

[02:02:07] Speaker 06:
the part that precedes the comma or to increase the concentration.

[02:02:13] Speaker 06:
It says to first introduce into commerce.

[02:02:17] Speaker 06:
So to first introduce in the commerce any fuel.

[02:02:23] Speaker 06:
And the fuel means the blended fuel.

[02:02:26] Speaker 06:
Then if you have a new blend, then you can't introduce that into commerce.

[02:02:36] Speaker 06:
unless it's substantially similar to a blend that's used in certification, right?

[02:02:46] Speaker 06:
So there's no surplusage problem there.

[02:02:51] Speaker 06:
We don't have to, or to increase the concentration and use of, doesn't have to speak to fuel.

[02:02:58] Speaker 06:
It could be speaking to fuel additive.

[02:03:04] Speaker 09:
Your honor, if I want to make sure I understand your question properly, but if fuel here means finished fuel, any time I might seek to, and I'm a manufacturer who seeks to introduce the concentration use of a fuel additive,

[02:03:24] Speaker 09:
That can always be re-characterized as seeking to first introduce in the commerce a new finished fuel.

[02:03:32] Speaker 09:
There's no reason for that second verb to appear.

[02:03:37] Speaker 09:
That's the surplusage issue that we're concerned about.

[02:03:43] Speaker 09:
If I could speak just very briefly on the notice and comment issue, the EPA's position appears to be that we're entirely out of scope, that this was a railroad rulemaking, we're shippers or whatever.

[02:04:00] Speaker 09:
The difficulty here is EPA expressly invites comments on what other oxygenates may go in here.

[02:04:11] Speaker 09:
And this is at JA64 is the call for comments on this that suggest as of the time of the proposal rulemaking, EPA understood that talking about at least adjacent blends or slightly different concentrations of additives would at least be responsible alternatives that it would be appropriate and perhaps necessary to consider.

[02:04:38] Speaker 09:
So we responded in our comment

[02:04:40] Speaker 09:
to exactly this prompt.

[02:04:43] Speaker 09:
And then EPA turns around in the final rule and says, that was all out of scope.

[02:04:48] Speaker 09:
And we don't believe that there is a way to really to reconcile, essentially to give meaning to the duty to consider alternatives and agency's line drawing decision has to consider what lies on the other side of the line it draws.

[02:05:04] Speaker 09:
EPA arbitrarily refused to do just that.

[02:05:06] Speaker 01:
I'm still having trouble with this point.

[02:05:09] Speaker 01:
If an agency that's in charge of schooling says, okay, we're gonna consider pre-K, we want comments on pre-K, should we also have sub pre-K childcare and or affect kindergarten?

[02:05:26] Speaker 01:
And they get comments on that.

[02:05:28] Speaker 01:
And then they say, look, this is too big of a package.

[02:05:31] Speaker 01:
We're gonna go with our proposed rule on pre-K.

[02:05:35] Speaker 01:
Does that mean they've made a final rule with respect to kindergarten or early childhood daycare?

[02:05:45] Speaker 09:
EPA's position appears to be that, as counsel said today, there needs to be an affirmative subsim determination before these products can move past that first tumbler in the lock.

[02:05:57] Speaker 09:
Right.

[02:05:58] Speaker 01:
They haven't prejudged that for mid-level.

[02:06:00] Speaker 01:
They just have not passed on that.

[02:06:03] Speaker 01:
They've given you a great toe in the door because they've said they've interpreted the statutory provision to apply to 10% or more.

[02:06:14] Speaker 01:
But what have they said against?

[02:06:16] Speaker 01:
That's, I think, where I'm stuck.

[02:06:21] Speaker 09:
They have, I guess, two points, Your Honor.

[02:06:27] Speaker 09:
One is that as a matter of law, they've misstated F1 in a way that prejudices us going forward.

[02:06:38] Speaker 09:
And then as in sort of an admin law matter, they've arbitrarily refused to consider comments of the kind that they invited.

[02:06:46] Speaker 09:
So they asked specifically explicitly on isobutanol, comments were submitted on isobutanol.

[02:06:51] Speaker 09:
They said, oh, that's beyond the scope.

[02:06:53] Speaker 09:
even though in the proposal, they appear to recognize that this is within the scope.

[02:07:02] Speaker 09:
So the reasoning here underlies the availability of the RVP waiver.

[02:07:09] Speaker 09:
So that's a legislative rule that our petitioners and others cannot claim the benefit of.

[02:07:16] Speaker 09:
That's a textbook legal consequence or writer obligation under Bennett Prompt 2.

[02:07:21] Speaker 01:
That's helpful.

[02:07:22] Speaker 04:
Thank you.

[02:07:22] Speaker 04:
All right.

[02:07:23] Speaker 04:
Anything further?

[02:07:25] Speaker 09:
No, Your Honor.

[02:07:26] Speaker 04:
Thank you, Council.

[02:07:27] Speaker 04:
We'll take that under consideration.

[02:07:34] Speaker 04:
And we'll move to part three.

[02:07:42] Speaker 04:
Small Retailers Coalition.

[02:07:47] Speaker 04:
Mrs. Murray.

[02:07:49] Speaker 03:
Good morning, Your Honors.

[02:07:50] Speaker 03:
May it please the court?

[02:07:52] Speaker 03:
My name is Suzanne Murray and I represent the petitioners, the Small Retailers Coalition.

[02:07:56] Speaker 03:
And we are here as directly regulated small entities under the RFS in this rule, and we are asking the court's consideration on a very narrow issue.

[02:08:04] Speaker 03:
We would ask that you review the sufficiency of EPA certification under the Regulatory Flexibility Act before promulgating this rule.

[02:08:13] Speaker 03:
Our challenge is based on the fact that

[02:08:15] Speaker 03:
the certification required under the act as a prerequisite to promulgating a rule did not analyze the significant economic impact on small service station and convenience stores that sell gasoline directly to consumers.

[02:08:30] Speaker 03:
Congress recognized in the RFA that there is a distinct economic impact that small entities may experience as opposed to larger entities and or promulgates rules.

[02:08:41] Speaker 03:
And so as a result,

[02:08:43] Speaker 03:
It directed that agencies must perform either a regulatory flexibility analysis or a adequate certification under Section 605 of the Act, making a statement that the rule will not have a significant impact on a substantial number of small entities.

[02:09:00] Speaker 03:
As part of this process, EPA has also directed specifically to run any certification that it chooses to proffer, as it did in this rule,

[02:09:09] Speaker 03:
to the Office of Advocacy in Small Business Administration for review.

[02:09:15] Speaker 03:
The Office of Advocacy commented on this particular certification, this rule, and found that the certification did not meet EPA's obligations under the RFA.

[02:09:26] Speaker 03:
They said it lacked factual basis and it did not meet the criteria of Section 605.

[02:09:32] Speaker 03:
Moreover, we, small retailers commented on the adequacy of this rule and asked specifically that EPA consider the economic impacts of both the market reform, the rent market reform provisions and the substantive provisions of requiring the sale or of allowing the sale of E-15 throughout the year.

[02:09:53] Speaker 03:
In response, EPA ignored both comments, and just in the final rule, issued a boilerplate section in which it cited to a footnote for a deficient screening analysis that did not consider any impacts on small retailers, only on small refiners, and then only on very narrow parts of the rule proposed.

[02:10:16] Speaker 03:
It did not.

[02:10:18] Speaker 06:
Can you please address, Council, why

[02:10:22] Speaker 06:
you have standing given the holding of Grocery Manufacturers Association, VEPA?

[02:10:30] Speaker 03:
Yes, Your Honor.

[02:10:31] Speaker 03:
We have standing because members of our coalition are directly regulated under the RFS and under these provisions.

[02:10:38] Speaker 03:
We, in our reply brief, also supply declarations of particular individuals who outlined the reasons that they're impacted and they have standing.

[02:10:47] Speaker 03:
We also, as a coalition, have standing to challenge this rule.

[02:10:52] Speaker 03:
were regulated under many of the compliance provisions of the RFS, including labeling provisions, provisions as blenders and distributors.

[02:11:01] Speaker 01:
How would you say directly regulated?

[02:11:03] Speaker 01:
It seems indirect and it's been challenged.

[02:11:06] Speaker 01:
Your standing has been challenged as that your injury is speculative.

[02:11:11] Speaker 01:
So nobody's required to use the E15 blends.

[02:11:17] Speaker 01:
So if one didn't have the machinery and didn't want to use it,

[02:11:21] Speaker 01:
one wouldn't have to.

[02:11:22] Speaker 03:
Yes, with all due respect, there's sort of two separate questions.

[02:11:29] Speaker 03:
We are regulated under this rule, but the aspect of the role that we're challenging is EPA's failure to look at the regulatory flexibility analysis, which again is a prerequisite to promulgating the rule.

[02:11:40] Speaker 03:
Whether what ultimately happens with the rules implementation isn't our issue.

[02:11:44] Speaker 03:
Our issue is that EPA has an obligation to do an analysis of the economic impacts of this rule

[02:11:51] Speaker 03:
on gasoline retailers are on small entities.

[02:11:54] Speaker 03:
We do represent about, depending on the day, 50 to 70% of the gasoline retail, the small retailers represent about 50 to 70% of the retail outlets for gasoline in this country.

[02:12:10] Speaker 03:
And to say that the blends, the concentration of renewable fuels doesn't have an impact, an economic impact on the industry

[02:12:21] Speaker 03:
is really not credible.

[02:12:23] Speaker 03:
EPA even in this rule talks about the challenges of getting this higher blends of E-15 into commerce and talks very directly about some of the infrastructure challenges that we've raised in our comments and that EPA responded to.

[02:12:39] Speaker 03:
Some of those challenges are not directly tied to the RFS, but to things like underground storage tanks and delivery systems.

[02:12:46] Speaker 01:
But I thought that all cuts in your favor in the sense that they're saying a lot of retailers aren't going to be ready for this.

[02:12:52] Speaker 01:
So it's going to come in very, very slowly.

[02:12:56] Speaker 01:
And nobody's required to jump up to E15, are they?

[02:13:04] Speaker 03:
So again, Your Honor, it's not necessarily what people are required to do.

[02:13:09] Speaker 03:
What the RFA does is it's sort of analogous to NEPA.

[02:13:14] Speaker 03:
It's a hearts and minds statute that makes the agency really step back and look at and explain the economic impacts of its rule on small entities.

[02:13:25] Speaker 03:
Here, there could be positive and negative impacts.

[02:13:27] Speaker 01:
We're not preaching.

[02:13:27] Speaker 01:
We have to identify the impact and whether it's sufficiently direct because I thought that we had held, for example, in cement kiln that we've rejected the contention that small businesses who are indirectly affected have a claim under the Regulatory Responsibility Act.

[02:13:53] Speaker 03:
So again, I don't think that you can make the assumption that we're indirectly affected.

[02:13:57] Speaker 03:
Any retail station that has to contemplate selling certain blends of fuel, there are real economic decisions associated with that.

[02:14:06] Speaker 03:
And also in your share in the marketplace, there are very real economic decisions about the value of the rent that impact small retailers and people that are in this industry.

[02:14:18] Speaker 03:
There are very real economic decisions about if you wanted to

[02:14:21] Speaker 03:
make the choice to participate in a market which allows the sale to be 15 year long, that what sort of infrastructure investments you would make.

[02:14:30] Speaker 03:
Again, there are also very real decisions that folks may make because there are incentive programs that may incent people to, you know, build out an infrastructure that could support the delivery of higher blends all year long.

[02:14:42] Speaker 03:
Again, these are issues that EPA is charged with explaining.

[02:14:47] Speaker 03:
to small businesses, including small retailers, which most definitely are impacted by the economics of these decisions.

[02:14:57] Speaker 01:
Just to be perhaps provocative on this point, if something happens through a regulation that gives small retailers more choices, they may have difficult business decisions to make, but it's giving them more choices and not requiring that they change

[02:15:17] Speaker 01:
anything, in what regard is that harming them?

[02:15:23] Speaker 03:
I think the answer to those we don't know because you get into the analysis.

[02:15:27] Speaker 03:
So all we want is the information.

[02:15:29] Speaker 01:
But that's putting the car before the horse.

[02:15:31] Speaker 01:
We're trying to determine whether your clients have standing.

[02:15:37] Speaker 01:
And assuming that

[02:15:41] Speaker 01:
If there is an impact that a regulatory flexibility act analysis is required.

[02:15:46] Speaker 01:
That's why I started and I know you say you're not challenging the merits, but I want to understand your theory of how the rule on its merits is regulating your clients and it wasn't entirely clear to me and it's it's remains a little unclear to me.

[02:16:02] Speaker 01:
what your argument is that's just regulating them as distinct from changing the landscape in which they operate to give them perhaps some tricky business choices.

[02:16:13] Speaker 03:
So I think the way that the rule is regulating them is that it imposes compliance obligations that impact some of our members.

[02:16:22] Speaker 03:
So there will be

[02:16:24] Speaker 03:
And this is also echoed and recognized in the comments that the, again, the advocacy office made when it said, you know, that this, the rule will impact non-albegated parties, and in fact recommended exempting them from some of the rent reform market requirements.

[02:16:44] Speaker 03:
There is a real recognition that there are the market reality that first of all, these many of these gas stations are directly regulated.

[02:16:53] Speaker 03:
They have compliance obligations under these rules.

[02:16:55] Speaker 03:
Moreover, the way that the reforms are structured will have direct economic implications for them and not considering those.

[02:17:06] Speaker 03:
was one of the reasons that the, again, the advocacy, the advocate filed a comment with the EPA that said, one of the flaws and the reason that this analysis is insufficient is it did not consider the economic impacts to small non-obligated entities.

[02:17:21] Speaker 03:
EPA must remedy its compliance with the RFA for this rule.

[02:17:25] Speaker 03:
So again, Your Honor, I would just respectfully say sometimes there's a little bit of a muddle between someone that's obligated and regulated.

[02:17:32] Speaker 03:
We would not argue that we are obligated in the same way that refiners are in this rule, but we certainly are regulated under the RFS.

[02:17:40] Speaker 03:
And I don't think that EPA would proffer that gasoline retail stations are not regulated under the RFS, nor do they have compliance requirements when they want to sell E-15.

[02:17:51] Speaker 03:
All we're asking is that because of that, that EPA meet its additional obligation under the RFA to provide us the economic analysis so that we can understand the rule and make the choices that Congress intended us to be able to make.

[02:18:09] Speaker 04:
All right, why don't we hear counsel for EPA?

[02:18:15] Speaker 04:
Mr. Rosen.

[02:18:17] Speaker 08:
Thank you, Your Honor.

[02:18:19] Speaker 08:
A petition organization in order to have standing must submit affidavits of an imminent injury.

[02:18:25] Speaker 08:
They have to describe the injury to actual named members with actual evidence of injury, not hearsay or conjecture or speculation about what third parties are going to do in the future.

[02:18:36] Speaker 08:
And it's all got to be caused by something in the challenge rule, by an obligation or requirement in the challenge rule.

[02:18:44] Speaker 08:
Petitioners here submitted none of this, checked none of these boxes.

[02:18:49] Speaker 08:
And their reply brief did not cure any of these defects.

[02:18:53] Speaker 08:
The reply brief does submit affidavits.

[02:18:57] Speaker 08:
But as counsel, as stated in their brief, they're only allowed to do that now in their reply brief if they had a reasonable view that standing was self-evident.

[02:19:07] Speaker 08:
That view is not reasonable.

[02:19:10] Speaker 08:
And that was already decided in the grocery manufacturer's case, where the same type of argument came up and where the court denied standing

[02:19:18] Speaker 08:
to challenge the E-15 waiver by downstream parties and specifically found that standing is not self-evident with a regulation issue does not on its face directly impose regulatory restrictions, costs, or other burdens on the party asserting that standard.

[02:19:38] Speaker 08:
And the court went on to talk about retailers in particular and found no direct injuries.

[02:19:44] Speaker 08:
In any case, the three affidavits submitted by petitioner on the reply brief were form affidavits with blanks filled in, but that's okay, they're allowed to do that.

[02:19:54] Speaker 08:
But it all contained pure speculation about what might happen.

[02:19:59] Speaker 08:
With no evidence, no facts, none refer to a single provision for the E-15 rule.

[02:20:05] Speaker 08:
None even refer to the E-15 rule at all.

[02:20:08] Speaker 08:
You cannot possibly satisfy the causal connection element of Lujan's standing

[02:20:14] Speaker 08:
without even referring to an element of the rule that you're challenging and you claim provides standing.

[02:20:21] Speaker 08:
Even their unsupported argument, putting aside the fact that they have no supporting affidavits, fails.

[02:20:27] Speaker 08:
There is no injury from a rule if you're not required to do anything, if you're not punished or fined for having done something.

[02:20:34] Speaker 08:
The E-15 rule requires small retailers to do nothing.

[02:20:38] Speaker 08:
It punishes small retailers for nothing.

[02:20:41] Speaker 08:
Again, they fail to cite even in their brief

[02:20:44] Speaker 08:
putting aside the affidavits, a single regulatory provision in E-15 rule that even allegedly injures their members.

[02:20:52] Speaker 08:
They talk about reactions downstream and refer to the renewable fuel standards and other regulations that they allege cause that, but nothing connected to this rule, which is a fundamental requirement of standing.

[02:21:09] Speaker 08:
Ultimately, the lack of standing here has already been decided

[02:21:13] Speaker 08:
in the grocery manufacturers case.

[02:21:17] Speaker 08:
This court said in that case, which had to do with the E-15 waiver, which for these purposes is equivalent to what we're talking about here, the use of E-15.

[02:21:26] Speaker 08:
Quote, neither the RFS nor the partial 15 waivers require downstream entities to have anything to do with E-15.

[02:21:35] Speaker 08:
And there's no difference here.

[02:21:39] Speaker 08:
As to the substance, basically for the same reasons,

[02:21:44] Speaker 08:
there is no violation of the Regulatory Flexibility Act.

[02:21:47] Speaker 08:
The courts have made it very clear that the parties have to actually be regulated for a regulatory flexibility analysis to be required.

[02:21:57] Speaker 08:
And again, these petitioners incur no actual obligations or requirements as a result of the challenge rule.

[02:22:07] Speaker 08:
Downstream parties here may have effects, but those are effects from another statute

[02:22:13] Speaker 08:
another regulation or just pure economics.

[02:22:17] Speaker 08:
The E-15 rule opened up opportunities for these sets of petitioners.

[02:22:24] Speaker 08:
They may choose to follow those opportunities.

[02:22:26] Speaker 08:
They may choose not to.

[02:22:27] Speaker 08:
There may be effects by what other parties do or don't do, but the Regulatory Flexibility Act, as well as the standing, all require those actions to be set forth in the regulations and none of them are.

[02:22:42] Speaker 08:
And as a result,

[02:22:43] Speaker 08:
there's no substantive claim as well as standing under the regulatory flexibility.

[02:22:49] Speaker 04:
All right.

[02:22:50] Speaker 04:
All right.

[02:22:55] Speaker 04:
Well, Council Mrs. Murray, would you like a minute or two on Roboto?

[02:23:01] Speaker 03:
Yes, briefly, Your Honor, thank you.

[02:23:03] Speaker 03:
So again, on this, this Meg Kelly case directly says that small entities regulated by a rule have standing under the RFA.

[02:23:11] Speaker 03:
We have standing to challenge the rule.

[02:23:13] Speaker 03:
In addition, I do find it a little bit perplexing that EPA sort of proffers that we should not have been, that we had no reason to believe that we were regulated by the rules, since in every iteration of RFS rules up until 2018, EPA itself defined gasoline service stations as potentially regulated entities.

[02:23:34] Speaker 03:
In 2018, arbitrarily, for no reason that has ever been proffered in the briefs or anywhere else, EPA changed the definition of all regulated parties to potentially affected entities.

[02:23:47] Speaker 03:
This change just cannot sort of wave a magic wand over the fact that we are directly regulated under the Act.

[02:23:53] Speaker 03:
We do have standing and all we're asking is for EPA to meet its baseline

[02:23:56] Speaker 03:
obligation to do the RFA analysis or to do a certification that is based on facts, not conjecture.

[02:24:03] Speaker 03:
Thank you.

[02:24:04] Speaker 04:
Thank you.

[02:24:07] Speaker 04:
All right.

[02:24:09] Speaker 04:
Well, counsel, thank you very much.

[02:24:12] Speaker 04:
The court will take the case under advisement.