American Fuel & Petrochemical Manufacturers v. EPA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 13, 2021 Decided July 2, 2021

No. 19-1124

AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

GROWTH ENERGY, ET AL.,

INTERVENORS

Consolidated with 19-1159, 19-1160, 19-1162

On Petitions for Review of an Order

of the Environmental Protection Agency

Kevin F. King and Elizabeth B. Dawson argued the causes

for the Industry Petitioners. With them on the briefs were

Thomas A. Lorenzen, Robert J. Meyers, Richard S. Moskowitz,

Robert A. Long, Jr., Thomas R. Brugato, Carlton Forbes, and

John Wagner.

2

Jonathan Berry argued the cause for petitioners Urban Air

Initiative, et al. With him on the briefs were C. Boyden Gray

and James R. Conde.

Suzanne Beaudette Murray argued the cause for Small

Retailers Coalition Petitioners. With her on the briefs was

Michael J. Scanlon.

Perry M. Rosen, Senior Attorney, U.S. Department of

Justice, argued the causes for the respondent. With him on the

brief were Jeffrey Bossert Clark, Assistant Attorney General,

and Jonathan D. Brightbill, Principal Deputy Assistant

Attorney General.

Ethan G. Shenkman argued the cause for intervenors

Growth Energy, et al. in support of respondent. With him on

the joint brief were Matthew W. Morrison, Shelby L. Dyl,

Jonathan S. Martel, William C. Perdue, Seth P. Waxman, Brian

M. Boynton, and David M. Lehn.

Elizabeth B. Dawson argued the causes for intervenor

American Fuel & Petrochemical Manufacturers in support of

respondent. With her on the brief were Thomas A. Lorenzen,

Robert J. Meyers, and Richard S. Moskowitz.

Before: ROGERS, PILLARD and WILKINS, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: In October 2018, the President

directed the Environmental Protection Agency “to initiate a

rulemaking to consider expanding Reid Vapor Pressure

waivers for fuel blends containing gasoline and up to 15

percent ethanol,” also known as E15, and to “increase

transparency in the Renewable Identification Number (RIN)

3

market,” a feature of the Renewable Fuel Standard (“RFS”)

program. White House, Fact Sheet: President Donald J. Trump

Is Expanding Waivers for E15 and Increasing Transparency in

the RIN Market (Oct. 11, 2018) (emphasis omitted). EPA

issued a final rule on June 10, 2019, after notice and comment,

revising its regulations on fuel volatility and the RIN market.

Modifications to Fuel Regulations To Provide Flexibility for

E15; Modifications to RFS RIN Market Regulations, 84 Fed.

Reg. 26,980 (June 10, 2019) (the “E15 Rule”). In Section II,

EPA announced a new interpretation of when the limits on fuel

volatility under the Clean Air Act could be waived pursuant to

42 U.S.C. § 7545(h)(4), and relatedly reinterpreted the term

“substantially similar” in Subsection 7545(f)(1)(A). In these

consolidated petitions for review, the petroleum and ethanol

industries as well as the Small Retailers Coalition challenge

EPA’s decision to grant a fuel volatility waiver to E15. For the

following reasons, we hold that Section II exceeds EPA’s

authority under Section 7545 and therefore vacate that portion

of the E15 Rule.

I.

The Clean Air Act establishes, among other things, “a

comprehensive scheme for regulating motor vehicle emission

and fuel standards for the prevention and control of air

pollution.” Ethyl Corp. v. EPA, 51 F.3d 1053, 1054 (D.C. Cir.

1995). Section 211 of the Act, 42 U.S.C. § 7545, addresses the

regulation of fuels.

To safeguard the efficacy of emission control devices in

motor vehicles, Subsection 7545(f) restricts the introduction

into commerce of new fuels and fuel additives. See Am. Methyl

Corp. v. EPA, 749 F.2d 826, 829 (D.C. Cir. 1984). It is

4

unlawful for any manufacturer of any fuel or fuel

additive to first introduce into commerce, or to

increase the concentration in use of, any fuel or fuel

additive for general use in light duty motor vehicles

manufactured after model year 1974 which is not

substantially similar to any fuel or fuel additive

utilized in the certification of any model year 1975, or

subsequent model year, vehicle or engine under

section 7525 of this title.

42 U.S.C. § 7545(f)(1)(A) (emphasis added). This limitation

is subject to waiver, upon application and after notice and

opportunity for comment, if “the applicant has established that

such fuel or fuel additive . . . will not cause or contribute to a

failure of any emission control device or system.” Id.

§ 7545(f)(4).

Subsection 7545(h) limits fuel volatility. Measured in

terms of pounds per square inch (“psi”) of Reid Vapor Pressure

(“RVP”), volatility reflects how readily gasoline evaporates.

Although fuel must be sufficiently combustible to ignite under

cold start conditions, gasoline vapors contain volatile organic

compounds that are a key ingredient of ground-level ozone.

Nat’l Tank Truck Carriers, Inc. v. EPA, 907 F.2d 177, 179

(D.C. Cir. 1990). Thus, “the greater the RVP, the greater the

volatility of the gasoline and the larger the amount of ozone

formed.” Id. Because ozone is created when volatile organic

compounds react with nitrogen oxides in the presence of

sunlight, see S. Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d

882, 887 (D.C. Cir. 2006), controlling fuel volatility is

particularly important during the sunnier months of the year

when ozone levels are highest, see Nat’l Tank Truck Carriers,

907 F.2d at 179.

5

Subsection 7545(h)(1) directed EPA, not later than six

months after enactment of the 1990 Clean Air Act

Amendments, to “promulgate regulations making it unlawful

for any person during the high ozone season . . . to sell, offer

for sale, dispense, supply, offer for supply, transport, or

introduce into commerce gasoline with a [RVP] in excess of

9.0 [psi].” 42 U.S.C. § 7545(h)(1). The regulations were to

“also establish more stringent [RVP] standards in a

nonattainment area.” Id. EPA regulations limit the RVP of

gasoline to 9.0 psi in attainment areas and 7.8 psi in

nonattainment areas “during the summer season,” which

generally runs from May 1 to September 15. 40 C.F.R.

§ 1090.215(a) (2020); see id. § 1090.80 (defining “summer

season”).

Congress was also aware of various benefits of ethanol as

compared to gasoline, however. See S. Rep. No. 101-228, at

110 (1989). Because, up to a point, adding ethanol to gasoline

increases the fuel’s RVP, requiring E10 (fuel with 10%

ethanol) to satisfy the 9-psi limit “would likely result in the

termination of the availability of ethanol in the marketplace.”

Id. Subsection 7545(h)(4) provides for a waiver:

For fuel blends containing gasoline and 10 percent

denatured anhydrous ethanol, the [RVP] limitation

under this subsection shall be one pound per square

inch (psi) greater than the applicable [RVP] limitations

established under paragraph (1) . . . .

42 U.S.C. § 7545(h)(4). This 1-psi waiver allows qualifying

fuels to be sold during the summer months at 10.0 psi in

attainment areas and 8.8 psi in nonattainment areas. See 40

C.F.R. § 1090.215(b).

6

Both kinds of waivers — pursuant to Subsections

7545(f)(4) and (h)(4) — underlie the instant dispute. In 1979,

E10 was introduced into commerce through a Subsection

7545(f)(4) waiver. See Fuels and Fuel Additives: Gasohol;

Marketability, 44 Fed. Reg. 20,777 (Apr. 6, 1979). EPA

extended the 1979 waiver in 1982 to fuel containing 0–to–10%

ethanol upon finding that the “emissions effect of blends

containing up to 10 percent anhydrous ethanol in unleaded

gasoline would be the same or less than that for the full 10

percent ethanol blend.” Fuels; Blends of Ethanol in Unleaded

Gasoline, 47 Fed. Reg. 14,596, 14,596 (Apr. 5, 1982). Over

the next thirty years, use of E10 increased. By 2013, E10

accounted for nearly all gasoline sold in the United States. E15

Rule, 84 Fed. Reg. at 26,986.

In 2010 and 2011, EPA determined that E15 would not

impair certain motor vehicles’ emission controls under

Subsection 7545(f)(4) and by waivers approved the use of E15

in light-duty motor vehicles made after 2000. See Partial

Grant of Clean Air Act Waiver Application Submitted by

Growth Energy To Increase the Allowable Ethanol Content of

Gasoline to 15 Percent, 76 Fed. Reg. 4,662 (Jan. 26, 2011);

Partial Grant and Partial Denial of Clean Air Act Waiver

Application Submitted by Growth Energy To Increase the

Allowable Ethanol Content of Gasoline to 15 Percent, 75 Fed.

Reg. 68,094 (Nov. 4, 2010); see also Grocery Mfrs. Ass’n v.

EPA, 693 F.3d 169, 173 (D.C. Cir. 2012). These waivers did

not include the 1-psi waiver that enabled the summer sale of

E10, but instead required E15 to meet the generally applicable

9-psi limit. EPA rejected requests to apply the 1-psi waiver to

E15, interpreting Subsection 7545(h)(4) as “limit[ed] . . . to fuel

blends containing gasoline and 9–10 vol% ethanol.”

Regulation To Mitigate the Misfueling of Vehicles and Engines

With Gasoline Containing Greater Than Ten Volume Percent

Ethanol and Modifications to the Reformulated and

7

Conventional Gasoline Programs, 76 Fed. Reg. 44,406, 44,433

(July 25, 2011) (“Misfueling Rule”). Because it is cost-

prohibitive to produce ethanol blends with volatility not

exceeding 9.0 psi, EPA’s waiver condition prevented the sale

of E15 during the summer. See E15 Rule, 84 Fed. Reg. at

26,990, 26,993.

In October 2018, the President directed EPA to initiate a

rulemaking to consider modifying the volatility limits for E15

so it could “be sold year round rather than just eight months of

the year.” White House, Fact Sheet: President Donald J.

Trump Is Expanding Waivers for E15 and Increasing

Transparency in the RIN Market (Oct. 11, 2018). Section II of

the E15 Rule, which EPA issued in June 2019, extended the 1-

psi waiver to fuel blends with an ethanol concentration of “at

least 9% and no more than 15% (by volume) of the gasoline.”

E15 Rule, 84 Fed. Reg. at 27,021 (codified at 40 C.F.R.

§ 80.27(d)(2), now codified in § 1090.215(b)). This change

rested on two subsidiary determinations. First, EPA “adopt[ed]

a new interpretation” of Subsection 7545(h)(4), id. at 26,991,

as simply “establishing a lower limit, or floor, on the minimum

ethanol content for a 1-psi waiver,” id. at 26,992. Under its

revised interpretation, the “lack[] [of] modifiers for the term

‘containing’” in Subsection 7545(h)(4), “in contrast to the

other statutory provisions” in Section 7545, renders the term

“ambiguous and provides room for . . . interpretive and policy

choices.” Id. EPA concluded it was “permissible . . . to

interpret ‘containing’ to mean ‘containing at least’” such that

“all fuels which contain at least 10 percent ethanol may receive

the 1-psi waiver, including blends that contain more than 10

percent ethanol.” Id. This new interpretation, EPA noted,

advanced the statutory purpose of promoting the use of ethanol

fuel. Id. at 26,993. Second, EPA determined that E15 is

“substantially similar” to E10, a fuel used to certify vehicle

emissions control systems, when used in light-duty motor

8

vehicles made after 2000. Because E15 thereby satisfied the

requirements of Subsection 7545(f)(1)(A), as well as

Subsection 7545(h)(4) as EPA reinterpreted it, E15 could be

sold at 10.0 psi notwithstanding the volatility conditions in the

2010–2011 waivers. Id.

Three sets of petitioners challenge Section II of the E15

Rule. Petroleum Petitioners contend that Subsection

7545(h)(4)’s 1-psi waiver does not apply to blends with more

than 10% ethanol and that EPA’s reinterpretation contradicts

the statutory text, context, and history. They further contend

that EPA lacks authority to make a partial substantial-similarity

determination pursuant to Subsection 7545(f)(1)(A), and that

its finding that E15 is substantially similar to E10 is arbitrary

and capricious. Ethanol Petitioners also challenge EPA’s

reinterpretation of Subsection 7545(f)(1)(A), but they maintain

that the E15 Rule does not go far enough. They assert that fuel

blends with more than 15% ethanol are substantially similar to

E10, obligating EPA to extend the 1-psi waiver to those higher-

ethanol blends. The Small Retailers Coalition challenge is

directed to EPA’s certification that the E15 Rule will not

adversely affect small businesses. The Coalition argues that

certification was inconsistent with the Regulatory Flexibility

Act and irrational because small fuel retailers will be required

to undertake costly infrastructure upgrades to store and sell

E15.

II.

As a threshold matter, the court addresses whether at least

one of the petitioners has standing under Article III of the

Constitution to obtain review of the E15 Rule. Steel Co. v.

Citizens for a Better Env’t, 523 U.S. 83, 101–02 (1998);

Carbon Sequestration Council v. EPA, 787 F.3d 1129, 1137

(D.C. Cir. 2015). If one of the Petroleum Petitioners has

9

standing, and if their contention that the E15 Rule is contrary

to the plain text, context, and history of the Clean Air Act is

persuasive, then, absent the severability of Section II, the court

must vacate the E15 Rule.

Article III standing requires that a petitioner show an

“injury in fact,” a “causal connection” between the injury and

the challenged conduct, and a likelihood “that the injury will

be redressed by a favorable decision.” Lujan v. Defs. of

Wildlife, 504 U.S. 555, 560–61 (1992) (internal quotation

marks omitted). The party invoking the court’s jurisdiction

bears the burden of demonstrating a “substantial probability”

of standing. Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir.

2002) (quoting Am. Petro. Inst. v. EPA, 216 F.3d 50, 63 (D.C.

Cir. 2000)). When standing is not self-evident — for example,

as may be true if a petitioner is not directly regulated by the

challenged rule — “the petitioner must supplement the record

to the extent necessary to explain and substantiate its

entitlement to judicial review.” Id. at 900. An association may

bring suit on behalf of its members “only if (1) at least one of

its members would have standing to sue in [its] own right; (2)

the interest it seeks to protect is germane to its purpose; and (3)

neither the claim asserted nor the relief requested requires the

member to participate in the lawsuit.” Chesapeake Climate

Action Network v. EPA, 952 F.3d 310, 318 (D.C. Cir. 2020)

(quoting Am. Trucking Ass’ns v. Fed. Motor Carrier Safety

Admin., 724 F.3d 243, 247 (D.C. Cir. 2013)).

One of the Petroleum Petitioners, American Fuel &

Petrochemical Manufacturers (“AFPM”), a trade association

that “represents most refiners in the United States,” Susan W.

Grissom Decl. ¶ 2, has standing. Two of its members, Motiva

Enterprises LLC and Sinclair Oil Corporation, could each

assert a justiciable claim in its own right. Motiva and Sinclair

assert injuries under the doctrine of competitor standing, which

10

recognizes that “economic actors ‘suffer constitutional injury

in fact when agencies lift regulatory restrictions on their

competitors or otherwise allow increased competition.’” Nat’l

Biodiesel Bd. v. EPA, 843 F.3d 1010, 1015 (D.C. Cir. 2016)

(quoting La. Energy & Power Auth. v. FERC, 141 F.3d 364,

367 (D.C. Cir. 1998)). To demonstrate competitor injury, a

petitioner must “show an actual or imminent increase in

competition.” Sherley v. Sebelius, 610 F.3d 69, 73 (D.C. Cir.

2010). With injury established, the rest of the standing inquiry

ordinarily falls into place: the increased competition is caused

by the agency’s action and redressed by restoring the

regulatory status quo ante. See Wash. All. of Tech. Workers v.

U.S. Dep’t of Homeland Sec., 892 F.3d 332, 341–42 (D.C. Cir.

2018); Nat’l Biodiesel Bd., 843 F.3d at 1015.

Motiva and Sinclair produce petroleum products. William

Spurgeon Decl. ¶ 4; Adam G. Suess Decl. ¶ 1. They compete

with biofuel producers in the motor vehicle fuel market

because ethanol is a substitute for the traditional petroleum-

based components of gasoline. Spurgeon Decl. ¶ 25. By

removing the otherwise applicable 9-psi volatility limit, the

E15 Rule is substantially likely to increase demand for E15.

Suess Decl. ¶¶ 10–11; see Nat’l Biodiesel Bd., 843 F.3d at

1015–16; Delta Const. Co. v. EPA, 783 F.3d 1291, 1299–1300

(D.C. Cir. 2015). EPA, upon extrapolating from monthly E15

retail sales data collected in Minnesota between 2015 and 2018,

has estimated that “annual per-station sales of E15 would have

been about 16% higher had the 1psi waiver been available for

E15.” Resp. to Comments at 97. Increased production of E15

is, in turn, likely to cause a significant rise in demand for

ethanol and a significant reduction in demand for petroleum.

Spurgeon Decl. ¶ 25; Suess Decl. ¶¶ 12–13. Because vacatur

of the E15 Rule would redress these injuries, Motiva and

Sinclair have competitor standing. See Nat’l Biodiesel Bd., 843

F.3d at 1015.

11

The other two elements of associational standing are also

satisfied. The interests that AFPM seeks to protect are germane

to its purpose; it has an “obvious interest in challenging” a rule

detrimental to the financial wellbeing of its members. Am.

Trucking Ass’ns, 724 F.3d at 247. Neither the claims asserted

regarding EPA’s statutory violations, nor the relief sought by

vacatur requires the participation of AFPM’s members. See

Ctr. for Sustainable Econ. v. Jewell, 779 F.3d 588, 597 (D.C.

Cir. 2015). Because AFPM has shown a substantial probability

of associational standing, the court need not consider other

bases offered by Petroleum Petitioners to establish Article III

standing. Ctr. for Biological Diversity v. EPA, 861 F.3d 174,

182 (D.C. Cir. 2017).

III.

Turning to the merits, Petroleum Petitioners contend that

the E15 Rule is contrary to the plain meaning of Subsection

7545(h)(4). They maintain that the statute is clear on its face:

the phrase “fuel blends containing gasoline and 10 percent . . .

ethanol” refers to E10 and E10 only. It follows, they conclude,

that Subsection 7545(h)(4) does not authorize EPA to alter the

volatility limits for E15. EPA responds that the term

“containing” is sufficiently ambiguous to render its revised

interpretation reasonable and deserving of deference by the

court. Intervenors Growth Energy, National Corn Growers

Association, and Renewable Fuels Association (“Biofuel

Intervenors”) agree with Petroleum Petitioners that the statute

is unambiguous, but they contend that Subsection 7545(h)(4)

unambiguously applies to all fuel blends with at least 10%

ethanol.

The court’s review of EPA’s interpretation of the Clean

Air Act proceeds under the two-step framework announced in

12

Chevron, U.S.A., Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837 (1984). See Michigan v. EPA, 576 U.S. 743,

751 (2015); Am. Fuel & Petro. Mfrs. v. EPA, 937 F.3d 559, 574

(D.C. Cir. 2019). The court first asks “whether Congress has

directly spoken to the precise question at issue.” Chevron, 467

U.S. at 842. In answering that question, the court exhausts the

“traditional tools of statutory construction,” considering the

provision’s text, context, legislative history, and purpose. Id.

at 843 n.9; see U.S. Sugar Corp. v. EPA, 830 F.3d 579, 605

(D.C. Cir. 2016). When Congress has written clearly, “that is

the end of the matter,” because the court and EPA “must give

effect to the unambiguously expressed intent of Congress.”

Chevron, 467 U.S. at 842–43. When “the statute is silent or

ambiguous with respect to the specific issue,” then the court

will uphold EPA’s interpretation so long as it “is based on a

permissible construction of the statute.” Id. at 843.

Our interpretation of Subsection 7545(h)(4) “begin[s] with

the language employed by Congress and the assumption that

the ordinary meaning of that language accurately expresses the

legislative purpose.” Engine Mfrs. Ass’n v. S. Coast Air

Quality Mgmt. Dist., 541 U.S. 246, 252 (2004) (quoting Park

‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 194

(1985)). The statutory directive is straightforward. Subsection

7545(h)(4) authorizes EPA to grant a 1-psi waiver to a

particular type of fuel: “blends containing gasoline and 10

percent denatured anhydrous ethanol.” 42 U.S.C. § 7545(h)(4).

In other words, Subsection 7545(h)(4) refers to E10. This

understanding accords with the ordinary meaning of the word

“contain” used as a percentage. Consider a label that a bottle

of wine “contains 10% alcohol by volume.” No one would

understand that number to be other than a literal statement of

the actual amount of alcohol in a serving. By contrast, the label

would be misleading if the wine contained only 5% alcohol or

15% alcohol. Here the ordinary meaning of the phrase

13

“containing gasoline and 10 percent . . . ethanol” specifies the

relative amount of ethanol in a unit of fuel, not the minimum

or maximum ends of an unspecified range. Confirming the

ordinary meaning of “containing,” the inclusion of the

adjectives “denatured” (ethyl alcohol, that is, undrinkable

alcohol) and “anhydrous” (alcohol that has had water removed

to a purity of 99% ethanol), Resp’t’s Br. 17 n.6, reads like a

scientific formula. A chemist or petroleum engineer would not

read instructions directing the preparation of a solution

containing “10 percent denatured anhydrous ethanol” to

require the addition of anything other than 10 percent

denatured anhydrous ethanol, and no more.

This understanding of “containing” comports with

contemporaneous dictionary definitions. When Subsection

7545(h)(4) was enacted in 1990, the word “contain” was

defined, as relevant, as “to have within,” “to hold,” or “to

comprise” in a manner that “implies the actual presence of a

specific substance or quantity within something.” WEBSTER’S

NEW COLLEGIATE DICTIONARY 282 (9th ed. 1990); see also 3

THE OXFORD ENGLISH DICTIONARY 807 (2d ed. 1989).

Applying those definitions, Subsection 7545(h)(4) is best read

to concern gasoline that “has within it” or “holds” a specific

quantity (10%) of a specific substance (ethanol). By its plain

terms, then, Subsection 7545(h)(4) applies to E10, leaving no

room for EPA to exempt E15 from the 9-psi volatility limit

prescribed in Subsection 7545(h)(1).

Statutory context reinforces the conclusion that Congress

intended Subsection 7545(h)(4) to regulate E10. Numerous

provisions of the Clean Air Act enacted contemporaneously

with Subsection 7545(h) in the 1990 Amendments, Pub. L. No.

101-549, 104 Stat. 2399, have percentages with modifiers.

Sometimes the modifier establishes a minimum allowable

amount. For example, EPA is directed to promulgate

14

regulations requiring certain urban buses to use “low-polluting

fuels,” 42 U.S.C. § 7554(c)(2)(A), including methanol, which

is defined as a blend containing “at least 85 percent methanol,”

id. § 7554(f)(2) (emphasis added). The 1990 Amendments also

require that gasoline “contain not less than 2.7 percent oxygen”

by weight during the winter months in areas that do not meet

the national ambient air quality standards for carbon monoxide.

Id. § 7545(m)(2) (emphasis added). Other times the modifier

imposes an upper limit. Addressing misfueling, Congress

prohibited any person from knowingly introducing into

commerce diesel fuel that “contains a concentration of sulfur

in excess of 0.05 percent (by weight).” Id. § 7545(g)(2)

(emphasis added). And in Subsection 7545(h)(1), Congress

instructed EPA to “promulgate regulations making it unlawful

for any person during the high ozone season” to “introduce into

commerce gasoline with a Reid Vapor Pressure in excess of 9.0

pounds per square inch.” Id. § 7545(h)(1) (emphasis added).

In contrast, Congress did not include any modifiers in

Subsection 7545(h)(4). Section 7545 itself illustrates that

Congress knew how to use modifiers to set upper and lower

limits. The absence of such a term in Subsection 7545(h)(4)

may properly be understood as purposeful. See Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 452 (2002); New York v. EPA,

413 F.3d 3, 39–40 (D.C. Cir. 2005). Had Congress intended to

exempt a range of ethanol fuels from the 9-psi limit, it could

have referred to fuel containing “at least” or “not more than”

10% ethanol, much as appeared in the House version of the 1-

psi waiver. See H.R. 3030, 101st Cong. § 214 (1989). The

reference to E10 without modifiers suggests that Congress

intended Subsection 7545(h)(4) to apply to E10.

The statutory history points in the same direction. EPA

had regulated fuel volatility before Subsection 7545(h)(4) was

enacted. In particular, the year before the 1990 Amendments

15

were enacted, EPA had imposed seasonal, state-specific

volatility limits on gasoline and granted ethanol fuels a 1-psi

waiver, provided the fuel “contain at least 9% ethanol” and its

“maximum ethanol content . . . not exceed any applicable

waiver conditions” granted pursuant to Subsection 7545(f)(4).

Volatility Regulations for Gasoline and Alcohol Blends Sold in

Calendar Years 1989 and Beyond, 54 Fed. Reg. 11,868, 11,885

(Mar. 22, 1989). Because only E10 had received a waiver at

that time, EPA’s exemption effectively applied only to fuels

containing between 9 and 10 percent ethanol. See E15 Rule,

84 Fed. Reg. at 26,988. The following year, when Congress

enacted Subsection 7545(h), it retained EPA’s general

framework for regulating fuel volatility, including granting

ethanol fuels a 1-psi allowance. But Congress rejected EPA’s

open-ended approach to the 1-psi waiver, declining to codify

the “at least” modifier and flexible upper limit in EPA’s 1989

Rule, instead limiting Subsection 7545(h)(4) to E10.

Other legislative actions by Congress around the same time

that it enacted the 1990 Amendments are to the same effect.

Ten days before enacting the 1990 Amendments, Congress

raised the tax imposed on motor vehicle fuels as part of the

High Way Trust Fund. Omnibus Budget Reconciliation Act of

1990, Pub. L. No. 101-508, § 11211(a)(2), 104 Stat. 1388–423

(1990). A lower tax was imposed on “any mixture at least 10

percent of which is alcohol . . . if any portion of such alcohol is

ethanol.” Id. § 11211(a)(5)(F), 104 Stat. 1388–424 (emphasis

added). This legislation further underscores that Congress’

omission of a modifier in Subsection 7545(h)(4) was

deliberate.

Indeed, EPA itself has previously credited Subsection

7545(h)’s legislative history as evidence that it lacked authority

to extend the 1-psi waiver to fuels other than E10. In 1991,

when implementing Subsection 7545(h)(4), EPA stated that

16

“the legislative history indicates that Congress envisioned

continuation of the 9 to 10 percent requirement” set forth in

EPA’s 1989 Rule. Regulation of Fuels and Fuel Additives:

Standards for Gasoline Volatility; and Control of Air Pollution

from New Motor Vehicles and New Motor Vehicle Engines:

Standards for Particulate Emissions from Urban Buses, 56

Fed. Reg. 24,242, 24,245 (May 29, 1991). And in adopting

regulations in 2011 to prevent misfueling, EPA pointed to

Subsection 7545(h)(4)’s “legislative history [as] support[ing]

EPA’s interpretation . . . that the 1 psi waiver only applies to

gasoline blends containing 9–10 vol% ethanol.” Misfueling

Rule, 76 Fed. Reg. at 44,434.

The defenses of EPA’s new interpretation of Subsection

7545(h)(4) in the E15 Rule are unpersuasive. EPA and Biofuel

Intervenors maintain that the statute is ambiguous inasmuch as

no party challenges EPA’s longstanding view that the phrase

“containing . . . 10 percent,” in Subsection 7545(h)(4)

“includes [blends with] as little as 9 percent” ethanol. E15

Rule, 84 Fed. Reg. at 26,992 n.90. But recognizing some

compliance margin associated with Subsection 7545(h)(4)’s

“10 percent” does not support interpreting this provision as

though it applied to blends containing “at least 10 percent”

ethanol. See City of Arlington v. FCC, 569 U.S. 290, 307

(2013). EPA and Biofuel Intervenors also maintain that

Subsection 7545(h)(4) can be read as specifying the minimum

ethanol content eligible for the 1-psi waiver because the word

“containing” is frequently understood to implicitly mean

“containing at least.” Resp’t’s Br. 40; Biofuel Intervenors’ Br.

17–18. As an example, EPA states that a physician’s diagnosis

that a “patient’s blood must ‘contain 10% white blood cells’”

to repel infections “clearly does not mean exactly 10.0% white

blood cells” but rather “at least 10% white blood cells.”

Resp’t’s Br. 40. Yet the problem with this argument is that “the

sort of ambiguity giving rise to Chevron deference is a creature

17

not of definitional possibilities, but of statutory context.” New

York v. EPA, 443 F.3d 880, 884 (D.C. Cir. 2006) (internal

quotation marks omitted) (quoting Am. Bar Ass’n v. FTC, 430

F.3d 457, 469 (D.C. Cir. 2005)). Examples from other settings

are unlikely to undermine contextual evidence of textual

meaning in a complex regulatory regime designed to reduce air

pollution where the unmodified term “containing” is used with

a percentage.

As to legislative history, EPA and Biofuel Intervenors

point out that Congress considered but ultimately rejected the

House version of Subsection 7545(h)(4), which provided that

“the Administrator may permit gasoline containing at least 9

but not more than 10 per centum ethanol (by volume) to exceed

the applicable Reid vapor pressure requirements by up to 1.0

psi.” H.R. 3030, 101st Cong. § 214 (as introduced, July 27,

1989) (emphasis added). They maintain that Congress’

decision not to adopt the House’s modifier of “not more than”

demonstrates there was no intention to limit the 1-psi waiver to

E10. See Resp’t’s Br. 35–37; Biofuel Intervenors’ Br. 22–23.

This account of the legislative history is meaningfully

incomplete. Congress was faced with at least three competing

versions of the fuel volatility waiver. The bill introduced in the

House limited the 1-psi waiver to fuel containing “not more

than” 10% ethanol. H.R. 3030, § 214. The House bill reported

out of Committee used different phrasing, stating that “the

Administrator shall permit a 1.0 pound per square inch (psi)

tolerance level for gasoline containing at least 10 percent

ethanol.” H.R. 3030, 101st Cong. § 216 (as reported by H.

Comm. on Public Works and Transp., May 21, 1990)

(emphasis added). Congress adopted neither of those versions,

instead adopting the Senate’s phrasing nearly exactly as

introduced, which provided that only “fuel blends containing

gasoline and 10 per centum denatured anhydrous ethanol”

would receive the 1-psi waiver. S. 1360, 101st Cong. § 214 (as

18

introduced, Sept. 14, 1989); see also Pub. L. No. 101-549,

§ 216, 104 Stat. 2399, 2490. The legislative history is silent on

why Congress rejected each House formulation and instead

adopted the Senate version. This ambiguous history hardly

suffices to overcome the plain text, for courts “do not resort to

legislative history to cloud a statutory text that is clear.”

Ratzlaf v. United States, 510 U.S. 135, 147–48 (1994).

Lastly, EPA and Biofuel Intervenors maintain that

confining Subsection 7545(h)(4) to E10 is contrary to its

“ethanol-promoting purpose.” Biofuel Intervenors’ Br. 22; see

Resp’t’s Br. 41. Perhaps so, in one respect. Yet Subsection

7545(h) need not be understood to serve one purpose at all

costs. See Freeman v. Quicken Loans, Inc., 566 U.S. 624, 637

(2012); cf. Ams. for Clean Energy v. EPA, 864 F.3d 691, 714

(D.C. Cir. 2017). A Senate Committee Report on the 1990

Amendments highlights that Congress was balancing multiple

interests. As EPA and Biofuel Intervenors maintain, scientific

evidence available to Congress at the time of Subsection

7545(h)’s enactment shows that increasing the ethanol content

in a fuel blend beyond 10% reduces the blend’s volatility. See,

e.g., Robert L. Furey, Volatility Characteristics of Gasoline-

Alcohol and Gasoline-Ether Fuel Blends 23 (1985). But the

record also reflects congressional attention to wide-ranging

economic, energy-security, and geopolitical implications of

authorizing such blends. See S. Rep. No. 101-228, at 110

(1989). In limiting the 1-psi allowance to blends “containing

10 percent ethanol,” Congress balanced those interests.

Subsection 7545(h)(4) thus reflects a compromise, not simply

a desire to maximize ethanol production at all costs.

Because the text, structure, and legislative history of

Subsection 7545(h)(4) foreclose EPA’s application of the 1-psi

waiver to E15, the court must determine whether that aspect of

the E15 Rule is severable. Severability “depends on the issuing

19

agency’s intent,” North Carolina v. FERC, 730 F.2d 790, 796

(D.C. Cir. 1984), and severance “is improper if there is

substantial doubt that the agency would have adopted the

severed portion on its own,” New Jersey v. EPA, 517 F.3d 574,

584 (D.C. Cir. 2008) (internal quotation marks omitted)

(quoting Davis Cty. Solid Waste Mgmt. v. EPA, 108 F.3d 1454,

1459 (D.C. Cir. 1997)). The court need not reach the

petitioners’ challenges to the E15 Rule’s interpretation of

Subsection 7545(f)(1). EPA stated in the preamble that its

“substantial-similarity” finding and interpretation of

Subsection 7545(h)(4) in Section II “establish a single, unified

program that allows the introduction into commerce of E15 at

10.0 psi RVP during the summer driving season,” and that it

“d[id] not intend for any of these individual actions to be

severable.” E15 Rule, 84 Fed. Reg. at 26,983. In contrast, EPA

stated that Section II was “severable from” Section III,

addressing the RIN market, “as these are two separate actions,

each of which operates independently from the other.” Id.

Accordingly, the court will sever and vacate Section II of

the E15 Rule and dismiss the remaining petitions as moot.