ELR Citation: ELR 20098
No(s). 94-5178 (D.C. Cir. Aug 20, 1996)

The court holds that environmental groups lack standing to challenge the U.S. Treasury Department's failure to prepare an environmental impact statement for its authorization of an alternative fuel additive tax credit. The groups claimed that the tax credit would encourage production of an ethanol-derived additive, resulting in increased agricultural production of the crops necessary to make ethanol and attendant pollution on farm land bordering wildlife areas that they visit. The court first holds that the environmental groups failed to establish an injury to their particularized interest, rather than to the environment in general, because they did not demonstrate that individual farmers in the areas they visit would affirmatively respond to the tax credit by significantly increasing production. The court next holds that even if the groups could establish injury to their particularized interest, they failed to show that authorization of the tax credit created a substantial probability of injury to that interest. The groups' chain of causation depends on allegations that cannot be easily described as true or false and relies on the acts of several groups of third parties who are not before the court. Further, the statements of various members of Congress prophesying that the new tax rule would stimulate increased domestic agricultural production do not demonstrate causation. Such congressional views do not establish that the credit is substantially likely to stimulate production of the ethanol-derived additive or of ethanol, increase domestic agricultural production, or injure areas the groups enjoy or tap water that they use. In addition, the groups failed to provide competent evidence to support each link in their alleged chain of events linking the tax credit to increased agricultural pollution. It is far from clear that a tax credit for the fuel additive will stimulate a demand for ethanol, because although the additive is made partly of ethanol, it is also an ethanol substitute. Further, the record does not detail how farmers who might affect the groups' interests may use additional agricultural chemicals, which is a critical factor in determining whether these chemicals pose any risk of environmental injury. And production of the additive currently demands less than 2 percent of total domestic ethanol production, although the rule providing for a tax credit for the additive's use has been in effect for several years.

Counsel for Appellants
David F. Williams, James W. Moorman
Cadwalader, Wickersham & Taft
1333 New Hampshire Ave. NW, Ste. 700, Washington DC 20036
(202) 862-2300

Counsel for Appellees
David C. Shilton
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before: EDWARDS, Chief Judge, WALD, SILBERMAN, BUCKLEY, WILLIAMS, GINSBURG, SENTELLE, HENDERSON, RANDOLPH, ROGERS, and TATEL, Circuit Judges.