The invention comprises a rotary engine method and apparatus configured with a lip seal. A lip seal restricts fuel flow from a fuel compartment to a non-fuel compartment and/or fuel flow between fuel chambers, such as between a reference expansion chamber and any of an engine: rotor, vane, housing, and/or a leading or trailing expansion chamber. In separate states, high pressure and low pressure force sealing movement of the lip seal, respectively. The lip seal is optionally used in combination with a cap seal to form a dynamic seal. The dynamic seals ability to track a noncircular path are particularly beneficial for use in a rotary engine having an offset rotor and with a non-circular inner rotary engine compartment having engine wall cut-outs and/or build-ups. The dynamic sealing forces further provide cap sealing forces over a range of temperatures, pressures, fuel flow rates, varying loads, and operating engine rotation rates.