Groups urge administration not to appeal court’s SRE ruling

By Erin Voegele | March 10, 2020

Representatives of the biofuels industry are speaking out against the Trump administration’s decision to seek an extension of the deadline to challenge the Tenth Circuit Court of Appeals Jan. 24 decision that struck down three small refinery exemptions (SREs) approved by the U.S. EPA.

The court’s Jan. 24 ruling, if implemented nationally, would significantly lower the number of small refineries that are eligible to apply for exemptions to their Renewable Fuel Standard blending requirements. This is because the court ruled that the EPA cannot extend exemptions to any small refineries whose earlier, temporary exemptions had lapsed. The court also found that the EPA abused its discretion in failing to explain how the agency could concluded that a small refinery might suffer a disproportionate economic hardship when the agency has simultaneously consistently maintained that costs for renewable identification numbers (RINs) are passed through and recovered by those same refineries.

The lawsuit challenging the EPA’s approval of the three SREs was originally filed in May 2018 by the Renewable Fuels Association, American Coalition for Ethanol, National Corn Growers Association, and National Farmers Union.

The U.S. Department of Justice on March 5 filed a motion seeking a 15-day extension of the deadline to file a petition for rehearing and/or rehearing en banc. The original deadline to challenge the court’s ruling was March 9.

In its motion, the Department of Justice said “the extension of time is necessary to allow the United States an opportunity to determine whether, and to what extent, the government will file a petition for rehearing en banc in this case.” The motion also notes the court’s Jan. 24 decision “alters EPA’s interpretation and practice, which has been employed in the adjudication of past exemption petitions from many small refineries” and states the court’s interpretation of Renewable Fuel Standard regulation “could also have significant practical impacts on the RFS program going forward.” Due to these factors, the Department of Justice said “the United States requires more time to consider whether to file a petition for rehearing en banc on this issue.”

The court approved the Department of Justice’s motion on March 9, but said it would not grant any additional extensions of the deadline. A petition for rehearing or rehearing en banc must now be filed by March 24.

Later that day, a similar motion was filed by intervenor respondents HollyFrontier Refining & Marketing LLC, HollyFrontier Cheyenne Refining LLC, HollyFrontier Woods Cross Refining LLC, and Wynnewood Refining Co. LLC, also seeking a 15-day extension. The motion argued that “an extension of time for intervenor-respondents is necessary to align the filing deadline for all parties.” The court approved the motion, extending the deadline to March 24, but again noted it will not grant further extensions of the deadline.

The petitioners in the case, the RFA, NCGA, ACE and NFU, issued a statement on March 10 expressing disappointment in the Trump administration for seeking the extension and considering an appeal of the court’s Jan. 24 decision.

“We are very disappointed that the Administration has opted to kick the can on deciding whether to appeal the court decision, as all initial indications suggested EPA would not appeal the ruling and would correctly apply the decision nationally,” said the petitioners in the statement. “This delay just prolongs uncertainty in the marketplace and stokes more angst and frustration in farm country. Still, we are hopeful the Administration will take this additional time to thoroughly review the court’s well-reasoned, unambiguous decision and carefully consider the adverse consequences of appealing. It is our hope that cooler heads prevail and that the White House reaches the logical conclusion that an appeal is both imprudent and unnecessary. Joining three refineries — who represent less than 1 percent of the nation’s oil refining capacity — in their appeal would be a rash and risky decision for the Administration. In fact, many oil refiners and the American Petroleum Institute have joined farmers and the ethanol industry in opposing an appeal and advocating for nationwide application of the court decision. An appeal by the Administration would be viewed by rural America as a senseless poke in the eye and a breach of the President’s commitments on ethanol and the Renewable Fuel Standard.”