With speculation swirling following a press report the Trump administration is set to change the small-refinery exemption program in the Renewable Fuel Standard to apply a recent court decision nationally, a group of senators from oil-producing states asked President Donald Trump in a letter on Thursday to challenge the court ruling.
On Jan. 24, 2020, the U.S. Court of Appeals for the 10th Circuit in Denver ruled EPA didn't have the authority to issue small-refinery exemption extensions to three companies that were not originally granted waivers in 2017 and 2018.
The court also found EPA "abused its discretion" by not explaining its conclusion that a small refinery could suffer disproportionate economic hardship while also maintaining refiners passed on RFS compliance costs to consumers at the pump.
The court's decision is said to affect about one-third of small refineries in the country.
Citing all unnamed sources, Bloomberg News reported this week the White House has decided to apply the 10th Circuit ruling nationally.
EPA Administrator Andrew Wheeler told the House Energy and Commerce committee on Thursday that the agency is close to deciding.
"We're still in discussions with the Department of Justice, trying to analyze the 10th Circuit opinion," Wheeler said.
"We have no announcements at this point. I'm not sure of the source of the Bloomberg story. We've not made any final determinations, but I will say President Trump is fully committed to the RFS program. He's committed to 15 billion gallons meaning 15 billion gallons."
Congress allowed EPA to extend some small-refinery exemptions temporarily.
From 2007 through 2010, 59 small refineries received waivers. The U.S. Department of Energy then examined the 59 waivers and determined that 24 of them could be extended for another two years.
In 2011 and 2012, the number of exemptions was whittled down to eight, then down to seven in 2015.
Sens. John Barrasso, Michael B. Enzi, Mike Crapo, Steve Daines, Mike Lee, Ted Cruz, Roger F. Wicker, Pat Toomey, James Lankford, John Kennedy, Shelly Moore Capito, James M. Inhofe and James Risch, asked Trump on Thursday to continue fighting the 10th Circuit ruling.
"IF allowed to stand, the decision will put a dozen small refineries in the 10th Circuit under severe financial strain and thousands of jobs at risk," the letter said.
"If applied nationally, it will jeopardize nearly all small refineries. More widely, the decision will dramatically increase RFS compliance costs for refineries of all sizes and raise gasoline prices for American drivers."
The senators ask Trump to file a petition for rehearing en banc before the full 10th Circuit, although the 10th Circuit accepts requests for en banc hearings on 10% of cases, or to seek review before the U.S. Supreme Court.
The senators said the 10th Circuit's decision was in conflict with EPA's position that small refineries are eligible for hardship relief "whether or not it received relief in the prior year."
The senators said "if allowed to stand and applied or adopted nationwide, it is believed that only two small refineries would still be eligible for hardship relief, putting tens of thousands of jobs at dozens of ineligible small refineries at risk.
"Since the decision, the price of RFS compliance credits (or RINs) has already tripled. If your administration does not appeal the decision, RIN prices will increase exponentially. Higher RIN prices will inevitably mean higher gasoline prices for American families and businesses."
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