Ethanol Blog

Senators Ask Trump to Halt RFS Waivers Program if Appeal Forthcoming

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A bipartisan group of United States senators asked President Donald Trump on Thursday to not file an appeal on a recent small-refinery exemptions court decision, and to require the EPA not to grant new exemptions. (Photo by Nick Scalise)

A bipartisan group of United States senators asked President Donald Trump on Thursday, to not appeal a recent court decision on the small-refinery exemptions program. The lawmakers also asked Trump to require the EPA to not issue 2019 waivers if an appeal is filed, until a rehearing is completed.

On March 5, several news outlets reported the Trump administration planned to appeal a federal appeals court decision that delivered a major victory to biofuels producers and farmers who have for years fought the EPA's expansion of the program.

"As EPA continues to mull an appeal, it may come under pressure from small refineries to act on the pending retroactive small refinery exemption requests for 2019," the senators' letter said.

"We believe the court ruling prevents EPA from approving any of those 2019 exemption requests while any appeals are pending. EPA should immediately deny any of the petitions that do not meet the criteria laid out in the court decision. Nationwide application of the 10th Circuit's opinion by EPA would, in this instance, provide a level playing field and help restore stability and certainty to the RIN markets. Appealing the decision would stall, if not set back, recent progress made on the RFS."

The letter was signed by Republican Sens. Deb Fischer, Roy Blunt, Charles Grassley, Michael Rounds, John Thune, Joni Ernst, Josh Hawley, Ben Sasse, as well as Democratic Sens. Gary Peters, Tina Smith, Sherrod Brown, Richard Durbin, Amy Klobuchar, Tammy Baldwin, Debbie Stabenow and Tammy Duckworth.

On Jan. 24, the U.S. Court of Appeals for the 10th Circuit in Denver ruled EPA didn't have the authority to issue SRE extensions to three companies that were not originally granted waivers.

The ruling applied to about one-third of all small refineries in the country, meaning EPA is faced with either appealing the ruling or applying it nationally. An appeal would be asking the 10th Circuit for an en banc hearing -- a hearing before all judges in the 10th Circuit.

The U.S. Department of Justice asked for and received an extension from the court to file a petition. The DOJ has until March 24 to do so, according to court records.

Also on Thursday, the defendants in the case asked the court to seal any petition for rehearing for fear of disclosing confidential business information.

EPA defines small refiners as those producing 75,000 barrels or less per day. Small refiners have successfully petitioned the agency for exemptions by arguing the costs to purchase renewable identification numbers, or RINs, are too much to handle financially.

The court remanded back to EPA waivers issued to refiners in Wynnewood, Oklahoma; Cheyenne, Wyoming; and Woods Cross, Utah. The Cheyenne and Woods Cross petitions were from 2017, while the Wynnewood petition was in 2018.

Congress provided a temporary exemption for small refiners that could extend beyond 2010, based on a U.S. Department of Energy study or EPA determination of disproportionate economic hardship on a case-by-case basis.

The EPA granted 85 small-refinery exemptions between 2016 and 2018, totaling more than 4 billion ethanol-equivalent gallons not blended with petroleum. The agency currently has 23 exemption requests pending for the 2019 compliance period.

EPA data shows a maximum of seven small refineries could have received continuous extension of previous waivers. However, EPA granted as many as 35 exemptions in 2017.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

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