Small-Refinery Case Dismissed

Court Rules Advanced Biofuels Association Couldn't Identify Final Action

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The U.S. Court of Appeals for the District of Columbia Circuit dismissed a lawsuit challenging the EPA's small-refinery exemption program. (Photo by AgnosticPreachersKid, CC-BY-SA 3.0)

OMAHA (DTN) -- A federal court on Tuesday dismissed one of several lawsuits challenging the EPA's granting of small-refinery exemptions.

The U.S. Court of Appeals for the District of Columbia Circuit said in an order the Advanced Biofuels Association did not identify a final agency action in its lawsuit filed in May 2018.

The biofuels interest group argued EPA was overstepping its authority in granting an increasing number of Renewable Fuel Standard waivers to small refiners.

EPA has granted 85 waivers since 2016, totaling about 4.04 billion gallons of biofuels not blended with petroleum. A public comment period is currently ongoing on an EPA proposal to account for gallons waived in the 2020 RFS volumes proposal. That proposal has drawn stiff opposition from biofuel and agriculture groups.

Though the court on Tuesday dismissed the case, it did address the concern raised by the group in court that EPA changed course in the waivers program.

"To be sure, the EPA's briefing and oral argument paint a troubling picture of intentionally shrouded and hidden agency law that could have left those aggrieved by the agency's actions without a viable avenue for judicial review," the court said in its order.

"But we need not decide in this case whether or how an ongoing pattern of genuinely secret law might be challenged because the EPA's changed rules of decision have been disclosed both through the numerous informal adjudication decisions recently released to the association and, of particular import, the August 2019 formal and public memorandum announcing the EPA's new decisional framework and applying it to 42 refineries. During oral argument, the EPA acknowledged that the August 2019 memorandum is 'final agency action' to which a challenge could be brought if filed within the required limitations period."

On Oct. 23, the Renewable Fuels Association, American Coalition for Ethanol, Growth Energy, National Biodiesel Board, National Corn Growers Association and National Farmers Union, argued in their petition that the EPA's granting of 31 exemptions on Aug. 9, 2019, detailed in a two-page memorandum not published in the Federal Register, constituted a final action subject to legal challenge.

"The 2018 SRE (small-refinery exemption) decision was signed Aug. 9, 2019, but it was not published in the Federal Register; in fact, its existence remained a secret until Sept. 19, 2019, when EPA attached it as an exhibit to a filing in the U.S. Court of Appeals for the 10th Circuit," the groups state in the petition for review.

In the dismissed petition, the Advanced Biofuels Association alleged EPA made a decision to "modify the criteria or lower the threshold" for determining which refiners experience "disproportionate economic hardship" in complying with the RFS.

The Advanced Biofuels Association said in its petition the EPA's actions to retroactively grant waivers has "destabilized the national renewable fuels market, economically harmed ABFA's members, and has undermined Congress's goals" for the RFS program.

On Tuesday, Sen. Charles Grassley, R-Iowa, said during a news conference with agricultural journalists that rural Americans need to comment on EPA's latest proposal on small-refinery exemptions. Grassley and other lawmakers filed official comments on the proposal.

Agriculture's expectation was the agency would account for exemptions to the RFS by averaging the actual volumes waived from 2016 to 2018.

Instead, EPA proposed using U.S. Department of Energy recommendations on waived volumes from 2015 to 2017 that fall far short of gallons actually waived.

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Todd Neeley