EPA Asks SCOTUS for Delay in RFS Case

OMAHA (DTN) -- The EPA has asked the Supreme Court for an extension to file a response to a refiner's petition for review of an appeals court's January 2020 ruling on small-refinery exemptions.

HollyFrontier Corp. appealed to the high court in September after the U.S. Court of Appeals for the 10th Circuit in Denver turned down a request for the whole 10th Circuit to rehear a case involving small-refinery exemptions. In that case, the appeals court originally ruled the EPA mishandled the small-refinery exemptions program in the Renewable Fuel Standard and granted exemptions to three refiners who did not qualify.

Though the refiner has asked for the Supreme Court to hear the case, it is rare for the court to do so.

The Trump administration on Wednesday asked for an extension to Dec. 14, 2020, to file its response.

"This extension is requested to complete preparation of the government's response, which was delayed because of the heavy press of earlier assigned cases to the attorneys handling this matter," the administration's letter to the court said.

In its petition to the Supreme Court, HollyFrontier asked the court to consider whether the RFS exemption program has been implemented correctly by the EPA.

At issue is whether the agency can require small refiners to have received exemptions uninterrupted in order to continue to qualify.

Renewable Fuels Association President and CEO Geoff Cooper said it's not clear why the EPA would be interested in the case after the agency declined to act previously.

"We were surprised to see EPA signaling its intention to weigh in on the petition filed by HollyFrontier for Supreme Court review of the 10th Circuit's decision," he said in a statement.

"If EPA decides to take a position on the request for further judicial review, we hope it's to convey such review is unnecessary and falls far short of the established standards for Supreme Court's involvement. It's time to move forward and put an end to the uncertainty and instability of small-refinery exemptions, which have plagued the RFS for the past three to four years."

In addition, CVR Refining and HollyFrontier Corp. on Sept. 4 filed a petition with the Supreme Court, asking for a review of the 10th Circuit ruling. The Trump administration did not file an appeal to the Supreme Court before the deadline.

On Jan. 24, 2020, the 10th Circuit ruled EPA didn't have the authority to issue small-refinery exemption extensions to three refiners 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 Renewable Fuel Standard compliance costs to consumers at the pump.

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.

The ethanol and agriculture groups were the four petitioners in the 10th Circuit case. A panel of judges found EPA abused its authority by granting small-refinery exemptions to CVR Refining and HollyFrontier that were not extensions of previously existing exemptions.

The gap-year waiver requests in question were made to "establish a chain of continuously 'extended' exemptions," the groups said.

EPA received 67 requests from small refiners for retroactive waivers for 2011 to 2018. The Trump administration denied most of those exemptions.

The requests poured in after the Trump administration decided not to appeal a January 2020 ruling from the 10th Circuit. The court ruled EPA mishandled three waivers granted to small refiners.

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

Follow him on Twitter @toddneeleyDTN

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