Trump DOJ Asks SCOTUS to Deny Refiners

OMAHA (DTN) -- The Trump administration has asked the Supreme Court to deny an appeal made by refining companies to review an appeals court decision on the EPA's small-refinery exemptions program.

In a brief filed with the Supreme Court on Tuesday, the U.S. Department of Justice said the refiners Holly Frontier and CVR Energy have not proven a conflict of law.

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

The ruling applied to about one-third of all small refineries in the country. EPA did not appeal the ruling and has been pushed to apply the court's decision nationally.

"The decision does not conflict with any decision of this Court or another court of appeals," the DOJ said in its brief. "Indeed, the question presented was one of first impression in the court of appeals and has never previously been addressed by any other court. Accordingly, the risk that small refineries in the 10th Circuit will be at a competitive disadvantage versus small refineries elsewhere in the country is indeterminate at this time."

The two refiners appealing to the Supreme Court have alleged the 10th Circuit ruling puts them at a competitive disadvantage to other refiners.

"The question presented in the petition is currently before the D.C. Circuit in other pending litigation, and this court will be better positioned to assess whether the issue warrants its review after that case is decided," the DOJ said.

"If the D.C. Circuit parts ways with the 10th Circuit on the question presented, this court can consider whether that conflict warrants further review. If the D.C. Circuit agrees with the 10th Circuit, petitioners' concerns about competitive disadvantages for small refineries located in the 10th Circuit will have considerably less force, as the EPA decision under review in the D.C. Circuit is national in scope."

The Renewable Fuels Association, National Corn Growers Association, National Farmers Union and the American Coalition for Ethanol released this statement in part:

"We agree with the well-reasoned position of the justice department and concur that no further review of the 10th Circuit decision is warranted. The 10th Circuit got it right when it concluded that the temporary small-refinery exemptions Congress provided could not be extended if they had previously expired. But the more important and immediate point is that the petition from Holly Frontier and CVR falls far short of the standards the Supreme Court has established for its review of lower court decisions."

The 10th Circuit 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 41 exemption requests pending for the 2019 and 2020 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

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