Refineries appeal Federal court ruling—EPA does not

Small refinery operators, including one in Oklahoma who were the target of a Denver Federal Appeals Court ruling regarding waivers exempting them from the nation’s biofuels regulations have filed a challenge to the decision.

Court records indicate appeals were filed Tuesday by the Wynnewood Refining Company, HollyFrontier Cheyenne Refining, LLC, HollyFrontier Refining and Marketing, LLC and HollyFrontier Woods Cross Refining, LLC. All are asking for a rehearing en banc in the 10th U.S. Circuit Court of Appeals after a judge ruled to limit the Environmental Protection Agency’s use of waivers exempting small oil refineries from biofuels regulations.

The same records did not reflect any challenge by the EPA and only showed appeals made by the refinery operators. The government had until the end of March to file a challenge.

The EPA had been encouraged by Oklahoma Senators Inhofe and Lankford to challenge the federal judge’s ruling. Some contend a decision by the Trump administration not to appeal the ruling could be considered a major victory for the U.S. corn lobby and a blow to the oil industry.

The original lawsuit challenging the waivers was filed by the Renewable Fuels Association, the National Corn Growers Association, American Coalition for Ethanol and the National Farmers Union.

Oil refiners say the waivers have been crucial to keeping small refineries in business, but the agriculture industry believes they have been over used and have cut into demand for corn-based ethanol.

Under the U.S. Renewable Fuel Standard, refiners are required to blend billions of gallons of ethanol into their gasoline every year, a boon for corn farmers. But the EPA can give out waivers to small facilities that prove that compliance would put them in financial straits.

The waiver program was cast into question in January after the 10th Circuit Court of Appeals ruled that the Trump administration had been too free with the waivers and set a standard for the exemptions that would greatly reduce the numbers of waivers the EPA can give out in the future.

The EPA had been considering its response since. POLITICO’s Morning Energy Report said energy sector officials explained the President didn’t support an appeal. They say the White House has shifted course again on the matter to ultimately decide against challenging the court and planned instead to seek other ways to hold down the costs for refiners to comply with the law. “The decision was made NOT to appeal and let the 10th Circuit apply nationwide,” an oil industry source said in an email. “The White House will look for other ways to provide financial relief for refiners.”

Attorneys for the refineries say a rehearing by the full court is warranted because the panel of judges that issued the original hearing misinterpreted the “extension” of exemptions approved by the EPA. They also argued the decision, if allowed to stand “will gut the hardship extension for small refineries.”

“Rehearing is necessary because a panel of this Court effectively
eviscerated extensions of the small refinery hardship exemption under the Renewable Fuel Standard of the Clean Air Act (“RFS”). The exemption is a critical safety valve that protects small refineries from potentially crippling regulatory burdens. According to the panel, the term “extension” requires a small refinery to have previously and continuously received an extension of the exemption from the beginning of the RFS program in order to be eligible for any further extensions,” wrote the attorneys in the filing made Tuesday.

The Wynnewood refinery employed 300 people as of 2018 and more than 250 full-contractors in the state. The EPA had decided that unfavorable structural conditions and other factors justified “100% relief” for Wynnewood.

 

Source: Reuters

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