Denver court ruling leads to EPA reduction of waivers to ethanol blending

The Environmental Protection Agency says it will drastically reduce the number of exemptions granted to small refineries seeking to cut their 2020 ethanol blending requirements under the Renewable Fuel Standard.

The announcement comes after a Denver federal court ruling in January said the EPA exceeded its authority in exempting three oil refineries including one in southern Oklahoma. The exemption cited in a lawsuit decided by the U.S. 10th Circuit Court of Appeals was to the Wynnewood Refining Co., a subsidiary of CVR Energy which is majority-owned by Carl Icahn.

The other two waivers cited in the lawsuit were granted to refineries in Cheyenne, Wyo., and Woods Cross, Utah, owned by HollyFrontier Corp., owner of a refinery in Tulsa. The exemptions have relieved Wynnewood Refining and Holly Frontier of a combined $170 million in compliance costs, according to company statements cited by the plaintiffs.

The agency will apply across the nation the 10th Circuit Court ruling from January that voided three previous EPA exemptions. The court said only refineries that had exemptions continuously since 2011 could apply for new ones.

While EPA does not disclose the names of the refiners that received waivers, biofuels and oil industry sources have said the number of eligible small refineries could be as few as three. The agency, which declined comment, is now reviewing 23 petitions for exemptions, and it appears most of those will be rejected, one person in the oil industry and another person familiar with the decision said.

POLITICO’s Morning Energy Report said that in response, Iowa Sen. Chuck Grassley tweeted that he was glad to see Wheeler “seems 2b taking farmer concerns seriously This wld be a major promise kept by Pres @realDonaldTrump &help him in Iowa+the Midwest.”

Chet Thompson, president and CEO of the American Fuel and Petrochemical Manufacturers, released a statement calling the issue unsettled, and said Trump and his EPA should fight the ruling and limit its impact. “If President Trump is serious about his promise to protect small refineries and the women, men, and communities that rely on them, he would appeal this decision,” he said.


The 10th Circuit Court of Appeals made the ruling in a lawsuit filed in 2018 by the Renewable Fuels Association, National Corn Growers Association, American Coalition for Ethanol and National Farmers Union. Their May 2018 lawsuit against the EPA challenged three specific waivers granted by the EPA.

Source: Morning Energy Report