Renewable Fuels Coalition Welcomes Administration’s Decision Not to Seek Re-Hearing of Tenth Circuit SRE Ruling

(Renewable Fuels Association) Ethanol and farm groups today welcomed the Trump administration’s decision not to seek a re-hearing of a recent ruling by the U.S. Court of Appeals for the Tenth Circuit that struck down certain small refinery exemptions (SREs) under the Renewable Fuel Standard. On Jan. 24, a panel of Tenth Circuit judges unanimously ruled that the U.S. Environmental Protection Agency had vastly exceeded its authority in granting exemptions from 2016 and 2017 RFS requirements to three refineries.

The challenge was brought against EPA in May 2018 by the Renewable Fuels Association, National Corn Growers Association, American Coalition for Ethanol and National Farmers Union in response to the massive demand destruction caused by the Agency’s illegal and indiscriminate use of SREs. In the wake of today’s decision not to seek a re-hearing of the Renewable Fuels Association et al. v. EPA decision, the four groups called upon the EPA to immediately apply the court decision nationwide. The renewable fuels coalition released the following statement:

“We are pleased the Trump administration has decided not to side with oil refiners in seeking a re-hearing of this unambiguous and well-reasoned court decision in the Tenth Circuit.

We trust this also means the administration does not plan to petition the Supreme Court for an appeal.

Abiding by the court’s ruling is the right thing to do at a time when our industries and rural America are already suffering from the effects of COVID-19, the Saudi-Russia oil price war and ongoing trade disputes. We look to the RFS as a source of demand stability and certainty, especially in these troubling times. Requesting a re-hearing would have only prolonged uncertainty in the marketplace and exacerbated the pain and frustration already being experienced in the Heartland. With this key milestone now behind us, we look forward to EPA applying the Tenth Circuit decision nationwide to all SRE petitions, beginning with the 25 pending petitions for 2019 exemptions.”

In addition, the coalition noted that fully restoring the integrity of the RFS means also taking immediate action to restore 500 million gallons of inappropriately waived 2016 blending requirements, as ordered by the U.S. Court of Appeals for the D.C. District in 2017 (Americans for Clean Energy v. EPA). “This is EPA’s opportunity to turn the page and start a new chapter—one in which the Agency faithfully follows the law and implements the RFS in a manner consistent with Congressional intent,” the coalition stated.

For the 2016-2018 RFS compliance years, EPA issued 85 SREs eroding more than 4 billion gallons of renewable fuel blending requirements. In addition to the Tenth Circuit decision and ACEI remand, the coalition continues to consider other actions that can recapture that lost demand.

Click here for the announcement of the suit brought forward by the coalition in May 2018; click here for the January 2020 court decision in its favor. READ MORE

Excerpts from Politico's Morning Energy: SMALL REFINERS APPEAL RULING, TRUMP REMAINS SILENT: Several small refiners on Tuesday appealed a federal court's January ruling that would restrict EPA's authority to exempt them from biofuel blending requirements, Pro's Alex Guillén reports. HollyFrontier and Wynnewood Refining, the (P refiners directly affected by the ruling from the U.S. Court of Appeals for the 10th Circuit in Denver, went so far as to call the ruling a "death knell" in their Tuesday request for an en banc rehearing.

But, according to energy sector officials, Trump isn't backing the 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."

The president has previously waffled on how to handle the dispute — originally planning to accept the ruling and then, a few weeks ago, relenting to a pressure campaign from oil-state lawmakers like Sen. Ted Cruz (R-Texas) to fight it. The refiners can try to appeal the ruling on their own, but without a similar appeal from EPA, the court is less likely to agree to review it, Alex reports. READ MORE

Excerpt from Reuters: Sources told Reuters earlier this month that the Trump administration was likely to adhere to the ruling and apply it nationally.

The agency, meanwhile, was discussing the possibility of other measures to ease the financial burden on refiners, including instituting a cap or other restrictions on the price of biofuel blending credits that they must acquire to show compliance with the RFS, the sources said. READ MORE

Excerpt from National Biodiesel Board: The National Biodiesel Board said Wednesday that the widespread small refinery waivers have destroyed demand for hundreds of millions of gallons of biodiesel and renewable diesel in the past three years.

"Producers are still struggling to regain momentum and growth; a handful of facilities remain closed after shutting down last year," said Kurt Kovarik, NBB's vice president of federal affairs. "The industry is also facing the economic impacts of the coronavirus and the threat to US energy security from foreign countries flooding the markets with cheap oil. Applying the Court's ruling nationwide would eliminate an unnecessary ongoing challenge for the industry." READ MORE