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Supreme Court hears RFS exemption case

The biofuels industry and the Environmental Protection Agency and oil refineries have laid out their arguments to the U.S. Supreme Court on granting refinery exemption extensions under the Renewable Fuel Standard.

Christopher Michel with the Department of Justice says refineries must consistently hold exemptions. “But if a small refinery no longer has the exemption, it cannot obtain an extension. EPA cannot grant something that does not exist. That is the ordinary, common sense meaning of the statutory text,” Michel says.

The EPA, which is represented by the DOJ, agreed with a 10^th Circuit Court of Appeals ruling that only small refineries who are continuously exempt from the ethanol blending requirements are eligible for future extensions.

Michel says the RFS has worked since the program began in 2005. “The vast majority of small refineries including petitioners have successfully complied with the RFS in many prior years. The statue creates flexibility to facilitate ongoing compliance and other tools exist to address other challenges.”

Peter Keisler, representing an oil refinery, says extensions don’t have to be continuous if a refinery is facing an economic hardship. “Driving those small refineries out of the market would undermine the statue’s energy and independence goals and that’s one of the reasons Congress authorized them to petition at any time based on hardships.”

A ruling is expected in June.

The four organizations making up the Biofuels Coalition – the Renewable Fuels Association, the National Corn Growers Association, National Farmers Union, and the American Coalition for Ethanol – represent the industry in HollyFrontier Cheyenne Refining, LLC, et al. v. Renewable Fuels Association, et al.