The US Supreme Court agreed Friday to weigh in on a debate over a federal law that governs the Renewable Fuel Standard Program. In HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, the court will examine whether the Environmental Protection Agency (EPA) exceeded its authority when it exempted three small oil refineries from obligations under the statute.
As the refineries explain in their petition for certiorari, “The Renewable Fuel Standard requires refiners, blenders, and importers of transportation fuel to blend increasing amounts of renewable fuels into their products each year.” In recognition of the reality that the requirements may have a disparate impact on small refineries, Congress granted those refineries an initial, blanket exemption. The case before the Supreme Court seeks to clarify the circumstances under which the EPA may exempt small refineries on a case-by-case basis now that the initial blanket exemption has expired. At the center of the dispute is a provision of the statute that reads, “A small refinery may at any time petition the [EPA] for an extension of the exemption…for the reason of disproportionate economic hardship.”
Noting that the statute refers to “an extension of the exemption,” the US Court of Appeals for the Tenth Circuit held last year that the EPA may only exempt small refineries that have continuously been exempted in the past. The court reasoned, “[A] small refinery which did not seek or receive an exemption in prior years is ineligible for an extension, because at that point there is nothing to prolong, enlarge, or add to.” The refineries reject this interpretation, arguing that it is “unduly narrow.”
The federal government, for its part, has raised doubts about the appropriateness of Supreme Court intervention in the case. In a brief opposing the refineries’ petition, Acting Solicitor General Jeffrey Wall wrote, “The government agrees with petitioners that the question presented has important implications for the renewable fuel standard program. This case, however, would be an unsuitable vehicle for addressing the question.”