Biofuel groups urge Trump not to challenge court’s SRE ruling

By Erin Voegele | March 06, 2020

Representatives and supporters of the biofuels industry are speaking out against reports that President Trump will appeal a Jan. 24 decision handed down by the Tenth Circuit Court of Appeals that struck down three small refinery exemptions (SREs) approved by the U.S. EPA. The court decision was expected to broadly impact the agency’s handing of SREs.

The court’s ruling, if implemented nationally, would significantly lower the number of small refineries that are eligible to apply for exemptions to their Renewable Fuel Standard blending requirements. This is because the court ruled that the EPA cannot extend exemptions to any small refineries whose earlier, temporary exemptions had lapsed. The court also found that the EPA abused its discretion in failing to explain how the agency could concluded that a small refinery might suffer a disproportionate economic hardship when the agency has simultaneously consistently maintained that costs for renewable identification numbers (RINs) are passed through and recovered by those same refineries.

Federal lawmakers representing oil producing and refining states have pressured the Trump administration in recent weeks to appeal the Tenth Circuit Court’s finding and continue the EPA’s current SRE policy. A group of 13 senators sent a letter to Trump on Feb. 27 asking him to intervene in the issue and appeal the court’s decision. The following week, nine senators sent a letter to U.S. EPA Administrator Andrew Wheeler, urging the agency to appeal the court’s decision and continue to issue SREs.

Wheeler fielded questions on the EPA’s planned response to the court ruling during recent congressional hearings. He appeared before the House Subcommittee on Environment and Climate Change on Feb. 27, where he was asked if a Feb. 26 report published by Bloomberg News stating the agency had decided to limit SREs consistent with the Tenth Circuit Court decision was true.  In response, Wheeler said he is unable to confirm that news. “We are still in discussions with the Department of Justice trying to analyze the Tenth Circuit opinion,” he said. Wheeler stressed that the agency has not yet made any final determinations on its response to the court decision, but noted that the agency plans to “very shortly” release new guidance on based on the court decision.

Similar questions were asked of Wheeler during a March 4 hearing held by the House Committee on Appropriations. He said the agency was still working with its attorneys and attorneys at the Department of Justice to review the court decision, but noted a decision had to be made by the following week.

The Tenth Circuit Court ruling was unanimous and made by a panel of three judges. Impacted parties have until March 9 to file a request for the court to rehear the case in banc. That means the case could be reconsidered by all the judges of the Tenth Circuit Court of Appeals. Trump Administration, until yesterday, was expected to accept the court’s ruling. The refineries involved in the case may also challenge the court’s decision.

The National Corn Growers Association, the Renewable Fuels Association, the American Soybean Association, the National Farmers Union, Growth Energy, the American Coalition for Ethanol, the National Biodiesel Board, the Iowa Renewable Fuels Association and Fuels America issued a joint statement late on March 5 urging Trump to stand by the RFS and the court’s ruling.

 “The president needs to understand that Ted Cruz doesn’t care about this administration or families across the heartland who are counting on the White House to keep its promises,” the groups said. “Just days ago, thousands of farmers rallied behind Secretary Perdue, who expressed his confidence that we had finally reached the end of a long and painful fight against EPA demand destruction. Tearing open that wound, against the advice of rural champions and the president’s own advisors, would be viewed as a stunning betrayal of America’s rural workers and farmers. We cannot stress enough how important this decision is to the future of the rural economy and to President Trump’s relationship with leaders and voters across the heartland. Ted Cruz comes back year after year with the same lies about refinery profits, disproven over and over by economists, the EPA, and even by Big Oil. We urge the president to stand up now against this misguided effort to torpedo the rural recovery.”

The statement by the biofuel groups references a March 3 letter that more than 20 biofuel and ag groups sent to Trump that urges the administration not to appeal the court’s ruling. The letter also stresses the court’s ruling should be applied nationally.

In the letter, the biofuel and ag groups say the EPA should issue guidance on the court’s decision before the end of March, as both regulated parties and biofuel producers and are looking for certainty and stability regarding the EPA’s management of the RFS program going forward. The letter also stresses that implementing the Tenth Circuit Court decision would not adversely affect consumer gasoline prices or refiner profitability. “Applying the Tenth Circuit decision nationally will build on the success of your announcement last fall to boost biofuels and the rural economy,” the groups wrote. “It will help restore integrity to the RFS, revive demand for American biofuels and farm commodities, and bring cleaner, lower-cost fuel options to consumers across the country.”