Court agrees to expedite refiner’s challenge to EPA renewable standards

Source: Jeremy P. Jacobs, E&E reporter • Posted: Thursday, October 31, 2013

Federal judges yesterday granted a refiner’s request to expedite its challenge to U.S. EPA’s renewable fuel standards.

Monroe Energy LLC, which is a subsidiary of Delta Air Lines Inc., asked the U.S. Court of Appeals for the District of Columbia Circuit to hear and decide the case before next June — the deadline for refiners to comply with EPA’s required 16.55 billion-gallon biofuel requirement.

In a short order, the D.C. Circuit put forth a briefing schedule that concludes by the end of February. The court instructed its clerk to set oral arguments in the case “on the first appropriate date following the completion of briefing.”

Delta purchased the Pennsylvania refinery last year from Phillips 66 in hopes of saving money on jet fuel.

The airline quickly ran into trouble, however, because its new refinery does not blend its own ethanol into petroleum products. Consequently, it must purchase credits to comply with EPA’s standards.

The price of EPA’s credits, known as renewable identification numbers, or RINs, has risen to as much as $1.40 per gallon of ethanol. The market has remained in flux as refiners come closer to hitting the so-called blend wall — the 10 percent limit on the amount of ethanol that can be blended into gasoline safely.

Delta called EPA’s standards “absurd” in court documents because they require more ethanol blending than the market can accept. EPA’s rules require the blending of 13.8 billion gallons of conventional ethanol.

Further, Delta now faces the prospect of spending more money on the credits than the $150 million it laid out to buy the refinery.

Delta said a speedy trial was particularly necessary because EPA was more than eight months past its statutory deadline in issuing the standards (Greenwire, Oct. 16).

Other trade associations — the American Petroleum Institute and American Fuel & Petrochemical Manufacturers — also filed lawsuits challenged EPA’s standards. They were consolidated with Delta’s.