Court rules for EPA on refinery exemptions, chastises method

Source: By Jeremy P. Jacobs, E&E News reporter • Posted: Tuesday, November 12, 2019

A federal appeals court today rejected a challenge to EPA’s changing policy for exempting small refineries from renewable fuel requirements while sharply criticizing EPA’s handling of the issue.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that the Advanced Biofuels Association had not properly identified a final agency action in its case and thus was barred from legal recourse.

At issue are exemptions EPA grants to small refineries under the Clean Air Act renewable fuel standard program, which sets requirements for refineries every year.

Under the 2005 law, EPA may grant exemptions to small refineries if certain criteria are met, including if significant economic hardship would be caused by meeting the renewable fuel standards.

EPA historically has not disclosed, or publicly acknowledged, who gets those exemptions and the justification for them, citing confidential business information.

In recent years, the number of exemptions has shot up. In 2013 and 2014, for example, eight were granted. In 2018, 31 refineries got exemptions.

EPA didn’t acknowledge the uptick, leading the Advanced Biofuels Association to petition and then sue the agency. The association said its members were harmed by EPA’s lack of disclosure because it could not identify relevant exemption decisions.

The court said EPA’s shift toward a new interpretation of what refineries qualify for exemptions was not a final agency action, and thus, it doesn’t have jurisdiction to rule in the case.

But it also chastised EPA’s decisionmaking, calling it an “ongoing pattern of genuinely secret law.”

“To be sure,” the court said, “the EPA’s briefing and oral argument paint a troubling picture of intentionally shrouded and hidden agency law that could have left those aggrieved by the agency’s actions without a viable avenue for judicial review.”

Since the lawsuit was filed, EPA has published a “dashboard” on its website with basic facts about the exemptions. And in August 2019, it formally announced its new decisionmaking process.