D.C. Circuit grapples with RFS exemptions

Source: By Pamela King, E&E News reporter • Posted: Sunday, October 27, 2019

Federal judges Friday struggled to find a foothold in a dispute over EPA’s methodology for deciding which small refiners can get a break from the federal renewable fuel standard.

The U.S. Court of Appeals for the District of Columbia Circuit grilled the agency and its challengers on whether EPA’s looser approach to determining which facilities would suffer “disproportionate economic hardship” from requirements to either blend ethanol into fuel or purchase renewable fuel credits is a final agency action that the court can review.

“It’s hard for me to see where we have jurisdiction,” Senior Judge David Sentelle said to an attorney for a biofuels group during oral arguments in Advanced Biofuels Association v. EPA.

Rafe Petersen, a partner at the law firm Holland & Knight LLP, said the challengers were “at a little bit of a disadvantage” because EPA carried out its policy shift under a “veil of secrecy.”

He said EPA has not responded to Freedom of Information Act requests seeking agency documents on which the biofuels group can more securely pin its legal challenge.

Judge Patricia Millett grilled the agency’s lawyer on that point.

The plaintiff’s “ox is getting gored” by EPA’s new approach, she said, but the biofuels group has no public documents to cite as evidence of the agency violating the Administrative Procedure Act (APA), which governs agency rulemaking.

“What are they supposed to do?” Millett asked Justice Department attorney Jessica O’Donnell.

O’Donnell argued that the agency is bound by confidentiality requirements around refineries’ applications for hardship exemptions that may contain sensitive business information.

“How do [challengers] bring that APA lawsuit?” Millett asked. “Or is your position that there can be no APA lawsuit?”

The judges expressed concern that a decision in favor of challengers would be interpreted to apply to EPA adjudications on individual refiners’ petitions for exemptions.

Those decisions are “regional on their face,” said Sidley Austin LLP partner Ryan Morris, who represented HollyFrontier Refining & Marketing LLC, which intervened in defense of EPA’s position in the case.

Judge Gregory Katsas, a Trump appointee, also sat on the panel. Sentelle and Millett are Reagan and Obama picks, respectively.