EPA defends RFS levels: ‘The sky has not fallen’

Source: By Ellen M. Gilmer, E&E News reporter • Posted: Thursday, February 21, 2019

Federal judges heard more than two hours of arguments today in the latest showdown over EPA’s renewable fuel standard.

At the center of today’s fight: the agency’s renewable fuel blending requirements for 2018.

Ethanol backers say EPA’s levels are too low, especially in light of waivers the agency has granted to small refineries seeking to avoid the requirements. Refiners, meanwhile, maintain the RFS requirements are far too costly, pushing some refineries out of business.

It’s a tug of war that has dogged EPA’s RFS program since its inception, prompting repeated battles about the workability of annual requirements.

The 2018 rule was particularly contentious for what refiners called an agency “U-turn” after EPA considered using broad authority it has to waive RFS-mandated blending requirements if they would severely harm the economy in a state, region or nationwide, or if there isn’t enough domestic supply to meet the targets.

Two states and numerous refining industry parties asked EPA to use that authority.

“In the final rule, however, EPA completely reversed course,” Crowell & Moring LLP attorney Tom Lorenzen, representing American Fuel & Petrochemical Manufacturers and others, told the court today.

The agency ultimately set levels for cellulosic biofuel and total renewable fuel higher than it originally proposed.

Arguing before the U.S. Court of Appeals for the District of Columbia Circuit, Lorenzen maintained EPA could not justify its decision and failed to properly analyze whether there would be adequate domestic supply to meet the 2018 obligations.

Refiners and others who think EPA’s levels are too high say the agency’s methodology for calculating renewable fuel supply is flawed and doesn’t follow the plain language of the RFS law.

Judge David Tatel appeared skeptical of that claim. “Assume I don’t think the statute’s as clear as you do,” he said, pushing the challengers to explain how the statute supports their arguments.

Yestyerday’s arguments lasted 2 ½ hours and touched on legal views from various sides.

EPA steadfastly defended its rule, arguing that refiners exaggerated claims that the requirements would cause severe economic harm.

“Simply put, the sky has not fallen,” Justice Department lawyer Benjamin Carlisle told the court.

EPA also attempted to fend off criticism from the National Biodiesel Board that the agency’s requirements are too weak because they don’t account for the number of waivers it grants to small refineries, and arguments from environmentalists who say the agency failed to consult on the policy’s impacts on endangered species.

Judges Karen Henderson and Thomas Griffith were also on the panel for today’s case, though Griffith was not present for arguments.