Industry group questions refinery’s legal standing to challenge RFS rule

Source: Amanda Peterka, E&E reporter • Posted: Tuesday, June 24, 2014

The National Biodiesel Board has asked a federal court to review whether a Pennsylvania refinery owned by Delta Air Lines LLC has legal standing to challenge U.S. EPA over last year’s biofuel requirements.

The refinery, Monroe Energy LLC, has not shown that throwing out EPA’s rule that set the standards would give the company relief from high compliance costs, the National Biodiesel Board said in a legal petition filed Friday.

The biodiesel trade group has asked the U.S. Court of Appeals for the District of Columbia Circuit to hold a rehearing in the case.

The D.C. appeals court has already denied Monroe’s claims in the lawsuit, but NBB said in a statement that the rehearing is needed to uphold the integrity of the renewable fuel standard, the policy through which EPA sets yearly requirements for refiners to use ethanol and advanced biofuels.

“We know what obligated parties challenge EPA’s annual standards every year. While almost all of those challenges have been rejected, they consume substantial public and private resources and create uncertainty and frustrate Congress’s goals,” the board said in a statement today. “In order to cut down on these increasingly wasteful challenges, NBB believes that the courts should be more vigilant about applying the rules that govern who can bring lawsuits.”

In its challenge to the rule, which the appeals court denied last month, Monroe argued that EPA’s targets imposed disproportionate burdens on merchant refiners like itself that do not blend their own ethanol and must meet their RFS obligations solely by purchasing credits known as Renewable Identification Numbers (RINs). Monroe argued that other refineries hoarded credits during 2013, driving up its compliance costs.

The National Biodiesel Board said in its Friday petition that the refinery failed to prove that changing the rule would resolve those issues. Monroe did not show how third parties would change their behavior if the court vacated the rule and instead relied on speculation about their reactions, NBB said.

The court should have dismissed the refinery’s petition outright, the group said.

“Speculation is insufficient to establish standing, particularly speculation about the behavior of participants in a market,” the court filing said.