Oil trade groups ask court to place RFS challenges on hold

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, April 16, 2014

Two oil trade groups have asked a federal court to place a hold on their challenges to a U.S. EPA rule that set the amount of renewable fuel that refiners had to use last year.
In a motion filed late Friday, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers said they wanted to hold off on the lawsuit until the agency finishes independently reconsidering the rule. EPA has joined with the oil trade groups on the motion.The motion also asks the court to separate challenges by API and AFPM from a lawsuit brought by Monroe Energy LLC, a small refiner owned by Delta Air Lines Inc. The U.S. Court of Appeals for the District of Columbia Circuit combined all the lawsuits into one case last year (Greenwire, Oct. 16, 2013).EPA in August proposed a 2013 renewable fuel standard that required refiners to blend 16.55 billion ethanol-equivalent gallons of renewable fuel into petroleum gasoline and diesel. Of that total, 13.8 billion gallons was to be conventional ethanol and 2.75 billion gallons was to be of advanced biofuel not made from corn.

API and AFPM challenged the targets last year, arguing that EPA overshot its estimation of how much cellulosic biofuel — an advanced biofuel made from agricultural residue, grasses and other plant materials — would be produced.

The oil trade groups also argued that EPA released its final rule eight months late and had made two changes that caught refiners by surprise: The agency used updated fuel consumption data and granted an exemption to a small refinery. Both actions increased the renewable fuel burden for refiners and came without proper notification, the oil trade groups argued.

The court has already put the cellulosic challenge on hold, as EPA announced earlier this year that it would initiate formal reconsideration proceedings of the cellulosic target.

The move by the oil groups and EPA to also delay the rest of the challenges does not come as a surprise, as an attorney for API hinted last week in front of the D.C. Circuit that it would work with EPA on the issue (Greenwire, April 7).

The oil trade groups said they would decide whether to go forward with the court case within 30 days after EPA issues its reconsidered rule.

Monroe, Delta’s refinery, does not oppose the motion. Monroe has challenged EPA’s rule on the grounds that it allegedly caused refiners to breach the “blend wall,” the term for the practical limit to the amount of ethanol that can be blended into gasoline.