Late last week, Reuters writers Andrew Chung and Stephanie Kelly reported that, “The U.S. Supreme Court on Friday made it easier for small oil refineries to win exemptions from a federal law requiring increasing levels of ethanol and other renewable fuels to be blended into their products, a major setback for biofuel producers.
“The justices overturned a lower court decision that had faulted the U.S. Environmental Protection Agency for giving refineries in Wyoming, Utah and Oklahoma extensions on waivers from renewable fuel standard (RFS) requirements under a law called the Clean Air Act even though the companies’ prior exemptions had expired.”
The Reuters article noted that, “The 6-3 ruling, authored by conservative Justice Neil Gorsuch, compared these extensions to ones granted in everyday life such as to a student wanting more time to complete a term paper even though the deadline has passed or a business contract whose term had expired.
From tourists seeking a longer hotel stay to forgetful students wanting extra time on a term paper, Supreme Court justices leaned on hypotheticals in interpreting a law allowing an “extension” of refinery exemptions from the federal biofuel mandate. pic.twitter.com/sX8jFhQRgb
— Jennifer A. Dlouhy (@jendlouhyhc) June 25, 2021
“‘It is entirely natural – and consistent with ordinary usage – to seek an ‘extension‘ of time even after some time lapse,’ Gorsuch said.
“In a dissent, conservative Justice Amy Coney Barrett, joined by liberal justices Sonia Sotomayor and Elena Kagan, faulted the ruling’s interpretation of the word ‘extend.’ The ‘EPA cannot ‘extend’ an exemption that a refinery no longer has,’ Barrett wrote.”
I disagree w the Supreme Courts ruling this morning on small refineries & agree w Justice Barrett’s dissent Small refineries exemptions are simply handouts to Big Oil I will continue to work on having a strong RFS for biofuel producers & Iowa farmers
— ChuckGrassley (@ChuckGrassley) June 25, 2021
“President Joe Biden’s administration has been considering ways to provide relief to U.S. oil refiners from biofuel blending mandates,” the Reuters article said.
The Reuters writers explained that,
At issue in the case was whether the EPA impermissibly exempted units of HollyFrontier and CVR Energy in 2017 and 2018 when they had not received continuous prior extensions of an initial exemption.
“The Denver-based 10th U.S. Circuit Court of Appeals last year found that the EPA had exceeded its authority ‘because there was nothing for the agency to ‘extend.’”
In unfortunate news for biofuels producers and farmers, SCOTUS overturned the 10th Cir. Ruling on Small Refinery Exemptions. Rest assured, I will continue to fight for farmers and biofuels producers. https://t.co/jD4xnuhqem
— Dr. Roger Marshall (@RogerMarshallMD) June 25, 2021
Also last week, Bloomberg writer Jennifer A. Dlouhy reported that, “The EPA has wide latitude to exempt refineries from federal mandates that they mix renewable fuels into gasoline and diesel, the U.S. Supreme Court ruled Friday, a victory for oil companies seeking a break from the requirements.
“In a 6-3 decision, the justices rejected arguments that the Environmental Protection Agency’s exemption power is limited to only a handful of refineries that have received uninterrupted annual waivers from the Renewable Fuel Standard.
While I am disappointed in today’s Supreme Court ruling, I will keep fighting to uphold the RFS for #NE03 biofuels producers. My statement with my fellow Biofuels Caucus co-chairs: https://t.co/2TmCGsy9U6
— Rep. Adrian Smith (@RepAdrianSmith) June 25, 2021
“Writing for the majority, Justice Neil Gorsuch said that nothing in the Renewable Fuel Standard law itself ‘commands a continuity requirement.’”
Ms. Dlouhy explained that,
The case turned on the justices’ interpretation of just a few words in the Renewable Fuel Standard law — specifically its provision allowing a small refinery to petition the EPA ‘at any time’ for an ‘extension’ of its initial, automatic exemption.
“Biofuel producers unsuccessfully argued the law’s use of the word ‘extension’ inherently meant refineries can only qualify if they have an existing exemption to prolong.”
DTN writer Todd Neeley reported last week that, “As of Friday, 70 additional exemption petitions remain pending with EPA for compliance years 2011 to 2020. Without knowing specifically how many gallons are involved, staff at the Renewable Fuels Association estimated it would likely fall somewhere in the range of about 3.1 billion to 3.3. billion gallons of biofuels that could be affected if EPA were to grant all those petitions.”
10th circuit decision still put tight guardrails around the use of SREs which the Supreme Court did not overturn & I expect the Biden admin to keep their campaign promises to support biofuels EPA is on record that RINS DO NOT impose costs on refineries
— ChuckGrassley (@ChuckGrassley) June 25, 2021
THREAD: I’m deeply disappointed in today’s Supreme Court ruling against our family farmers and biofuels producers – who are still fighting to recover from volatile markets, unpredictable weather, and trade instability of the past several years. (1/4) https://t.co/szJ0B1y3tR
— Rep. Cindy Axne (@RepCindyAxne) June 25, 2021
Dow Jones writer Kirk Maltais reported last week that, “Corn for December delivery fell 3.1% to $5.19 1/4 a bushel, on the Chicago Board of Trade Friday, in response to weather models showing strong rainfall in many growing areas, as well as the Supreme Court siding with the EPA on the issue of biofuel waivers.”
2. Guess I have to wade back into the argument about the impact of SREs on ethanol demand. My argument is that SREs had very little impact on ethanol demand because ethanol is generally competitive in E10 blends on its own due to its octane content.
— Scott Irwin (@ScottIrwinUI) June 25, 2021
The Dow Jones article stated that, “The U.S. Supreme Court has ruled in favor of small oil refineries in the biofuel waiver dispute–which pressured corn futures Friday. In its opinion headed by Justice Neil Gorsuch, the court ruled that providing waivers for small oil refineries not to have to blend the required levels of ethanol into their gasoline output did not exceed the EPA’s authority.”