From staff reports WASHINGTON –The U.S. Supreme Court issued a ruling last week regarding the Environmental Protection Agency, in a case on appeal by an Oklahoma oil refining company and others that challenged a small-refinery decision of the federal agency.
The Supreme Court ruled the Fifth U.S Circuit Court of Appeals was wrong to have not referred the challenge of the Wynnewood Refining Company and five other refinery operators to the D.C. Circuit Court of Appeals.
The Justices concluded the EPA’s denial of small refinery exemption petitions under the Clean Air Act’s (CAA) renewable fuel program had national application and not just regional impact. The Fifth Circuit Court held otherwise, and instead of passing the case along to the D.C. Circuit it held on to the challenge.
Other firms that challenged the EPA over its enforcement of the Clean Air Act and denials of small refinery exemptions for the production of biofuels were Calumet Shreveport Refining, Placid Refining Company, Ergon Refining Inc., Ergon-West Virginia and San Antonio Refinery.
The case involves the EPA and its denial of small refinery exemption petitions under the Clean Air Act’s renewable fuel program.
The CAA requires most domestic refineries to blend renewable fuels into transportation fuels, with a phased exemption scheme for small refineries. Following a Supreme Court decision in HollyFrontier Cheyenne Refining v. Renewable Fuels Assn., the EPA reconsidered and ultimately denied 105 exemption petitions in 2022, based on its interpretation of “disproportionate economic hardship” and an economic theory that Renewable Identification Number (RIN) costs are passed through to consumers.
The small refineries challenged these denials in multiple regional Circuits courts. Most Circuits either dismissed the challenges for improper venue or transferred them to the D.C. Circuit. However, the Fifth Circuit retained jurisdiction, ruling that the EPA’s actions were locally applicable and not based on determinations of nationwide scope or effect, as the EPA still examined refinery-specific facts before issuing denials.
The Supreme Court of the United States reviewed the case and held that the EPA’s denials of small refinery exemption petitions are locally or regionally applicable actions that fall within the “nationwide scope or effect” exception, requiring venue in the D.C. Circuit.
The nation’s high court concluded that the EPA’s interpretation of “disproportionate economic hardship” and its RIN passthrough theory were determinations of nationwide scope or effect that formed the core basis for the denials. Therefore, the Fifth Circuit erred in retaining jurisdiction, and the case was vacated and remanded for further proceedings consistent with that opinion.