Several state attorneys general – led by Iowa’s – are siding with the renewable fuels industry in a case headed to the U.S. Supreme Court later this month.
Iowa Attorney General Tom Miller is joined by attorneys general from Nebraska and six other states in filing an amicus brief in the case HollyFrontier Cheyenne Refining, LLC, et al. v. Renewable Fuels Association, et al. They’re encouraging the U.S. Supreme Court to back a federal appellate court’s finding from January 2020. The Tenth Circuit Court of Appeals ruled the U.S. Environmental Protection Agency overstepped its authority in granting three waivers to oil refiners that excuse them from blending renewable fuels into their gasoline. The oil industry appealed the ruling, so the case heads to the Supreme Court. The case will decide whether the EPA had the authority to grant these exemptions to the Renewable Fuel Standard.
“The EPA’s practice of freely granting exemptions to the oil industry has undermined the promise of renewable fuels and harmed Iowa’s farmers and biofuels industries,” said Miller in a statement.
The brief asserts the renewable fuels and agricultural industries are the “cornerstone” of Iowa, Nebraska and many other state’s economies. “These industries—and the rural economies that they anchor—have grown over the past 16 years in reliance on the promise of the Renewable Fuel Standard (“RFS”),” the brief says. “And all States have an interest in the environmental benefits and energy independence that the RFS promises to achieve.”
The Renewable Fuel Standard was created by Congress in 2005 and expanded in 2007. Under this program, billions of gallons of renewable fuels, including ethanol, need to be blended into transportation fuel each year. Small refineries were allowed to seek a temporary exemption from these obligations to blend renewable fuels into their gasoline and they could apply to extend the exemption if they could prove disproportionate economic hardships would come from following the RFS.
“It was designed as a short-term transition period that gave small refineries a little more time to comply with the law,” said Monte Shaw, the executive director of the Iowa Renewable Fuels Association in an interview with IPR. “It was never envisioned to be a long-term ‘get out of jail free card.' It was never envisioned to be an on again off again system.”
Shaw said once a refiner’s exemption ends, they’re supposed to no longer be eligible to request an extension because there is no exemption to extend. He compared it to tax season. “If you don't get an extension to file your taxes, you can't come back several months later and ask to extend it even further, because you never had an extension in the first place,” Shaw said.
President Donald Trump’s EPA granted 88 small refinery waivers between 2016 and 2020. Hours before President Joe Biden took office in January, the EPA tried to grant three more, but the U.S. Court of Appeals for the D.C. Circuit halted them. A month after Biden took office, the EPA announced it supported the appellate court’s 2020 ruling that it overstepped in its authority in granting three waivers to oil refiners.
According to the amicus brief, Iowa’s renewable fuels industry has more than 37,000 jobs and generates $1.8 billion of income for Iowa households. The attorneys general argue that lowering demand for renewable fuels would “cause substantial economic harm” for rural economies.
“As of October 2019—and before any impact from the current pandemic—19 ethanol plants had closed across the nation,” the brief says. “…And because the renewable fuel industry anchors many rural economies, undercutting that industry harms local farmers, retailers, and other service providers.”
Shaw says his takeaway from the brief is they’re simply asking the Supreme Court to uphold the Renewable Fuel Standard.
“The process is laid out,” Shaw said. “These exemptions were supposed to be for a short period of time to help people transition into the RFS. And that was 13 years ago.”
The case will be argued in front of the Supreme Court on April 27.
