Oil refiners to challenge Tenth Circuit Court decision on SREs

By Erin Voegele | March 20, 2020

Wynnewood and HollyFrontier filed a petition with the Tenth Circuit Court of Appeals on March 19 announcing they will seek a rehearing en banc of the court’s Jan. 24 ruling that struck down three small refinery exemptions (SREs) approved by the U.S. EPA.

The court’s Jan. 24 ruling, if implemented nationally, would significantly lower the number of small refineries that are eligible to apply for exemptions to their Renewable Fuel Standard blending requirements. This is because the court ruled that the EPA cannot extend exemptions to any small refineries whose earlier, temporary exemptions had lapsed. The court also found that the EPA abused its discretion in failing to explain how the agency could concluded that a small refinery might suffer a disproportionate economic hardship when the agency has simultaneously consistently maintained that costs for renewable identification numbers (RINs) are passed through and recovered by those same refineries.

The lawsuit challenging the EPA’s approval of the three SREs was filed in May 2018 by the Renewable Fuels Association, American Coalition for Ethanol, National Corn Growers Association, and National Farmers Union.

The original deadline to challenge the court’s SRE ruling was March 9. The U.S. Department of Justice on March 5 filed a motion seeking a 15-day extension of that deadline. The court approved the DOJ’s motion on March 9, extending the deadline to March 24, but said it would not grant any additional extensions of the deadline. Also on March 9, a similar motion was filed by intervenor respondents HollyFrontier Refining & Marketing LLC, HollyFrontier Cheyenne Refining LLC, HollyFrontier Woods Cross Refining LLC, and Wynnewood Refining Co. LLC, also seeking a 15-day extension. The court approved that motion as well, but again noted it will not grant further extensions of the deadline.

With the court filing made March 19, the intervenor respondents have indicated they will ask the full panel of judges on the Tenth Circuit Court of Appeals to reconsider the unanimous decision reached by a panel of three court judges on Jan. 24. As of mid-day on March 20, the DOJ has not filed a petition challenging the court’s decision.

In documents filed with the court March 19, Wynnewood and HollyFrontier said they expect to cite and discuss a limited amount of information that each intervenor-respondent has claimed as confidential business information (CBI). As a result, the parties said they intend to file both public and confidential versions of their respective petitions for rehearing en banc by the March 24 deadline.