SCOTUSblog by Emily Hammond Apr 26, 2021
On Tuesday, the Supreme Court will hear oral argument in HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association. The case presents an issue of statutory interpretation involving the Renewable Fuel Standard program — a part of the Clean Air Act that calls for incorporating renewable fuels into transportation fuels. With the meaning of the word “extension” at the core of the dispute, the case promises to yield insights into the justices’ interpretive stances. As clean-energy initiatives are introduced in Congress and considered by federal agencies, observers likely will also watch for whether and how the justices are willing to consider the policy implications of the broader statutory context.
Statutory backgroundTo understand the question presented, some background on the statutory scheme is helpful. The RFS program — which was initially introduced in 2005 and expanded to its current form in 2007 — requires entities importing or producing gasoline and diesel fuel to blend renewable fuels into their transportation fuels. To that end, Congress established annual numerical volumes of renewable fuel, advanced biofuel and cellulosic biofuel that must be blended into transportation fuels; these requirements increase each year. Using the statutory volumes and projections by the Energy Information Administration, the Environmental Protection Agency sets the annual percentage amount that must be met to achieve the statutory volumes. In turn, regulated entities use those percentages to determine their blending obligation.
The statutory scheme establishes a credit-based compliance mechanism using Renewable Identification Numbers. These can represent either actual gallons of renewable fuels that a refiner has blended into its transportation fuels or credits purchased from others on a market established by Congress and implemented by EPA. Still, Congress recognized that compliance might cause economic hardship and included special provisions for small refineries in 42 U.S.C. § 7545 — those whose “average aggregate daily crude oil throughput is 765,000 barrels or less for a calendar year.”
These small-refinery provisions are at the heart of HollyFrontier. First, in subparagraph (A) of Section 7545(o)(9), labeled “Temporary exemption,” the statute provided that small refineries need not comply with the RFS program until 2011. This initial exemption could be extended for at least two additional years for small refineries if the Department of Energy, after conducting a study, found that compliance would cause “disproportionate economic hardship.” Second, in subparagraph (B), labeled “Petitions based on disproportionate economic hardship,” the statute provides that “a small refinery may at any time petition” EPA “for an extension of the exemption under subparagraph (A) for the reason of disproportionate economic hardship.” This finding is to be made in consultation with the Department of Energy and in consideration of “other economic factors.”
The question presented revolves around the meaning of the term “extension” in subpart (B): Can EPA grant an extension to small refineries for which the temporary exemption in subpart (A) had previously expired? Put another way, must small refineries have a continuous, unbroken exemption to be eligible for an extension of the original exemption?
More:
https://www.scotusblog.com/2021/04/a-clash-over-renewable-fuels-hinges-on-the-meaning-of-a-single-word/
