Corn growers await the results of big oil and ethanol’s battle
Corn growers are anxiously awaiting a Supreme Court decision on small refinery exemptions under the Renewable Fuel Standard.
The battle over small refinery exemptions hinges on the definition of “extension.” Matthew Morrison, a representative for the Renewable Fuels Association, made the case that EPA’s extensions are intended to be continuous.
“EPA’s authority is therefore limited to prolonging the duration of the exemption under subparagraph A, not creating new ones episodically,” Morrison states. “EPA’s unauthorized carveouts have resulted in billions of dollars of lost revenue to biofuel producers devastating the rural economies anchored by the renewable fuels industry.”
But, Peter Keisler, attorney for Holly Frontier Cheyenne Refiners, argued there is no basis for continuity in the legislation, saying it allows for waivers as needed.
According to Keisler, “As the Department of Energy explained in 2011, some small refineries will face inherent and disproportionate hardships that will only arise or that will increase as those mandates grow. Driving those small refiners out of the markets would undermine the energy independence goals and that’s one of the reasons Congress authorized them to petition at any time based on hardship.”
Morrison pressed back, saying that the mandate itself was not a source of hardship: “All refiners had fifteen years to adjust to the levels that ultimately peak in 2022 and they had time to gradually, giving them all the time to build capacity... Secondly, small refineries had a five-year blanket exemption plus an additional possible two years to invest or adjust.”
The Renewable Fuels Association also argued that refiners can recoup costs by raising fuel prices, but Keisler told the court that is not always an option.
“Many of these refineries are located in geographically remote areas. They depend on pipelines to reach their markets and pipelines don’t take blended fuel because it’s corrosive to pipelines. They don’t own retail gas stations like their larger competitors, they can’t compel gas stations to take their blended fuel and the gas stations often don’t, and they have to sell a larger proportion, than the rest of the industry, of diesel because they are in remote areas,” he adds.
With arguments on the record, the Supreme Court justices will now deliberate on whether to uphold or overturn the 10th Circuit Courts’ previous decision on RFS waiver extension.