Ethanol Blog

While ethanol industry groups celebrated a federal court's decision not to allow a rehearing of a small-refinery exemptions case, that decision left small refineries in a tough legal spot.

Ethanol groups immediately called on the EPA to apply the decision nationally, which would be expected to significantly reduce the number of exemptions to the Renewable Fuels Association granted by the agency.

The Fueling American Jobs Coalition, which includes a number of refining interests, said on Wednesday it is exploring a possible appeal to the United States Supreme Court. Refiners have 90 days to file such an appeal.

LeAnn Koch Johnson, an attorney representing refining interests, said in a statement the refiners knew their chances were small of receiving a full hearing before the U.S. Court of Appeals for the 10th Circuit in Denver.

"But the larger point is this," she said, "the refining sector is in a precarious position given the current global health emergency that has suppressed demand for motor fuels. Now is the wrong time for agri-business interests and their speculator colleagues to play games with RINs (Renewable Identification Numbers) prices.

"The administration recently declared refineries to be essential infrastructure, and it has the legal ability to address RFS compliance costs. The president has long recognized the importance of refining assets and the industrial workers that operate them in states like Pennsylvania, Texas, and elsewhere. The administration must act to protect these assets as it has continually promised to do."

Johnson said the consequences for small refineries will be "dire" as refiners already are losing money.

"Destroying small refineries to advance the 'ethanol first' agenda of certain senators will not increase ethanol blending it will simply shift production to big oil and foreign imports," she said.

"We must remember to hold Sens. (Charles) Grassley and (Joni) Ernst (Iowa Republicans) accountable for the irreparable harm to the employees and rural communities in which small refineries operate."

American Coalition for Ethanol Chief Executive Officer Brian Jennings said in a statement on Tuesday the ethanol industry is sustaining damage from COVID-19 market effects.

Ethanol plants across the country are shutting down or idling operations because of severe market challenges from falling gasoline demand during the response to COVID-19.

"Now, we fully expect EPA to comply with the law and end its mismanagement of the RFS," he said.

"The economic fall-out of COVID-19 is causing substantial damage to the ethanol industry, and in this world filled with so much uncertainty, EPA can provide some much-needed certainty to the RFS by applying the 10th Circuit Court precedent nationwide."

Jennings said he expects the EPA to deny most of the currently pending 25 small-refinery exemption requests for the 2019 compliance year.

Renewable Fuels Association President and Chief Executive Officer Geoff Cooper said the EPA now has all the information it needs to make changes to the program.

"It's time for EPA to immediately implement the 10th Circuit decision nationwide, starting with the pending 2019 petitions," he said. "There are no excuses left for further delaying implementation of this important decision that helps restore integrity to the Renewable Fuel Standard."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

(TN)

Copyright 2020 DTN/The Progressive Farmer. All rights reserved.