Supreme Court Takes Up Oil Refineries’ Appeal Over Renewable Fuels

The U.S. Supreme Court in Washington, on Oct. 7, 2024. Madalina Vasiliu/The Epoch Times

The Supreme Court will hear an appeal about which court has authority over the case of oil refineries seeking an exemption from a renewable fuel mandate.

The justices granted the petition in U.S. Environmental Protection Agency v. Calumet Shreveport Refining without comment on Oct. 21. No justices dissented.

The petition was granted on the same day the nation’s highest court agreed to hear the case of State of Oklahoma v. Environmental Protection Agency, which is also about where an appeal related to the Environmental Protection Agency (EPA) should be heard.

The federal Clean Air Act provides that challenges to “nationally applicable regulations,” along with actions that have “nationwide scope or effect,” must be filed in the U.S. Court of Appeals for the District of Columbia Circuit. At the same time, the law says challenges to an EPA action that are “locally or regionally applicable” may only be filed in a regional federal court of appeals.

The Calumet case is about which federal court of appeals is the proper forum for small oil refineries’ appeals against the EPA’s denial of an exemption from the Clean Air Act’s Renewable Fuel Standard (RFS) program. The EPA argued the case should be heard by the D.C. Circuit Court, but the U.S. Court of Appeals for the Fifth Circuit found in November 2023 that it was the proper forum for the appeal.

In the Oklahoma case, the state is challenging the EPA’s “good neighbor” rule that cracks down on states whose industries are said to be contributing to smog. The dispute also concerns which appeals court should have authority to hear the appeal. In February, the U.S. Court of Appeals for the 10th Circuit agreed with the EPA, finding the case should be heard by the D.C. Circuit.

Separately, the Supreme Court voted 5–4 on June 27 to temporarily put the rule on hold. The court held that the emissions-reduction standards established by a federal plan would probably cause irreversible harm to several of the affected states unless the plan was stayed until it could be reviewed by the D.C. Circuit.

In the Calumet case, the EPA denied 105 applications by oil refineries seeking exemptions from the RFS mandate.

The EPA holds that says the mandate requires that fuel offered for sale in the United States contain a proportion of renewable fuel, which can be made from plant material or organic waste.

The mandate requires fuel refiners and importers to mix renewable fuel with gasoline or diesel fuel or to purchase credits representing the required volume of renewable fuel.

The Clean Air Act allows small refineries that process up to 75,000 barrels per day to apply for an exemption based on “disproportionate economic hardship.” In December 2021, the EPA unveiled a policy under which it would deny all exemption requests from small refineries.

Six of the refineries whose exemptions were denied in 2022 appealed to the Fifth Circuit. The EPA argued the D.C. Circuit Court should be the forum in which the appeals were heard because the cases are of national importance, but the Fifth Circuit disagreed.

The Fifth Circuit found that the denials were “locally or regionally applicable,” not “nationally applicable,” because their “legal effect” was restricted to the refineries that petitioned.

Citing a 2018 D.C. Circuit ruling, U.S. Solicitor General Elizabeth Prelogar said in the petition filed with the Supreme Court on May 20 that the forum provision in the Clean Air Act “reflects a clear congressional preference for ‘uniform judicial review of regulatory issues of national importance.’”

Ruling to the contrary would present “substantial obstacles to the orderly operation of EPA programs.”

The refineries urged the Supreme Court in an Aug. 27 brief to deny the EPA’s petition. The Fifth Circuit’s ruling should be affirmed because it was “correct.”

“EPA has long acknowledged that the denial of a small-refinery hardship petition is a locally applicable action that must be reviewed in the petitioning refinery’s regional circuit,” the brief said.

The Fifth Circuit found that the agency cannot “attempt to manufacture venue in the D.C. Circuit” and “the mere fact that EPA applied the same legal standard to all RFS hardship petitions does not make the actions based on any ‘nationwide’ ‘determination.’”

The Epoch Times reached out for comment from the refineries’ attorneys and the U.S. Department of Justice, which is representing the EPA, but received no replies by publication time.

Oral arguments are expected in the new year.