A federal court slammed the Environmental Protection Agency on Friday for ignoring the high cost of ethanol credits in denying a small family-owned oil refiner’s petition for relief from the agency’s renewable fuel program.
The Fourth Circuit Court of Appeals ruled that EPA’s decision under the Obama administration in 2016 was “arbitrary and capricious,” because it ignored the facts presented to it by the company, Ergon-West Virginia Inc., that showed it was facing hardship in meeting the Renewable Fuel Standard’s requirements to blend ethanol.
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EPA “failed to properly address” the costs incurred by the West Virginia-based refiner regarding the high cost of Renewable Identification Number credits it must buy to comply with the program.
“EPA’s analysis of the effect of RIN prices on Ergon’s refining facility was arbitrary and capricious on this record because the EPA ignored specific evidence suggesting that those prices had a negative effect,” said the court.
The court canceled EPA’s 2016 decision to deny Ergon’s petition for a waiver from the ethanol mandate, ordering the agency to redo its analysis.
The court ruling comes as EPA is under pressure by the ethanol industry and its supporters on Capitol Hill to stop granting “hardship” waivers to refiners. A separate, much larger lawsuit by corn farmers and ethanol producers opposing the 2017 refinery waiver program under the Trump EPA is pending in the D.C. Circuit Court of Appeals.
For refiners, however, Friday’s court decision was seen as a victory for the industry in upholding the refinery-waiver program and reducing the cost of the renewable fuel program on industry.
“I’m very pleased with the 4th Circuit’s decision,” said LeAnn Johnson Koch, counsel for Ergon-West Virginia, Inc. “It’s a reminder to opponents of small refinery hardship that the harm to small refineries is real and that the Clean Air Act requires EPA to relieve it.”
Kris Patrick, president of Ergon, said the ruling “recognizes the significant and disproportionate hardship that RFS places on small refineries.”
