Environmental Protection Agency chief Scott Pruitt was sued by a renewable fuel trade group on Tuesday for exempting dozens of oil refineries outside the public eye from having to abide by the Renewable Fuel Standard’s ethanol mandate.
The Advanced Biofuel Association is the first biofuel group to sue Pruitt in the D.C. Circuit Court of Appeals over the exemption process after weeks of warnings by the ethanol industry, other biofuel groups, and both Republican and Democratic members of Congress who say what Pruitt is doing is illegal.
Mike McAdams, the president and CEO of the group, said his members are “concerned that Administrator Pruitt is granting these exemptions in an arbitrary and capricious manner to undisclosed parties behind closed doors with no accountability for its decision-making process.”
The Advanced Biofuels Association wants the D.C. Circuit Court to decide whether EPA violated the law by granting a higher number of small refinery exemptions.
The lawsuit comes one day after EPA granted a refinery owned by Carl Icahn, former adviser to President Trump, an ethanol waiver.
A number of other groups have threatened litigation over the exemption, which the ethanol industry says has changed the annual requirements for blending ethanol and other biofuels into the nation’s fuel supply.
Changing the refinery obligations by granting small refinery hardship waivers without public comment is illegal, according to ethanol proponents. They also argue that many of the refiners being granted waivers under the RFS do not fit the definition of a small refinery. They are simply too large.
Andeavor, the fifth-largest refinery in the nation, was one of the first companies to be granted a waiver for a group of its smaller refineries. That was last month.
On Monday, the oil company Marathon revealed that it has entered talks with Andeavor to buy it — a proposed merger that would create the largest refining company in the country.
Proponents of the waivers say EPA is moving ahead with the exemptions based on a lawsuit it lost that gave the agency more discretion on granting hardship waivers. But renewable fuel groups don’t buy the rationale.
“First, this ‘hands are tied’ argument is baloney,” said a renewable fuel industry source. “The decision gave EPA more discretion to interpret hardship as something less strenuous than going out of business, but did not tie EPA’s hands into accepting any obligation as hardship”
The source argues that if Congress wanted EPA to grant “blanket” exemptions to anyone it would have. “They didn’t.”
Meanwhile, Sen. Ed Markey, D-Mass., petitioned the Federal Trade Commission and the Justice Department to review the $23 billion proposed merger between Marathon and Andeavor for fear it would create a monopoly.
“I am concerned that the consolidation of two major refiners into a single entity that would control one-sixth of U.S. refining has the potential to limit competition and potentially expose American consumers to higher prices for gasoline and other domestically refined petroleum products,” Markey wrote in a letter to FTC acting Chairwoman Maureen Ohlhausen and Assistant Attorney General Makan Delrahim.
The merger give Marathon nearly 16 percent of the nation’s refining capacity, Markey’s office explained.
“Under existing law, the FTC and DOJ can determine whether proposed mergers like this would lessen competition or create a monopoly,” Markey said.
