The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

By Lauren M. Graham, Ph.D.

On August 31, 2017, the U.S. Environmental Protection Agency (EPA) announced that requirements for reformulated gasoline and low volatility gasoline would be waived through September 15, 2017, for Alabama, Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, Texas, Louisiana, and the District of Columbia.  EPA exercised its emergency fuel waiver authority to help ensure an adequate supply of fuel throughout the South, Southeast, and the Mid-Atlantic in the wake of Hurricane Harvey.  As required by law, EPA and the Department of Energy (DOE) evaluated the impacts of Hurricane Harvey on refineries in the Gulf Coast based on strict criteria provided in the Clean Air Act (CAA) and determined that granting a short-term waiver was consistent with the public interest.  The CAA requires that waivers be limited as much as possible in terms of their geographic scope and duration.  EPA and DOE continue to monitor the fuel supply situation and will act if it is determined that extreme and unusual supply circumstances exist in other areas.


 

By Lauren M. Graham, Ph.D.

On August 15, 2017, the U.S. Court of Appeals for the Tenth Circuit ruled two to one that the U.S. Environmental Protection Agency (EPA) exceeded its statutory authority under the Clean Air Act (CAA) when it denied Sinclair Oil Corporation’s request for a hardship exemption from the Renewable Fuel Standard (RFS) program.  The statute requires that EPA grant exemptions on a case-by-case basis to small refiners that would suffer a “disproportionate economic hardship” in complying with the RFS program.  According to the court ruling, EPA’s interpretation that there needed to be a threat to the refinery’s survival as an ongoing operation to be eligible for the exemption is outside the range of permissible interpretations of the statute and, therefore, inconsistent with Congress’s statutory mandate.  To support its ruling, the court cited the U.S. Department of Energy’s (DOE) matrix analysis that lists three viability metrics that determine hardships, including reduced profitability, temporary negative events, and risk of closure.  As a result of the ruling, EPA will have to reconsider Sinclair’s request for an exemption.
 
Justice Lucero respectfully dissented, stating that the majority decision did not consider EPA’s lengthy discussion, which demonstrates that the Agency considered all of the viability factors.


 

By Lauren M. Graham, Ph.D.

Renewable Industries Canada (RICanada), a principal stakeholder representing Canadian producers of clean-burning renewable fuels, announced that the Quebec Government’s 2017-2020 Action Plan under the 2030 Energy Policy included, for the first time, renewable fuel volume requirements for fuels such as ethanol and biodiesel.  The renewable fuel blending requirement was set at 5% for gasoline and 2% diesel and is expected to increase after 2020.  RICanada stated that the “announcement on renewable transportation fuels further entrenches Quebec’s position as a leader in the production of renewable energy and in the broader battle against climate change” and that its “members look forward to helping the Government of Quebec ensure that the province’s GHG targets in the transportation sector are achieved.”  More information on the Action Plan for Energy Policy 2030 is available on the Minister of Energy and Natural Resources website.


 

On November 23, 2016, EPA Administrator, Gina McCarthy, signed the final rule on the RFS volume standards for 2017 and biobased diesel standards for 2018. This final rule will increase the renewable fuel volume requirements as reported in the Biobased and Renewable Products Advocacy Group (BRAG®) post “EPA Releases Proposed Renewable Fuel Volume Requirements.”  The proposed volume requirements are:  


 
Cellulosic biofuel, from 230 million gallons in 2016 to 311 million gallons in 2017;  
 

 
Advanced biofuel, from 3.61 billion gallons in 2016 to 4.28 billion gallons in 2017;
 

 
Renewable fuel, from 18.11 billion gallons in 2016 to 19.28 billion gallons in 2017; and
 
Biomass-based diesel, from 2 billion gallons in 2017 to 2.1 billion gallons in 2018.
 
These volumes change the percentage standards to 0.173 percent for cellulosic biofuel, 2.38 percent for advanced biofuel, 10.70 percent for renewable fuel, and 1.67 percent for biomass-based diesel.  The final rule is expected to be published in the Federal Register during December 2016.

 

On June 2, 2015, federal appellate judges decided that EPA's methodology for evaluating small refineries (those with crude oil throughput averaging 75,000 barrels or less per day) for exemptions from the RFS program was fair. Hermes Consol. LLC v. EPA, No. 14-1016 (D.C. Cir. June 2, 2015). Under the Clean Air Act (CAA), EPA is allowed to exempt small refiners from the annual blending requirements if compliance would cause ''disproportionate economic hardship." There was a blanket exemption available for all small refineries in 2011 that expired in 2013. The case was brought by Hermes Consolidated, LLC, doing business as Wyoming Refining Company, a small refinery that applied for exemption from the 2013 renewable fuel blending requirements but was denied after EPA made mathematical errors while evaluating financial hardship. The court has ordered EPA to reconsider the petition from Hermes Consolidated, LLC, but has upheld EPA's overall methodology for conducting small refinery exception analyses.