Oil and Gas Refineries After 2010 Need To Take the Form of an Extension

The decision by the U.S. court to strike down the three biofuel exemptions granted by the Environmental Protection Agency (EPA) to oil refineries in 2017 casts doubt on the validity of hundreds of other EPA waivers given under similar conditions.This implies confusion for a number of independent refiners who have been granted lucrative exemptions from the Trump administration and could raise prices for biofuel blending credits that these facilities need to comply with the biofuel laws of the country.

The U.S. Renewable Fuel Standard requires oil refineries to mix billions of gallons of biofuels such as ethanol. Unless they demonstrate enforcement, the EPA must relinquish any obligations which could cause them financial distress. A near quadrupling of exemptions granted by Trump's administration has enraged the biofuel industry, claiming that demand for ethanol based on corn has been slashed.The oil industry claims that, exemptions are needed to protect employment in refining and says the waivers do not impact the actual use of ethanol. The EPA clearly violated its authority to issue the exemptions because, according to the court's decision, the refineries had not earned waivers in the prior year. The court also said that the RFS is written in such a way that any exception given to a small refinery after 2010 would need to take the form of an "extension."