Supreme Court rules in favor of oil refineries in blending waiver dispute

The Supreme Court in a Friday decision upheld waivers granted to three oil refineries that exempted them from requirements to blend biofuels into their products. 

In its 6-3 ruling, the court reversed a 10th Circuit decision that vacated hardship waivers granted by the Environmental Protection Agency (EPA) and determined that the refineries were not eligible for an “extension” after going for some time without one.

But, in an opinion penned by Justice Neil Gorsuch, the majority argued that the word “extension” didn’t necessarily imply continuity, so the waivers could stand despite the lapse from the refineries that had previously held one. 

“It is entirely natural — and consistent with ordinary usage — to seek an ‘extension’ of time even after some lapse,” Gorsuch wrote.  

“Think of the forgetful student who asks for an ‘extension’ for a term paper after the deadline has passed, the tenant who does the same after overstaying his lease, or parties who negotiate an ‘extension’ of a contract after its expiration,” he added. 

Justice Amy Coney Barrett wrote the dissenting opinion, arguing that the EPA can’t “extend” an exemption that a refinery doesn’t have anymore and that the majority opinion uses an “outlier” meaning of the word that’s not consistent with its other uses in the statute. 

Barrett also wrote that examples cited by the majority “confuse the time at which one may permissibly request an extension with what is being extended.”

“It may be that the tenant could request an ‘extension’ of the year-one lease at some point after the start of year two. But, if approved, the tenant’s lease would still be continuous — running from year one to year two — and the tenant would no doubt owe rent for the intervening period,” she wrote. 

Prior to the court’s decision, the Biden administration had expressed support for the now-struck-down interpretation that the waivers were not valid, meaning that it may still seek to limit the number of waivers that it issues. 

After the decision, a coalition representing biofuel producers released a statement expressing disappointment in the decision but optimism about how the Biden administration would handle waivers. 

“While we are extremely disappointed in this unfortunate decision from the Supreme Court, we will not stop fighting for America’s farmers and renewable fuel producers,” the coalition said. 

“We are optimistic that other elements of the Tenth Circuit decision, which were not reviewed by the Supreme Court, will compel the Biden administration and EPA’s new leadership to take a far more judicious and responsible approach to the refinery exemption program than their predecessors did,” it continued.

The issue has divided Republicans, as those who represent states where oil refining is a big industry have supported the exemptions, while others from farm-heavy states have backed the biofuels producers. 

Sen. John Barrasso (R-Wyo.) celebrated the ruling in a statement and called on the Biden administration to grant waivers.

“The Supreme Court has upheld the law by defending hardship relief for small refineries under the Renewable Fuel Standard,” he said. “President Biden should immediately grant hardship relief to small refineries for 2019 and 2020.”

Updated: 1:23 p.m.