Hunt Refining Company v. U.S. Environmental Protection Agency

CourtCourt of Appeals for the Eleventh Circuit
DecidedJanuary 11, 2024
Docket22-12535
StatusPublished

This text of Hunt Refining Company v. U.S. Environmental Protection Agency (Hunt Refining Company v. U.S. Environmental Protection Agency) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hunt Refining Company v. U.S. Environmental Protection Agency, (11th Cir. 2024).

Opinion

USCA11 Case: 22-11617 Document: 118-1 Date Filed: 01/11/2024 Page: 1 of 17

[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

____________________

No. 22-11617 ____________________

HUNT REFINING COMPANY, Petitioner, versus U.S. ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

Petitions for Review of a Decision of the Environmental Protection Agency Agency No. EPA-420-R-22-005 ____________________ USCA11 Case: 22-11617 Document: 118-1 Date Filed: 01/11/2024 Page: 2 of 17

2 Opinion of the Court 22-11617

No. 22-12535 ____________________

HUNT REFINING COMPANY, Petitioner, versus U.S. ENVIRONMENTAL PROTECTION AGENCY,

Petitions for Review of a Decision of the Environmental Protection Agency Agency No. EPA-420-R-011 ____________________

Before JORDAN, LAGOA, and ED CARNES, Circuit Judges. ED CARNES, Circuit Judge: The Clean Air Act’s Renewable Fuel Standard (RFS) pro- gram requires most domestic oil refineries to blend a certain amount of renewable fuels into the transportation fuels they pro- duce each year. See 42 U.S.C. § 7545(o)(2). The program allows small refineries to petition the Environmental Protection Agency USCA11 Case: 22-11617 Document: 118-1 Date Filed: 01/11/2024 Page: 3 of 17

22-11617 Opinion of the Court 3

for an exemption from those blending requirements in cases where compliance would cause the refineries “disproportionate economic hardship.” Id. § 7545(o)(9)(B). The EPA denied Hunt Refining Company’s petitions for hardship exemptions from the RFS program, and Hunt petitioned this Court for review. The EPA has moved to dismiss or transfer venue under the Clean Air Act’s judicial review provision, 42 U.S.C. § 7607(b)(1), contending that Hunt’s petitions should have been filed in the United States Court of Appeals for the District of Columbia. And they should have been. I. In 2005 and 2007, Congress amended the Clean Air Act to establish the RFS program. See Energy Policy Act of 2005, Pub. L. No. 109-58, § 1501, 119 Stat. 594, 1067; Energy Independence and Security Act of 2007, Pub. L. No. 110-140, §§ 201–02, 121 Stat. 1492, 1519–28 (codified at 42 U.S.C. § 7545(o)). The program was part of a larger effort to “increase the production of clean renewable fuels.” Energy Independence and Security Act, preamble, 121 Stat. at 1492. Under the program, all gasoline sold in the United States must contain certain amounts of “renewable fuel, advanced bio- fuel, cellulosic biofuel, [or] biomass-based diesel.” 42 U.S.C. § 7545(o)(2)(A)(i). Congress set the annual volume requirements for those re- newable fuels through 2022 and instructed the EPA to set the vol- ume requirements for years after 2022. Id. § 7545(o)(2)(B)(i)–(ii). It also directed the EPA to promulgate regulations to ensure that the USCA11 Case: 22-11617 Document: 118-1 Date Filed: 01/11/2024 Page: 4 of 17

4 Opinion of the Court 22-11617

gasoline sold in the United States each year contains the required volumes of renewable fuel. Id. § 7545(o)(2)(A)(i), (3)(B). In its im- plementing regulations, the EPA identified oil refineries and im- porters as the parties responsible for complying with the RFS pro- gram. 40 C.F.R. § 80.1406. Concerned that the RFS obligations could unfairly burden small refineries, Congress gave all small refineries an exemption from the RFS program through 2010. 1 42 U.S.C. § 7545(o)(9)(A)(i); see HollyFrontier Cheyenne Refin., LLC v. Renewable Fuels Ass’n, 141 S. Ct. 2172, 2175–76 (2021). It directed the EPA to extend a small re- finery’s exemption for at least two more years if a study by the De- partment of Energy determined that the refinery “would be subject to a disproportionate economic hardship if required to comply” with the RFS program. 42 U.S.C. § 7545(o)(9)(A)(ii); see also 40 C.F.R. § 80.1441(e)(1). And Congress also provided that “[a] small refinery may at any time petition the [EPA] for an extension of the exemption . . . for the reason of disproportionate economic hard- ship.” 42 U.S.C. § 7545(o)(9)(B)(i). Hunt Refining Company operates a small refinery in Tusca- loosa, Alabama. It has applied for a hardship exemption each year since 2011, and until 2018, the EPA had always granted Hunt the requested exemption.

1 A “small refinery” is “a refinery for which the average aggregate daily crude oil throughput for a calendar year . . . does not exceed 75,000 barrels.” 42 U.S.C. § 7545(o)(1)(K); see also 40 C.F.R. § 80.1401. USCA11 Case: 22-11617 Document: 118-1 Date Filed: 01/11/2024 Page: 5 of 17

22-11617 Opinion of the Court 5

In 2019 the EPA acted on 36 hardship exemption petitions for RFS compliance year 2018, granting 31 (including Hunt’s) and denying five. Several refineries and a renewable fuel producer pe- titioned the D.C. Circuit for review. See Sinclair Wyo. Refin. Co. v. EPA, No. 19-1196 (D.C. Cir. filed Sept. 20, 2019). At the EPA’s re- quest, the D.C. Circuit remanded the EPA’s decision on the 2018 exemption petitions so that the agency could reconsider the peti- tions in light of intervening decisions from the Tenth Circuit, Re- newable Fuels Ass’n v. EPA, 948 F.3d 1206 (10th Cir. 2020), and from the Supreme Court, HollyFrontier Cheyenne Refin., LLC, 141 S. Ct. 2172 (2021). See Sinclair Wyo. Refin. Co., No. 19-1196 (D.C. Cir. Dec. 8, 2021). In April 2022 the EPA on remand from the D.C. Circuit de- nied all 36 hardship exemption petitions for compliance year 2018, concluding that none of the petitioning refineries had shown dis- proportionate economic hardship caused by compliance with the RFS program. In reaching its decision the EPA applied a revised interpretation of § 7545(o)(9) and a new economic theory that it determined was “applicable to all small refineries no matter the lo- cation or market in which they operate.” In June 2022 the EPA issued a nearly identical decision that denied 69 pending hardship exemption petitions (including Hunt’s petitions for compliance years 2019, 2020, and 2021) for the same reasons. USCA11 Case: 22-11617 Document: 118-1 Date Filed: 01/11/2024 Page: 6 of 17

6 Opinion of the Court 22-11617

Hunt petitioned this Court for review of the EPA’s April and June 2022 decisions denying its petitions. The EPA responded by moving to dismiss or transfer Hunt’s petitions to the D.C. Circuit. II. 42 U.S.C. § 7607(b)(1) is the Clean Air Act’s judicial review provision.

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