[Federal Register Volume 86, Number 237 (Tuesday, December 14, 2021)]
[Proposed Rules]
[Pages 70999-71000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26983]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2021-0566; FRL-9090-01-OAR]
Notice of Opportunity To Comment on Proposed Denial of Petitions
for Small Refinery Exemptions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed denial of petitions.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to deny
all undecided/pending small refinery exemption petitions under the
Renewable Fuel Standard program currently before the agency. EPA is
providing an opportunity for the public to comment on our proposed
denial of these petitions.
DATES: Comments must be received on or before February 7, 2022.
ADDRESSES: Comments. You may send your comments, identified by Docket
ID No. EPA-HQ-OAR-2021-0566, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov
(our preferred method) Follow the online instructions for submitting
comments.
Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2021-0566 in the subject line of the message.
Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Air Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW,
Washington, DC 20460.
Hand Delivery or Courier (by scheduled appointment only):
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution
Avenue NW, Washington, DC 20004. The Docket Center's hours of
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal
Holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to https://www.regulations.gov, including any personal information
provided. For the full EPA public comment policy, information about CBI
or multimedia submissions, and general guidance on making effective
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
Out of an abundance of caution for members of the public and our
staff, the EPA Docket Center and Reading Room are closed to the public,
with limited exceptions, to reduce the risk of transmitting COVID-19.
Our Docket Center staff will continue to provide remote customer
service via email, phone, and webform. We encourage the public to
submit comments via https://www.regulations.gov or email, as there may
be a delay in processing mail and faxes. Hand deliveries and couriers
may be received by scheduled appointment only. For further information
on EPA Docket Center services and the current status, please visit us
online at https://www.epa.gov/dockets.
EPA continues to carefully and continuously monitor information
from the Centers for Disease Control and Prevention (CDC), local area
health departments, and our Federal partners so that we can respond
rapidly as conditions change regarding COVID-19.
[[Page 71000]]
FOR FURTHER INFORMATION CONTACT: Karen Nelson, Office of Transportation
and Air Quality, Compliance Division, Environmental Protection Agency,
2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: 734-214-
4657; email address: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Clean Air Act (CAA) provides that a small refinery \1\ may at
any time petition EPA for an exemption from the obligations of the
Renewable Fuel Standard (RFS) program for the reason of
disproportionate economic hardship (DEH).\2\ In evaluating such
petitions, the EPA Administrator, in consultation with the Secretary of
Energy, will consider the findings of a Department of Energy (DOE)
study and other economic factors.\3\
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\1\ The CAA defines a small refinery as ``a refinery for which
the average aggregate daily crude oil throughput for a calendar year
. . . does not exceed 75,000 barrels.'' CAA section 211(o)(1)(K).
\2\ CAA section 211(o)(9)(B)(i).
\3\ CAA section 211(o)(9)(B)(ii).
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The CAA provided an initial blanket small refinery exemption (SRE)
to all small refineries, exempting them from their RFS obligations
until calendar year 2011.\4\ The CAA includes two additional provisions
regarding extensions of the temporary exemption for the period after
the initial blanket exemption expired. The first statutory mechanism,
applicable to 2011 and 2012, was based on a DOE determination, through
the above-mentioned study, that compliance with the RFS requirements
would impose DEH on a small refinery. If DOE made such a determination,
EPA was required to extend the small refinery's exemption for no less
than two years.\5\ Under the second statutory mechanism, small
refineries are authorized to petition at any time for extensions of the
original statutory exemption for the reason of DEH.\6\ Since 2013, EPA
has shared the incoming petitions and supporting information with DOE,
and DOE has provided EPA with its findings based on a scoring matrix;
however, the ultimate decision of whether to grant or deny a petition
rests with EPA.\7\
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\4\ CAA section 211(o)(9)(A)(i).
\5\ CAA section 211(o)(9)(A)(ii)(II).
\6\ CAA section 211(o)(9)(B)(i).
\7\ More information on the RFS program and the history of SREs,
including how EPA's approach to evaluating SRE petitions has changed
over time, can be found in Section II of the ``Proposed RFS Small
Refinery Exemption Decision,'' available in the docket for this
action.
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II. Proposed Decision
In the Proposed RFS Small Refinery Exemption Decision (hereinafter
``the proposed adjudication,'' available in the docket for this action
(Docket ID No. EPA-HQ-OAR-2021-0566) and on EPA's website at https://www.epa.gov/renewable-fuel-standard-program/proposal-deny-petitions-small-refinery-exemptions), we have conducted an extensive analysis and
review of information provided by small refineries in their SRE
petitions to EPA, finding that all refineries face the same costs to
acquire RINs regardless of whether the RINs are created through the act
of blending renewable fuels or purchased on the open market. This
happens because the market price for these fuels increases to reflect
the cost of the RIN, much as it would increase in response to higher
crude prices. In other words, this increased price for gasoline and
diesel fuel allows obligated parties to recover their RIN costs through
the market price of the fuel they produce. Because the market behaves
this way for all parties subject to the RFS, there is no
disproportionate cost to any party, including small refineries. As a
result, we conclude that small refineries do not face DEH.
Given this conclusion and the other reasons described in the
proposed adjudication, we are proposing to deny all pending SRE
petitions by finding the petitioning refineries do not face DEH caused
by compliance with their RFS obligations. We seek comment on all
aspects of this proposed denial, most notably on our conclusions that
the CAA requires small refineries to demonstrate that DEH is caused by
compliance with the RFS program and our economic analyses concluding
that no small refineries face such disproportionate costs of compliance
due to the RFS program. Specifically, we seek comment on our findings
regarding the absence of a causal relationship between compliance with
the RFS program and DEH experienced by small refineries. We request
additional data that would show the relationship between RFS compliance
costs and the price of transportation fuel blendstocks. We also seek
comment on our proposed change in approach to SRE eligibility based on
receipt of the original statutory exemption, and our decision to deny
all pending/undecided SRE petitions based on the proportional nature of
the RFS requirements and our findings regarding RIN cost passthrough.
We intend to consider these comments before making a final
determination on these pending petitions.
Joseph Goffman,
Principal Deputy Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2021-26983 Filed 12-13-21; 8:45 am]
BILLING CODE 6560-50-P