[Federal Register Volume 87, Number 79 (Monday, April 25, 2022)]
[Notices]
[Pages 24300-24301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08686]
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ENVIRONMENTAL PROTECTION AGENCY
[EPA-HQ-OAR-2021-0566; FRL-9711-01-OAR]
April 2022 Denial of Petitions for Small Refinery Exemptions
Under the Renewable Fuel Standard Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Denial of petitions.
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SUMMARY: The Environmental Protection Agency (EPA) is providing notice
of its final action entitled April 2022 Denial of Petitions for RFS
Small Refinery Exemptions (``SRE Denial'') in which EPA denied 36 small
refinery exemption (SRE) petitions under the Renewable Fuel Standard
(RFS) program. EPA is providing this notice for public awareness of and
the basis for EPA's decision issued on April 7, 2022.
DATES: April 25, 2022.
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 extension of the exemption from the
obligations of the 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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II. Decision
In the SRE Denial,\4\ we conducted an extensive analysis and review
of information provided to EPA by small refineries in their SRE
petitions and in the comments submitted in response to the Proposed
Denial.\5\ We sought comment on all aspects of the Proposed Denial,
including on our conclusions that the CAA requires small refineries to
demonstrate that DEH is caused by compliance with the RFS program. We
also sought comment on our economic analyses and conclusion that no
small refineries face disproportionate costs of compliance due to the
RFS program, no economic hardship, and, therefore, no DEH caused by RFS
compliance. We requested additional data that would show the
relationship between RFS compliance costs and the price of
transportation fuel blendstocks. We also sought comment on our proposed
change in approach to SRE eligibility based on receipt of the original
statutory exemption, and our proposed decision to deny all pending SRE
petitions based on the proportional nature of the RFS requirements and
our findings regarding RIN cost passthrough. We considered all the
comments received and have responded to them in the SRE Denial and its
corresponding appendices.
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\4\ ``April 2022 Denial of Petitions for RFS Small Refinery
Exemptions,'' EPA-420-R-22-005, April 2022.
\5\ ``Proposed RFS Small Refinery Exemption Decision,'' EPA-420-
D-21-001, December 2021 (hereinafter the ``Proposed Denial''). 86 FR
70999 (December 14, 2021).
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In the SRE Denial, we find 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 are 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 program, there is
no disproportionate cost to any party, including small refineries, and
no hardship given that the costs are recovered. As a result, we
conclude that small refineries do not face DEH. Given this conclusion
and the other reasons described in the SRE Denial, we have denied 36
SRE petitions by finding the petitioning refineries do not face DEH
caused by compliance with their RFS obligations.
III. Judicial Review
Section 307(b)(1) of the CAA governs judicial review of final
actions by the EPA. This section provides, in part, that petitions for
review must be filed in the United States Court of Appeals for the
District of Columbia Circuit: (i) When the agency action consists of
``nationally applicable . . . final actions taken by the
Administrator,'' or (ii) when such action is locally or regionally
applicable, but ``such action is based on a determination of nationwide
scope or effect and if in taking such action the Administrator finds
and publishes that such action is based on such a determination.'' For
locally or regionally applicable final actions, the CAA reserves to the
EPA complete discretion whether to invoke the exception in (ii)
described in the preceding sentence.
This final action is ``nationally applicable'' within the meaning
of CAA section 307(b)(1). In the alternative, to the extent a court
finds this final action to be locally or regionally applicable, the
Administrator is exercising the complete discretion afforded to him
[[Page 24301]]
under the CAA to make and publish a finding that this action is based
on a determination of ``nationwide scope or effect'' within the meaning
of CAA section 307(b)(1).\6\ This final action denies petitions for
exemptions from the RFS program for over 30 small refineries across the
country and applies to small refineries located within 18 states in 7
of the 10 EPA regions and in 8 different Federal judicial circuits.\7\
This final action is based on EPA's revised interpretation of the
relevant CAA provisions and the RIN discount and RIN cost passthrough
principles that are applicable to all small refineries no matter the
location or market in which they operate. For these reasons, this final
action is nationally applicable or, alternatively, the Administrator is
exercising the complete discretion afforded to him by the CAA and
hereby finds that this final action is based on a determination of
nationwide scope or effect for purposes of CAA section 307(b)(1) and is
hereby publishing that finding in the Federal Register.
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\6\ In deciding whether to invoke the exception by making and
publishing a finding that this final action is based on a
determination of nationwide scope or effect, the Administrator has
also taken into account a number of policy considerations, including
his judgment balancing the benefit of obtaining the D.C. Circuit's
authoritative centralized review versus allowing development of the
issue in other contexts and the best use of Agency resources.
\7\ In the report on the 1977 Amendments that revised section
307(b)(1) of the CAA, Congress noted that the Administrator's
determination that the ``nationwide scope or effect'' exception
applies would be appropriate for any action that has a scope or
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at
323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03.
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Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the District of Columbia Circuit by June 24, 2022.
Joseph Goffman,
Principal Deputy Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2022-08686 Filed 4-22-22; 8:45 am]
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