U.S. Supreme Court Denies Review of Biofuels Point of Obligation Issue

The U.S. Supreme Court on May 18 declined to review an EPA policy that fuel blenders are not responsible for mixing biofuels into gasoline. The case brought by Valero Energy Corp. and the American Fuel and Petrochemical Manufacturers claimed that EPA was unlawfully giving blenders a free pass under the Renewable Fuel Standard.   

The petition argued that the Clean Air Act’s RFS program requires EPA to undertake annual notice-and-comment rulemaking to determine annual renewable volume obligations for the U.S. transportation fuel supply, and it argues that the first of three annual required elements is to determine the point of obligation. 

“EPA admits that it initially placed the point of obligation on refineries and importers, but not on blenders, for reasons of administrative convenience,” Valero and AFPM said in their December 30 petition. “EPA has repeatedly refused to reexamine that placement in annual rulemaking, and it denied petitions for rulemaking seeking reconsideration outside the statutorily mandated annual assessment.”

The EPA filed comments April 3 with the court urging the Supreme Court to deny review. It said that review of the point of obligation issue it has undertaken in the past show “that changing the point of obligation would not increase, and might decrease, the production or use of renewable fuels.” The agency has also determined that “the point-of-obligation rule did not disproportionately impact any particular group of refineries or provide windfall profits to unobligated blenders.” In addition, “EPA determined that moving the point of obligation to encompass blenders would have the counterproductive effects of greatly increasing the number of obligated parties and the complexity of the renewable fuels program” and “found that changing the point of obligation would not increase energy security.”