U.S. Supreme Court Denies Valero Energy Petition

Valero requested a ruling on the “point of obligation” for the Renewable Fuel Standard. 

May 20, 2020

WASHINGTON—The U.S. Supreme Court will not review the request by Valero Energy to “reassess whether the EPA [Environmental Protection Agency] should expand the number of companies that must comply with the Renewal Fuel Standard [RFS],” Politico reports.

The case made its way to the Supreme Court after the D.C. Circuit Court had declined efforts by refiners to alter the “point of obligation” for the RFS to reduce compliance costs associated with the program. The agency had refused Valero’s request three years ago.

“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 (RVOs) for the U.S. transportation fuel supply and states that the first of three annual required elements is to determine the point of obligation,” Ethanol Producer Magazine reports.

“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 American Fuel & Petrochemical Manufacturers wrote in their petition, according to Ethanol Producer Magazine. “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.”

In response, the agency explained in its court documents “that changing the point of obligation would not increase, and might decrease, the production or use of renewable fuels … [T]he point-of-obligation rule did not disproportionately impact any particular group of refineries or provide windfall profits to unobligated blenders. … 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.”