| Regulatory Alert: Federal Appeals Court Strikes Down Rule Allowing Summertime E15 Sales
The U.S. Court of Appeals for the District of Columbia Circuit last week scrapped EPA’s Trump-era rule authorizing the use of E15 during the summer driving season. In a unanimous opinion issued July 2, the three-judge panel struck down EPA’s interpretation of Clean Air Act language relating to waivers from summertime RVP limits. EPA’s original interpretation of the one-pound per square inch RVP waiver applied to E10 fuel only. The Trump administration reinterpreted the language in a 2019 rulemaking so that the one-pound waiver extended to E15 blends as well. However, the court found that the EPA misinterpreted the statutory language and ruled that the one-pound waiver cannot be extended to blends higher than E10.
The opinion effectively blocks the summertime sale of E15 fuel in non-RFG areas. The ruling deals a blow to biofuel producers who hoped the 2019 rule would boost E15 market share and reopen shuttered ethanol processing facilities. This is the second substantial legal loss for the biofuels industry in as many weeks. Last week, the U.S. Supreme Court upheld EPA’s authority to issue extensions of small refiner waivers from blending mandates under the Renewable Fuels Standard (RFS). The two rulings will significantly slow the penetration of higher content ethanol blends into the retail market. In addition, the rulings mean fewer obligated parties will be participating in the RINs market. Fewer parties chasing fewer blending credits will result in significantly lower RIN prices. This in turn, this will calm current volatility in the RINs market where prices have soared since the summertime E15 rule was issued. The court, however, did not go beyond its analysis of the Clean Air Act waiver language and address small gasoline retailer arguments that the E15 rule would force them to sell E15 and be saddled with undue and onerous compliance burdens.
It is not clear how the court ruling will affect E15 sales this year now that the summer driving season has arrived. There is typically a short period of legal limbo after such decisions by federal appeals courts to allow the losing parties time to file for a rehearing of a three-judge ruling before all active judges in the circuit. In this case, there are currently 11 active judges in the District Columbia Circuit. However, a rehearing is unlikely because such proceedings are generally disfavored by the court and require a majority of active judges within the circuit to approve.
President Biden to Propose Stringent MPG Standards Designed to Speed-up Transition to EVs
The Biden administration is set to propose an ambitious two prong plan to reduce automobile greenhouse gas emissions designed to make electric cars the dominant vehicle sold in the United States. The plan is a key part of the administration’s goal of reducing greenhouse gas emissions by 50 percent of 2005 levels by 2030. That goal would require a radical transformation of the nation’s economy away from fossil fuels, including a rapid shift to electric vehicles. Currently only two percent of the vehicles sold in the United States are electric.
The first prong of the plan would require automobile manufacturers to achieve a corporate average fuel economy (CAFE) of 51 mpg by 2026 in order to meet strict new tailpipe emission reductions. The proposed standard is more stringent than the 44-mpg target for 2026 set by the Trump administration. A follow-up MPG standard is being drafted to achieve even tougher tailpipe emission reductions through 2032. The plan is designed to force automobile makers to build more EVs to meet rapidly escalating CAFE requirements. If the plan is to succeed, it must win over both automakers and consumers. This will require, a massive investment for EV fueling infrastructure together with generous tax incentives for both EV manufacturers and EV purchasers.
However, the latest version of the $579 billion bipartisan infrastructure bill, now endorsed by the 58-member Problem Solvers Caucus, provides just seven billion dollars of the total $174 billion needed to fund the 500,000 changing stations required to make the transition to EVs possible. The bipartisan bill is paid for through a combination of increased tax enforcement, user fees, re-purposed Covid19 relief funds and incentives for private investment. It does not include a gas tax increase or EV registration fees. The 58-member Problem Solvers Caucus also bucked Speaker Pelosi and progressive democrats and called for a stand-alone vote in the House instead of linking any House approval of the bipartisan deal to Senate passage of a later, larger corporate and individual tax and social spending budget bill. Meanwhile, the EPA and U.S. DOT expect to issue a proposed rule for the first round of new tailpipe emission standards this summer.
Small Refinery Exemption Clarification Act Introduced
Last week, Representatives Angie Craig (D-MN) and Randy Feenstra (R-IA) introduced the “Small Refinery Exemption Clarification Act of 2021.” The bipartisan legislation would clarify that only oil refineries that have been continuously receiving small refinery exemptions (SREs) since 2011 would be eligible to petition for extensions of renewable fuel blending requirement exemptions.
Reps. Craig and Feenstra introduced the bipartisan bill following the recent Supreme Court decision the Supreme Court ruled in HollyFrontier Cheyenne Refining, LLC, et al., v. RFA, et al. to uphold the right of small refineries to request extension of economic hardship waivers after they lapse. Biofuel proponents argued that the EPA did not have the authority to issue waiver extensions once the original underlying waiver expired. They hoped the Supreme Court would strictly limit the granting of small refinery waivers that mushroomed under the Trump administration, by narrowing the timeframe within which an extension request is valid. The large number of small refinery waivers granted under the Trump administration effectively kept annual biofuel blending volumes stagnant, thus preventing E15 gasoline from making significant new inroads into retail markets outside the Midwest.
Now that the Supreme Court took the extension issue off the table, biofuel supporters are changing tactics and looking to a legislative solution. The bipartisan bill is supported by Growth Energy, the National Corn Growers Association, the Renewable Fuels Association and the National Farmers Union.
June 2021 EMA Small Business Committee (SBC) PAC Contributions
PAC Co-Chairs Brad Bell and Tim Keigher are grateful for the Energy Marketers of America Small Business Committee (SBC) PAC contributions from the following individuals during the June 1-30, 2021 time frame:
Michigan: James Linton
Mississippi: Philip Chamblee, John Fair Jr., James Lipscomb, Clifton Van Cleave
Nebraska: Jack Hill
NECSEMA: Patrick Connell
North Carolina: James Young
Pennsylvania: Lester Brown, Quincy Longacre
EMA Journal Spring Issue Online Now
You can now take EMA Journal with you wherever you go. Click here to view the Spring 2021 Issue, optimized for any device. Scroll to select the articles that matter to you, then read, learn and share with the icons at the top of your screen. Looking for a past issue? Scroll through past covers on the left side of your browser or use our convenient search feature to find a particular topic. Miss flipping pages? Select "page view" from the menu bar or click the handy magazine icon for a classic page-turner. You can find our Annual Directory here which is featured in each Fall Issue.
For information on advertising in this valuable format, please call 844.423.7272 or email Innovative Publishing. Our Summer Issue will be in your mailboxes in August. Our Fall Issue advertising deadline is August 3, 2021. You want to be sure to advertise in EMA’s Annual Directory issue!
June 2021 Contributors to EMA MDF
Energy Marketers of America’s Marketer Defense Fund wants to thank the following individuals for their Marketer Defense Fund (MDF) contributions during the June 1-30 timeframe:
Louisiana: Grady Gaubert, Annie Gauthier
Mississippi: James A. Lipscomb III, Mississippi Petroleum Marketers and Convenience Stores Association
Oklahoma: Oklahoma Petroleum Marketers & Convenience Store Association
Pennsylvania: Quincy W. Longacre
Wyoming: Shelly Ellenbecker
Corporate donations are acceptable. MDF funds have been used to create a COVID-19 Situational Update & Resources webpage, to hire experts to cover important regulatory agencies and disaster relief dedicated to strengthening our lobbying efforts on Capitol Hill. Click here to donate to the EMA MDF.
Federated Insurance: Risk Management Corner
Is Your Facility Protected from Potential Theft?
Take a close look at your business. Does it seem like a place that may attract thieves? Predicting when a theft will occur is difficult – if not impossible. The thief could be someone with high intent who does a lot of planning, or potentially an amateur acting on impulse. Either way, consider the habits and situations that might make you an easier target, and what steps you may need to take to enhance the security of your business.
To learn more about the five key physical protection strategies that can assist, please clickhere. For additional information or to discuss further, please contact your Federated regional representative or EMA’s National Account Executive Jon Medo at 800.533.0472. Federated is an EMA Corporate Platinum Partner.
This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2021 Federated Mutual Insurance Company.
|
