Big Oil files lawsuit against EPA on RFS2 rule

By Ron Kotrba
Posted March 29, 2010, at 4:20 P.M. CNT

The American Petroleum Institute filed a lawsuit today with the U.S. Court of Appeals for the District of Columbia challenging the U.S. EPA's rule on the revised renewable fuel standard (RFS2) that was just recently finalized. The final RFS2 rule combines the 2009 and 2010 biomass-based diesel volumes.

API issued the following statement regarding its lawsuit:

"While the U.S. oil and natural gas industry recognizes and appreciates the role of ethanol and other biofuels in the fuel marketplace, we are deeply concerned that the EPA's final RFS2 rule could result in higher consumer costs. By setting retroactive requirements, refiners, and ultimately consumers, will be penalized for EPA's inability to get this rule out on time as directed by Congress. We believe this rule unlawful and unfair, and we filed a petition for review in the U.S. Court of Appeals for the District of Columbia to challenge the legality of EPA's actions. EPA made the rule effective on July 1, 2010, while setting unreasonable mandates on refiners that reach back to 2009 for biomass-based diesel, and to Jan. 1 2010 for the other advanced biofuels."

API went on to say the U.S. oil and natural gas industry is the biggest consumer of ethanol and other biofuels, and that it supports a "realistic and workable" renewable fuel standard.

The National Petrochemical & Refiners Association also filed a petition for review with the U.S. Court of Appeals for the District of Columbia Circuit today, challenging portions of the EPA's final RFS2 rule.

"The petition NPRA filed today does not challenge the overall RFS2 program and does not call into question the important role renewable fuels play in our nation's transportation fuel mix," NPRA President Charles T. Drevna said. "Rather, our concern is with the unreasonable retroactive application of certain provisions of the rule and fundamental fairness in the implementation of policy.

The NPRA stated that the Energy Independence and Security Act of 2007, of which RFS2 was a part, required EPA to finalize certain standards by specific dates in 2008 and 2009. NPRA pointed out that EPA failed to meet those statutory deadlines.

"EPA retroactively and unlawfully imposed RFS2 compliance burdens on obligated parties, many of whom are NPRA members," Drevna added. "Simply put, the fact that EPA failed to meet its statutory obligations under current energy law does not give [EPA] license to impose retroactively additional compliance burdens on obligated parties. At the least, such action calls into serious question the fundamental fairness of EPA's RFS2 rulemaking process."