The Supreme Court on Friday ruled in favor of small oil refineries in a dispute over whether they are eligible for exemptions from a federal program requiring increased use of renewable fuels.
In a 6–3 ruling (pdf) the high court overturned a lower court decision that had faulted the U.S. Environmental Protection Agency (EPA) for giving refineries in Wyoming, Utah, and Oklahoma extensions on waivers from Renewable Fuel Standard requirements even though the companies’ prior exemptions had expired.
Former President Donald Trump expanded waivers for U.S. refiners from the Renewable Fuel Standard, which requires refiners to blend billions of gallons of ethanol and other biofuels into their fuel each year or buy credits from those that do. Refiners have said the policy threatens to bankrupt fuel makers who were hit by sinking demand during the pandemic.
Renewable fuel groups said that the Trump-era increase in waivers had undercut the demand for their products by billions of dollars.
Justice Neil Gorsuch, writing on behalf of the majority, compared the extensions at issue in this case to those granted in everyday life, such as to a contract whose terms had expired.
“On their view, small refineries whose exemptions have lapsed in one year may still seek an ‘extension’ in a following year. Indeed, the small refineries candidly characterize this as their stronger argument for reversal,” Gorsuch wrote.
“We agree. It is entirely natural—and consistent with ordinary usage—to seek an ‘extension’ of time even after some lapse,” Gorsuch continued. Think of the forgetful student who asks for an ‘extension’ for a term paper after the deadline has passed, the tenant who does the same after overstaying his lease, or parties who negotiate an ‘extension’ of a contract after its expiration.”
In a dissent, conservative Justice Amy Coney Barrett, joined by liberal justices Sonia Sotomayor and Elena Kagan, faulted the majority’s interpretation of the word “extend.”
The “EPA cannot ‘extend’ an exemption that a refinery no longer has,” Barrett wrote. “Because the Court’s contrary conclusion caters to an outlier meaning of ‘extend’ and clashes with statutory structure, I respectfully dissent.”
The case reflected a long-running dispute between the oil and corn industries over, with the legal battle focused on changes made in 2005 and 2007 to the Clean Air Act to require biofuel quotas in U.S. gasoline and diesel products.
To offset potential economic hardship from the rule changes, small refineries were exempt from the biofuel requirements until 2011, although the EPA was allowed to extend those exemptions.
At issue in the case that the Supreme Court ruled on was whether the EPA impermissibly exempted two refiners when they had not received continuous prior extensions of an initial exemption.
Several biofuel producer groups challenged the waivers, with a lower court last year ruling that the EPA had exceeded its authority “because there was nothing for the agency to ‘extend.'”
Reuters contributed to this report.