Should EPA Consider Petitions to Change the Point of Obligation in the RFS?

Earlier this month, DTN writer Todd Neeley reported that, “Should the EPA consider petitions to change the point of obligation in the Renewable Fuel Standard?

“It’s a question brought before the agency numerous times via petitions but never fully addressed in rulemaking.

“Valero Energy Corp. and the American Fuel and Petrochemical Manufacturers petitioned the United States Supreme Court to consider whether EPA is following the law.”

Mr. Neeley explained that, “Currently, refiners and fuel importers are obligated parties in the RFS. The agency has been petitioned several times to consider instead requiring fuel blenders to follow the RFS.

“In the petition filed with the high court on Dec. 30, the plaintiffs argue the EPA has violated the law by not considering such petitions. The refiners and petroleum groups argue that EPA is required annually to consider specific elements under the RFS, but has refused to look at changes to the point of obligation.

“‘EPA admits that it initially placed the point of obligation on refineries and importers, but not blenders, for reasons of administrative convenience. 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 plaintiffs stated in the petition.”

The DTN article noted that, “Shifting the point of obligation to ‘blenders’ has been an ongoing source of friction with refiners. In 2016, a refiner petitioned EPA to shift the point of obligation to owners of the fuel at the rack who pay excise taxes on the fuel. The rack price is the price refiners charge to sell their gasoline to various clients.

“The Renewable Fuels Association notes that shifting the obligation to the blender could ‘exponentially increase the number of obligated parties’ under the RFS, making it far more difficult for EPA to enforce the law.

“Biofuel and petroleum interests have filed numerous lawsuits throughout the years challenging the EPA’s implementation of the RFS.”

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