United Refining Co. v. EPA

Summary

United Refining Co. v. EPA, 3d Cir. 2023. The court upheld EPA's denial of a small refinery's hardship exemption from the Renewable Fuel Standard program, finding EPA's decision not arbitrary or capricious. Key holdings: (1) No issue exhaustion required for RFS exemption petitions because the proceeding is inquisitorial, not adversarial; (2) EPA reasonably attributed RIN sale revenue to the year of generation rather than sale to provide an apples-to-apples comparison; (3) EPA permissibly declined to consider COVID-19 pandemic effects postdating the compliance year; (4) EPA reasonably relied on DOE's evaluation, including considering the parent company's capital and diversification and disregarding out-of-state regulations and certain expenses.

Holdings

1. United did not forfeit its objection because RFS exemption petitions are inquisitorial proceedings that do not require issue exhaustion.
2. EPA's decision to attribute RIN sale proceeds to the year of generation was reasonable and not arbitrary or capricious.
3. EPA's denial was not arbitrary or capricious. EPA reasonably declined to consider COVID-19 as it postdated the compliance year, and reasonably relied on DOE's evaluation of United's petition.

Questions Presented

1. Whether EPA acted arbitrarily and capriciously by attributing United's proceeds from selling 2017 and 2018 RINs to the years in which the RINs were generated rather than the year of sale.
2. Whether EPA's denial of United's hardship exemption was otherwise arbitrary or capricious, including its refusal to consider COVID-19 and its reliance on DOE's evaluation.

Disposition

dismissed