EPA complies with nonexistent RFS clause
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December 14, 2017
EPA complies with nonexistent RFS clause

The EPA has published a 12-page paper explaining how it is meeting a Clean Air Act (CAA) requirement that it conduct periodic reviews of certain aspects of the Renewable Fuel Standard (RFS). The paper specifically addresses CAA Section 201(o)(11), which states:

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“To allow for the appropriate adjustment of the requirements described in subparagraph (B) of paragraph (2), the Administrator shall conduct periodic reviews of—

(A) existing technologies;

(B) the feasibility of achieving compliance with the requirements; and

(C) the impacts of the requirements described in subsection (a)(2) on each individual and entity described in paragraph (2).”

The paper makes three points. First, the section is ambiguous in many respects and provides the Agency significant discretion to determine how and when the periodic reviews will be conducted and made available to the public. Second, section (C) above refers to subsection “(a)(2),” which, the EPA notes, does not exist, therefore rendering this reference “unintelligible and inoperative.” Nonetheless, the paper explains that the Agency believes it should treat this provision as if it is operative and explains how in the implementation of the RFS it has done so. Third, while acknowledging that it has not performed any action that it specifically labeled as a “periodic review,” the EPA states that it has conducted reviews that address the three areas listed in the section, which, therefore satisfy the requirement.

Unintelligible and inoperative

“It is impossible for EPA to review the impacts of the requirements described in a nonexistent provision,” the EPA states. The Agency adds that the scrivener’s error doctrine provides an agency the opportunity to rewrite an erroneous cross-reference. However, the courts have ruled that such a rewrite requires “an extraordinarily convincing justification.” Rather than take that path, the Agency decided to point to numerous other ways it has assessed the impact of the RFS on each individual and entity (which the EPA interprets to mean refineries, blenders, distributors, importers, and consumers of transportation fuel). Several examples:

  • In the 2010 rulemaking that instituted the RFS2 program, the EPA evaluated the impacts of the program on regulated small entities in the context of the small producer exemption.
  • In 2012, the EPA received a waiver request from several states. In the context of evaluating and responding to that request, the Agency says it evaluated impacts of the program on ethanol production and use, feed prices, and fuel prices.
  • The annual rulemakings that establish the applicable standards for each compliance year included an evaluation of the impacts on regulated parties of those standards in the context of EPA’s assessment of whether the standards are feasible and appropriate.

Periodic reviews

In addition to the above reviews, which would meet the obligations of Section 201(o)(11)(C) if subsection (a)(2) were operative, the paper lists the following reviews that it considers periodic to meet the requirement of Sections 201(o)(11)(A) and 201(o)(11)(B).

  • Subsection 201(o)(11)(A)—existing technologies. The first “periodic review” was conducted as part of the RFS1 final rulemaking published on May 1, 2007, and a more comprehensive review was conducted as part of the RFS2 final rulemaking published on March 26, 2010. In the RFS2 rulemaking, the EPA says it reviewed a full array of technologies throughout the full supply chain system. This review included technology for producing renewable feedstocks and renewable fuels and technology for distributing, blending, dispensing, and consuming renewable fuel. In subsequent rulemakings, including those in which the EPA set the applicable annual standards, the Agency says it reviewed updated and new data on advances in various technologies.
  • Subsection 201(o)(11)(A)—feasibility of achieving compliance with the requirements. In the RFS2 final rulemaking, the EPA says it reviewed the feasibility of achieving compliance with the statutory volume targets for 2010, concluding that meeting the volume target for cellulosic biofuel was not feasible but that meeting the other three volume targets was feasible. In subsequent rulemakings to set the applicable annual standards, the Agency adds that it also reviewed the feasibility of achieving compliance with the statutory volume targets in the context of determining whether and to what degree to employ the RFS waiver authority.

EPA’s document, Periodic Reviews for the Renewable Fuels Standard Program, is here.

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