Petitioners Brief — HollyFrontier Cheyenne Refining, LLC, et al., Petitioners v. Renewable Fuels Association, et al.

Supreme Court briefFeb 22, 2021

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No. 20-472

IN THE

Supreme Court of the United States

____________

HOLLYFRONTIER CHEYENNE REFINING, LLC, HOLLYFRONTIER REFINING & MARKETING, LLC, HOLLYFRONTIER WOODS CROSS REFINING, LLC, &

WYNNEWOOD REFINING CO., LLC,

Petitioners,

RENEWABLE FUELS ASSOCIATION, ET AL.,

Respondents.

____________

On Writ of Certiorari

to the United States Court of Appeals

for the Tenth Circuit

____________

BRIEF OF PETITIONERS

____________

MELISSA M. BUHRIG

CVR ENERGY, INC.

2277 Plaza Drive

Suite 500

Sugar Land, TX 77479

(281) 207-3200

mmbuhrig@cvrenergy.com

Counsel for Wynnewood

Refining Co., LLC

PETER D. KEISLER*

RYAN C. MORRIS

ERIC D. MCARTHUR

PETER C. WHITFIELD

CHRISTOPHER S. ROSS

ALICE A. WANG

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

pkeisler@sidley.com

Counsel for HollyFrontier Petitioners

February 22, 2021

* Counsel of Record

QUESTION PRESENTED

The Renewable Fuel Standard requires refiners,

blenders, and importers of transportation fuel to blend

increasing amounts of renewable fuels into their products each year. Recognizing that this mandate could

harm small refineries, Congress provided that small

refineries could “at any time petition [EPA] for an extension of the exemption under subparagraph (A) for

the reason of disproportionate economic hardship.” 42

U.S.C. §7545(o)(9)(B)(i). The Tenth Circuit interpreted

this provision to mean that a small refinery may obtain an exemption only if it has received uninterrupted, continuous extensions of the exemption for

every year since 2011—an interpretation that excludes

nearly all small refineries.

Accordingly, the question presented is:

In order to qualify for a hardship exemption under

§7545(o)(9)(B)(i) of the Clean Air Act, does a small refinery need to receive uninterrupted, continuous hardship exemptions for every year since 2011.

(i)

PARTIES TO THE PROCEEDING AND RULE

29.6 STATEMENT

Petitioners are HollyFrontier Cheyenne Refining,

LLC, HollyFrontier Refining & Marketing, LLC, HollyFrontier Woods Cross Refining, LLC, and Wynnewood Refining Co., LLC. Respondents are Renewable

Fuels Association, American Coalition for Ethanol,

National Growers Association, and National Farmers

Union. The United States Environmental Protection

Agency, who was respondent below, is also a Respondent.

HollyFrontier Cheyenne Refining, LLC, HollyFrontier Refining & Marketing LLC, and HollyFrontier

Woods Cross Refining, LLC are each a wholly owned

subsidiary of HollyFrontier Corporation, a Delaware

corporation publicly traded on the New York Stock Exchange under the symbol HFC. Other than HollyFrontier Corporation, no publicly held company holds a

10% or greater interest in HollyFrontier Refining &

Marketing LLC, HollyFrontier Cheyenne Refining,

LLC, or HollyFrontier Woods Cross Refining, LLC.

Wynnewood Refining Company, LLC (“Wynnewood”) is a wholly owned subsidiary of CVR Refining,

LLC, a Delaware limited liability company. CVR Refining, LLC is a wholly owned subsidiary of CVR Refining, LP, which is an indirect wholly owned subsidiary of CVR Energy, Inc., a Delaware corporation publicly traded on the New York Stock Exchange under

the Symbol “CVI.”

RELATED PROCEEDINGS

This case arises from a petition for review of final

agency action of the United States Environmental Protection Agency: Renewable Fuels Association, et al. v.

iii

United States Environmental Protection Agency, No.

18-9533 (10th Cir. Jan. 24, 2020).

No other case is directly related to this one, whether

in state or federal trial or appellate courts, or in this

Court.

TABLE OF CONTENTS

Page

QUESTION PRESENTED ...................................

PARTIES TO THE PROCEEDING AND RULE

29.6 STATEMENT ............................................

RELATED PROCEEDINGS.................................

TABLE OF AUTHORITIES .................................

OPINION BELOW................................................

JURISDICTION....................................................

STATUTORY PROVISION INVOLVED .............

INTRODUCTION .................................................

STATEMENT OF THE CASE..............................

I. STATUTORY AND REGULATORY BACKGROUND .......................................................

A. Overview Of The RFS Program ................

B. Small-Refinery Exemptions......................

C. Regulatory Implementation .....................

II. BACKGROUND OF THE CASE ..................

A. Factual Background..................................

B. Proceedings Below ....................................

SUMMARY OF THE ARGUMENT .....................

ARGUMENT .........................................................

I. THE STATUTE’S TEXT, STRUCTURE,

AND PURPOSE DEMONSTRATE THAT

THE HARDSHIP EXEMPTION IS AVAILABLE “AT ANY TIME” A SMALL REFINERY EXPERIENCES DISPROPORTIONATE ECONOMIC HARDSHIP .....................

(iv)

TABLE OF CONTENTS—continued

A. The Term “Extension” Does Not Limit

The Hardship Exemption To Small Refineries That Have Been Exempt Continuously...........................................................

Page

1. The term “extension,” standing alone,

has multiple possible meanings ...........

2. The “make available” meaning comports with the statutory text ................

3. In the alternative, the temporal meaning of “extension” does not require continuity ....................................................

B. The Surrounding Terms And Statutory

Structure Confirm That Congress Did Not

Impose A Continuity Requirement ..........

1. “At any time” .........................................

2. “A small refinery” .................................

3. “For the reason of disproportionate economic hardship” ....................................

C. The Tenth Circuit’s Continuity Requirement Is Inconsistent With Congress’s

Purpose For Both The Hardship Exemption And The RFS .....................................

II. EPA’S REASONABLE INTERPRETATION

OF THE HARDSHIP EXEMPTION IS ENTITLED TO DEFERENCE ...........................

CONCLUSION .....................................................

CASES

TABLE OF AUTHORITIES

Page

Ali v. Fed. Bureau of Prisons, 552 U.S. 214

(2008) ..........................................................

AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366

(1999) ..........................................................

Barber v. Thomas, 560 U.S. 474 (2010) ........

Barr v. Am. Ass’n of Political Consultants,

Inc., 140 S. Ct. 2335 (2020) ...................... 24, 25

Burwell v. Hobby Lobby Stores, Inc., 573

U.S. 682 (2014) ...........................................

Campbell River Timber Co. v. Vierhus, 86

F.2d 673 (9th Cir. 1936) .............................

Chevron U.S.A., Inc. v. Nat. Res. Def.

Council, Inc., 467 U.S. 837 (1984) .............

Credit Suisse Sec. (USA) LLC v. Simmonds,

566 U.S. 221 (2012) ....................................

Envtl. Def. v. Duke Energy Corp., 549 U.S.

561 (2007) ...................................................

In re FCC 11-161, 753 F.3d 1015 (10th Cir.

2014) ...........................................................

Field v. Mans, 157 F.3d 35 (1st Cir. 1998)....

Gen. Dynamics Land Sys., Inc. v. Cline, 540

U.S. 581 (2004) ...........................................

Golan v. Holder, 565 U.S. 302 (2012) ...........

Graham Cty. Soil & Water Conservation

Dist. v. United States ex rel. Wilson, 559

U.S. 280 (2010) ...........................................

Harrison v. PPG Indus., Inc., 446 U.S. 578

(1980) ..........................................................

Hermes Consol., LLC v. EPA, 787 F.3d 568

(D.C. Cir. 2015) ..........................................

Idaho Sheet Metal Works, Inc., v. Wirtz, 383

U.S. 190 (1966) ...........................................

vii

TABLE OF AUTHORITIES—continued

Page

Little Sisters of the Poor Saints Peter & Paul

Home v. Pennsylvania, 140 S. Ct. 2367

(2020) ..........................................................

Nat’l Ass’n of Home Builders v. Defs. of

Wildlife, 551 U.S. 644 (2007) .....................

Nat’l R.R. Passenger Corp. v. Bos. & Main

Corp., 503 U.S. 407 (1992) ................. 28, 48, 49

Owasso Indep. Sch. Dist. No. 1 v. Falvo, 534

U.S. 426 (2002) ...........................................

Pa. Co. for Ins. on Lives & Granting Annuities v. Rothensies, 146 F.2d 148 (3d Cir.

1944) ...........................................................

Republic of Iraq v. Beaty, 556 U.S. 848

(2009) ..........................................................

Roberts v. Sea-Land Servs., Inc., 566 U.S. 93

(2012) ...................................................... passim

Robinson v. Shell Oil Co., 519 U.S. 337

(1997) ..........................................................

Rodriguez v. United States, 480 U.S. 522

(1987) ..........................................................

SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348

(2018) ..........................................................

Sessions v. Morales-Santana, 137 S. Ct. 1678

(2017) ..........................................................

Sherley v. Sebelius, 644 F.3d 388 (D.C. Cir.

2011) ...........................................................

Sinclair Wyo. Ref. Co. v. EPA, 887 F.3d 986

(10th Cir. 2017) ................................ 9, 11, 14, 41

Star Athletica, L.L.C. v. Varsity Brands,

Inc., 137 S. Ct. 1002 (2017) ........................

Sturgeon v. Frost, 136 S. Ct. 1061 (2016) .... 19, 45

Tyler v. Cain, 533 U.S. 656 (2001) ................

viii

TABLE OF AUTHORITIES—continued

United States v. Cleveland Indians Baseball

Co., 532 U.S. 200 (2001).............................

United States v. Kimbell Foods, Inc., 440

U.S. 715 (1979) ...........................................

United States v. Mead Corp.,533 U.S. 218

(2001) ..........................................................

United States v. Virginia, 518 U.S. 515

(1996) ..........................................................

Zobrest v. Catalina Foothills Sch. Dist., 509

U.S. 1 (1993) ...............................................

Page

STATUTES AND REGULATIONS

Families First Coronavirus Response Act, Pub.

L. No. 116-127, 134 Stat. 178 (2020) .........

Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136 (2020) ..........

Consolidated Appropriations Act, 2021, Pub.

L. No. 116-260, 134 Stat. 1182 (2020) .......

Judicial Redress Act of 2015, Pub. L. No.

114-126, 130 Stat. 282 (2016) ....................

Energy Independence and Security Act of 2007,

Pub. L. No. 110-140, 121 Stat. 1492 .......... 6, 41

John Warner National Defense Authorization Act for Fiscal Year 2007, Pub. L. No.

109-364, 120 Stat. 2083 (2006) ..................

Energy Policy Act of 2005, Pub. L. No. 10958, 119 Stat. 594 ........................................

12 U.S.C. §1795e(a)(1)...................................

15 U.S.C. §78l(f)(1)(E) ...................................

§1141d ...........................................

§1141e ...........................................

§1141f ............................................

§1141g ...........................................

18 U.S.C. §892 ...............................................

TABLE OF AUTHORITIES—continued

Page

19 U.S.C. §2434(c) .........................................

§2437(c)(1) .....................................

20 U.S.C. §4516(e) .........................................

22 U.S.C. §4061(a) .........................................

25 U.S.C. §3204(b)(3) ....................................

32 U.S.C. §308(a) ...........................................

§310(b) ...........................................

38 U.S.C. §3748 .............................................

42 U.S.C. §247d-7f(b) ....................................

§7411(j)(1)(E) ................................

§7545(o)(1)......................... 8, 13, 37, 47

§7545(o)(2)................................... 6, 7, 40

§7545(o)(3)..................................... 6, 7

§7545(o)(5).....................................

§7545(o)(9)................................. passim

§7545(o)(9)(A)................................

§7545(o)(9)(A)(i) .............. 11, 25, 27, 34

§7545(o)(9)(A)(ii) ....................... passim

§7545(o)(9)(B)(i) ........................ passim

§7601(a)(1) ....................................

§7625-1(b)(2) .................................

§9601(20)(H) .................................

43 U.S.C. §451b(c) .........................................

47 U.S.C. §1455(b)(1) ....................................

50 U.S.C. §2333(c) .........................................

40 C.F.R. §80.1401 ........................................ 7, 13

§80.1401 (2014) .............................

§80.1405 ........................................

§§80.1405–.1407 ...........................

§80.1406 ........................................

§80.1425 ........................................

§80.1426 ........................................

§80.1427(a)(6) ...............................

§80.1429(b) ....................................

§80.1441(a)(1) (2010) ....................

TABLE OF AUTHORITIES—continued

Page

40 C.F.R. §80.1441(e)(2) (2014) ....................

§80.1451 ........................................

82 Fed. Reg. 58,486 (Dec. 12, 2017) .............. 8, 44

79 Fed. Reg. 42,128 (July 18,

2014) ....................................... 13, 43, 47, 48, 49

78 Fed. Reg. 36,042 (June 14, 2013) .............

75 Fed. Reg. 14,670 (Mar. 26, 2010) ....... 12, 13, 43

RULE

Fed. R. Civ. P. 6(b)(1)(B) ...............................

LEGISLATIVE MATERIALS

H.R. Rep. No. 111-278 (2009) (Conf. Rep.) ...

H.R. Rep. No. 107-157 (2001) .......................

S. Rep. No. 114-281 (2016) ........................... 13, 14

S. Rep. No. 111-45 (2009) ..............................

S. Rep. No. 108-57 (2003) ............................. 10, 38

163 Cong. Rec. H3327 (daily ed. May 3,

2017) ...........................................................

Cong. Research Serv., Small Refineries and

Oil Field Processors (Aug. 11, 2014), https://

fas.org/sgp/crs/misc/R43682.pdf ................ 9, 10

OTHER AUTHORITIES

American Heritage College Dictionary (4th

ed. 2007) ................................................... 23, 24

Black’s Law Dictionary (6th ed. 1990)..........

Cambridge Online English Dictionary .........

TABLE OF AUTHORITIES—continued

Page

D. Degennaro, 10 Years Later, Renewable

Fuel Standard Fails to Live up to Environmental Promises, The Hill (Dec. 19, 2017),

https://thehill.com/opinion/energy-environment/365650-weve-tried-for-10years-the-rfs-ethanol-mandate-will-neverreduce .........................................................

EPA, RFS Small Refinery Exemptions,

https://www.epa.gov/fuels-registrationreporting-and-compliance-help/rfs-smallrefinery-exemptions (last updated Feb. 18,

2021) ...........................................................

EPA, RIN Trades and Price Information,

https://www.epa.gov/fuels-registrationreporting-and-compliance-help/rin-tradesand-price-information (last visited Feb.

11, 2021) .....................................................

J. Lubetkin, Nat’l Wildlife Fed’n, New

Research Proves Biofuels Policy Driving

Environmental Harm (Mar. 7, 2019),

https://www.nwf.org/Home/Latest-News/

Press-Releases/2019/03-07-19-BiofuelsEnvironmental-Harm ................................

New Oxford American Dictionary (3d. ed.

2010) ...........................................................

Office of Policy & Int’l Affairs, Dep’t of Energy, EPACT 2005 Section 1501: Small Refineries Exemption Study (Jan. 2009) .. 9, 10, 12

Office of Policy & Int’l Affairs, Dep’t of Energy, Small Refinery Exemption Study

(Mar. 2011) ................................ 9, 10, 12, 43, 44

xii

TABLE OF AUTHORITIES—continued

Page

Erwin Seba & Laura Sanicola, Oil Refiners

Face Reckoning as Demand Plummets,

REUTERS (Apr. 2, 2020), https://www.

reuters.com/article/us-health-coronavirusrefinery-runcuts/oil-refiners-face-reckoningas-demand-plummets-idUSKBN21K0C8 ...

Webster’s Third New International Dictionary (1986)...........................................

23, 29

Bernard L. Weinstein, Maguire Energy

Inst., S. Methodist Univ., Renewable Identification Numbers (RINs) Trading Under

the Renewable Fuels Program: Unintended Consequences for Small Retailers

(Aug. 2016), https://www.heartland.org/

publications-resources/publications/renewable-identification-numbers-rinstrading-under-the-renewable-fuelsprogram-unintended-consequences-forsmall-retailers ...........................................

OPINION BELOW

The Tenth Circuit’s opinion is reported at 948 F.3d

1206 and reproduced at Petition Appendix (“App.”) 1a–

94a. The underlying EPA orders are confidential, unreported, and reproduced in a supplemental, sealed

appendix to the Petition (“Suppl. App.”) 1a–31a, 32a–

39a, and 40a–46a.

JURISDICTION

The court of appeals entered judgment on January

24, 2020, App. 1a, and denied timely petitions for rehearing en banc on April 7, 2020, App. 95a–96a. The

Petition was timely filed on September 4, 2020, and

granted on January 8, 2021. This Court has jurisdiction under 28 U.S.C. §1254(1).

STATUTORY PROVISION INVOLVED

Section 211(o)(9) of the Clean Air Act (“CAA”) (otherwise known as the Renewable Fuels Standard

(“RFS”) program) provides:

(9) Small refineries

(A) Temporary exemption

(i) In general

The requirements of paragraph (2) shall

not apply to small refineries until calendar year 2011.

(ii) Extension of exemption

(I)

Study by Secretary of

Energy

Not later than December 31, 2008,

the Secretary of Energy shall conduct for the Administrator a study

to determine whether compliance

with the requirements of paragraph (2) would impose a disproportionate economic hardship on

small refineries.

(II)

Extension of exemption

In the case of a small refinery that

the Secretary of Energy determines under subclause (I) would

be subject to a disproportionate

economic hardship if required to

comply with paragraph (2), the Administrator shall extend the exemption under clause (i) for the

small refinery for a period of not

less than 2 additional years.

(B) Petitions based on disproportionate

economic hardship

(i) Extension of exemption

A small refinery may at any time petition

the Administrator for an extension of the

exemption under subparagraph (A) for

the reason of disproportionate economic

hardship.

(ii) Evaluation of petitions

In evaluating a petition under clause (i),

the Administrator, in consultation with

the Secretary of Energy, shall consider

the findings of the study under subparagraph (A)(ii) and other economic factors.

(iii) Deadline for action on petitions

The Administrator shall act on any petition submitted by a small refinery for a

hardship exemption not later than 90

days after the date of receipt of the petition.

If a small refinery notifies the Administrator

that the small refinery waives the exemption

under subparagraph (A), the regulations promulgated under paragraph (2)(A) shall provide for

the generation of credits by the small refinery

under paragraph (5) beginning in the calendar

year following the date of notification.

(D) Opt-in for small refineries

A small refinery shall be subject to the requirements of paragraph (2) if the small refinery notifies the Administrator that the small refinery

waives the exemption under subparagraph (A).

42 U.S.C. §7545(o)(9). Other relevant provisions are

set forth in statutory appendix C to the Petition. See

App. 97a–103a.

INTRODUCTION

To help ensure American energy independence, Congress enacted the RFS program, which requires refiners and other regulated parties to demonstrate that

specified amounts of ethanol and other renewable

fuels are blended into the Nation’s gasoline and diesel

fuels each year. This program imposes significant compliance burdens on regulated parties, burdens that escalate because the amount of renewable fuel that must

be blended increases each year.

Recognizing that these requirements could be particularly burdensome for small refineries, Congress

granted them a blanket exemption from the RFS man-

date until 2011 and directed the Environmental Protection Agency (“EPA”) to extend that exemption for

two additional years for small refineries that the Department of Energy (“DOE”) determined would otherwise suffer disproportionate economic hardship.

Congress also recognized, however, that these initial

measures might be insufficient. Accordingly, in a separate subparagraph of the statute, Congress authorized small refineries to petition EPA “at any time” for

“an extension of the exemption” from the RFS mandates based on “disproportionate economic hardship”—relief that Congress elsewhere in the same provision called “a hardship exemption.”

The issue presented is whether the Tenth Circuit

correctly held that small refineries are disqualified

from seeking hardship exemptions unless they have a

continuous, unbroken history of exemptions during all

years of the RFS program. If affirmed, that holding

would foreclose most small refineries from obtaining

hardship exemptions and create a one-way ratchet

that would effectively phase-out the exemption. The

lower court’s reading thus would eliminate a regulatory relief program for small refineries, which often

provide high paying jobs in rural communities, are an

important source of tax revenue, and supply reasonably priced transportation fuels in many regions not

fully served by larger refineries. Equally important,

the lower court’s reading threatens to shutter important domestic refining capacity, undermining Congress’s energy-independence purpose.

The lower court arrived at its interpretation in two

main steps. First, focusing on the provision authorizing “an extension” of the hardship exemption, the

court reasoned that one definition of “extension” is an

“increase in length of time,” a definition that supposedly presumes the thing being extended has been in

effect continuously up until the moment of extension.

App. 66a–67a. Second, the court believed that this definition furthered the statute’s purpose, which it characterized as funneling small refineries into compliance

over time. It concluded that if a small refinery “figures

out how to put itself in a position of annual compliance” for even one year, id. at 68a, it is forever disqualified from seeking future hardship relief because it has

had “time to adapt” and to “ponder … whether it made

sense to … remain in the market in light of the statute’s challenging renewable fuels mandate,” id. at 70a.

The court did not explain how driving from the market

small refineries that had attained but cannot maintain

compliance, while allowing those that never achieve

compliance to continue operating, would serve Congress’s energy-independence goal or the exemption’s

purpose to alleviate hardship for small refineries.

As shown below, both parts of the court’s analysis

are wrong. The statute’s text, structure, and purpose

make clear that Congress designed the hardship exemption as a safety valve available whenever a small

refinery experiences disproportionate economic hardship from the burdens of RFS compliance—burdens

that Congress knew would escalate annually when it

authorized small refineries to petition for “a hardship

exemption” “at any time.” This reading is fully consistent with the word “extension,” and—unlike the

Tenth Circuit’s reading—it harmonizes with the surrounding statutory terms, the statute’s structure, and

the statutory purpose to secure energy independence.

It also avoids the arbitrary results the Tenth Circuit’s

reading creates, while preserving a critical lifeline that

Congress designed to protect small refineries and the

communities they serve.

Properly construed, the statute does not prohibit

EPA from extending a hardship exemption to a small

refinery simply because it has not received an exemption for every prior year. At a minimum, EPA’s interpretation is reasonable and entitled to deference.

The Court should reverse the decision below.

STATEMENT OF THE CASE

I. STATUTORY AND REGULATORY BACKGROUND

A. Overview of the RFS program

In 2005, and again in 2007, Congress amended the

CAA to include the present-day RFS program. See 42

U.S.C. §7545(o); Energy Policy Act of 2005, Pub. L. No.

109-58, 119 Stat. 594; Energy Independence and Security Act of 2007, Pub. L. No. 110-140, 121 Stat. 1492.

Enacted against the backdrop of conflict in the Middle

East and concerns over excessive reliance on foreign

oil, the RFS program sought to “move the United

States toward greater energy independence and security” by increasing domestic production of renewable

fuels from U.S. agricultural feedstocks. 121 Stat. at

1492. The primary renewable fuel under the RFS program is ethanol, which is typically derived from corn

and can be blended into gasoline.

The RFS program achieves its energy-independence

goals by regulating the nation’s transportation-fuel industry. 42 U.S.C. §7545(o)(2)(B)(i)–(ii). Specifically,

the program requires certain regulated parties—entities that produce or import gasoline and diesel fuel in

the 48 contiguous states or Hawaii—to blend renewable fuels into their transportation fuels. See id.

§7545(o)(3)(B)(ii)(I); 40 C.F.R. §80.1406.

The RFS program establishes nationwide, annual

targets for the volume of renewable fuels that regulated parties must blend into transportation fuels.

See 42 U.S.C. §7545(o)(2)(B)(i)–(ii). Congress prescribed numerical volumes for renewable fuel, advanced biofuel, and cellulosic biofuel for each year

through 2022, and for biomass-based diesel through

2012. Id. §7545(o)(2)(B)(i)(I)–(IV). Each year, the

volume requirement increases. Id. For example, the

requirement for renewable fuel began at 4 billion

gallons in 2006 and rises to 36 billion gallons by

2022. Id. §7545(o)(2)(B)(i)(I).

Each year, based on the Energy Information Administration’s estimate of the volume of transportation fuel that will be introduced into commerce, EPA

sets an annual percentage standard obligation designed to achieve the blending of the amount of renewable fuels required for that year. See id.

§7545(o)(3)(B)(ii)(II); 40 C.F.R. §80.1405; see also 42

U.S.C. §7545(o)(2)(A), (3)(A), (3)(B)(i). Each regulated

party uses that percentage standard to determine its

individual RFS obligation based on the volume of gasoline and diesel it produces that year. 42 U.S.C.

§7545(o)(3)(B)(ii)(III); 40 C.F.R. §§80.1405–.1407. Because EPA derives its percentage standard from Congress’s escalating annual targets, the RFS’s compliance burden increases each year.

Regulated parties demonstrate compliance with

their RFS obligations by retiring a certain number of

“Renewable Identification Numbers” (“RINs”) annually. See 40 C.F.R. §§80.1401, 80.1425–.1426. Each

RIN represents a gallon of renewable fuel. Id. When a

party purchases a batch of renewable fuel, it also obtains the RINs associated with that batch. Once a

party blends the renewable fuel into transportation

fuel, the RINs are “separated” and can be “retired” to

satisfy RFS obligations. Id. §§80.1426(e), 80.1429(b).

But regulated parties can satisfy their RFS obligations

another way. They can purchase RINs from others

through a credit-based market established by Congress and EPA. See 42 U.S.C. §7545(o)(5); 40 C.F.R.

§§80.1427(a)(6), 80.1451(c). The price of RINs in this

market, however, fluctuates substantially in response

to supply and demand. See, e.g., Renewable Fuel

Standard Program: Standards for 2018 and BiomassBased Diesel Volume for 2019, 82 Fed. Reg. 58,486,

58,520 (Dec. 12, 2017) (“2018 RFS Volume”)

(fig.VI.B.2-1) (showing up to four-fold change).

While the RFS program forces increased consumption of renewable fuels based on agricultural feedstocks, it is not viewed as an environmental protection

program. As the National Wildlife Federation observed, “the Renewable Fuel Standard created a

strong economic incentive to increase domestic corn

production to meet the federal mandate for new biofuels. The ensuing expansion and intensification of crop

agriculture has transformed the landscape, leading to

a cascade of negative impacts on wildlife habitat, water resources, and the climate.”1

B. Small-Refinery Exemptions

Congress understood that RFS compliance could be

especially burdensome for small refineries, defined as

those with an “average aggregate daily crude oil

throughput” of 75,000 barrels or less “for a calendar

year.” 42 U.S.C. §7545(o)(1)(K), (o)(9); see also 40

1 J. Lubetkin, Nat’l Wildlife Fed’n, New Research Proves Biofuels Policy Driving Environmental Harm (Mar. 7, 2019) (quoting

Professor

Aaron

Smith,

Univ.

Cal.,

Davis),

https://www.nwf.org/Home/Latest-News/Press-Releases/2019/0307-19-Biofuels-Environmental-Harm; see also D. Degennaro, 10

years later, Renewable Fuel Standard fails to live up to environmental promises, The Hill (Dec. 19, 2017) (the production and use

of corn ethanol under the RFS “has done incredible damage to the

natural landscape, and actually increased rather than reduced

climate-disrupting pollution”).

C.F.R. §80.1401. Small refineries, Congress recognized, lack the “inherent scale advantages of large refineries.” Sinclair Wyo. Ref. Co. v. EPA, 887 F.3d 986,

989 (10th Cir. 2017); see also Hermes Consol., LLC v.

EPA, 787 F.3d 568, 572 (D.C. Cir. 2015).

For example, small refineries tend to be less integrated than their larger counterparts. See Hermes

Consol., 787 F.3d at 572. Larger refineries participate

in more segments of the supply chain, including transportation, marketing, distribution, and sales. See Office of Policy & Int’l Affairs, Dep’t of Energy, Small Refinery Exemption Study, at 23 (Mar. 2011) (“2011 DOE

Study”). Smaller refineries do not have the same reach

and often lack the significant capital necessary for expensive infrastructure to blend renewable fuels. See

id. at 24, 34. This inhibits their ability to store and

blend renewable fuels into their own gasoline and diesel fuels, so they often must satisfy their RFS obligations by buying costly RINs. See id. at vii, 2.

In addition, many retail stations will not accept

blended fuels from small refineries (which may not

own retail stations they can compel to accept such

fuel). See Office of Policy & Int’l Affairs, Dep’t of Energy, EPACT 2005 Section 1501: Small Refineries Exemption Study, at 12 (Jan. 2009) (“2009 DOE Study”);

Cong. Research Serv., Small Refineries and Oil Field

Processors, at Summary (Aug. 11, 2014) (“2014 CRS

Report”). Again, in this situation, a small refinery

must purchase costly RINs to comply.2

2 Many gas retailers have the capital and expertise to blend renewable fuels, so they can generate significant sums by selling

the RINs they create to regulated refineries. See Bernard L.

Weinstein, Maguire Energy Inst., S. Methodist Univ., Renewable

Identification Numbers (RINs) Trading Under the Renewable

Fuels Program: Unintended Consequences for Small Retailers, at

A small refinery might also be located in a remote

area with little local demand, requiring it to ship most

of its product by pipelines at additional expense to

reach a market. See 2014 CRS Report at 5; 2009 DOE

Study at 12. Pipelines, however, prohibit transportation of blended fuels, so these refineries have limited

ability to comply with the RFS through blending, short

of acquiring additional infrastructure downstream of

the refinery. See Suppl. App. 19a, 38a. And some small

refineries produce a higher percentage of diesel fuel

than gasoline, and thus their ability to blend is inherently limited. See App. 24a, 30a, 81a; 2011 DOE Study

at 34. These constraints again force heavy reliance on

purchasing RINs to satisfy the annual obligation. See

2011 DOE Study at 34. The cost of RINs can strain a

small refinery’s already limited resources.

For these reasons, RFS compliance could make it too

expensive for small refineries to stay in business. And

shuttering a small refinery affects not only that business, but also the individuals and communities that

rely on it. Small refineries often operate in rural locations, supplying quality jobs and resources to support

local communities. See generally Amicus Br. Wyoming

et al. in Support of Cert. 2-3, 10-16.

Applying RFS obligations to small refineries could

also reduce the Nation’s refining capabilities, undermining Congress’s energy-independence and nationalsecurity goals.3 For example, small refineries fre-

4 (Aug. 2016), https://www.heartland.org/publications-resources/publications/renewable-identification-numbers-rinstrading-under-the-renewable-fuels-program-unintended-consequences-for-small-retailers.

3 See S. Rep. No. 108-57, at 42 (2003) (statement of Sen.

Cornyn) (discussing a predecessor to the RFS program and explaining that “a decline in refining capacity …. is a direct result

quently provide an outlet for crude reserves that cannot economically be transported to more distant refineries. They also often serve small markets that are not

otherwise well connected to fuel-distribution networks, ensuring those markets obtain a steady supply

of reasonably priced transportation fuels.

Accordingly, “to protect these small refineries,” Sinclair, 887 F.3d at 989, Congress included a small-refinery exemption program in the RFS that has three

distinct phases. See 42 U.S.C. §7545(o)(9)(A)–(B). The

first two phases addressed the inception of the RFS

program, and are included within the subparagraph

entitled “Temporary exemption.” Initially, under subparagraph (A), Congress created a “[t]emporary exemption,” relieving all small refineries of any obligations under the RFS until 2011. Id. §7545(o)(9)(A)(i).

Second, Congress directed EPA to extend this initial

exemption for at least two additional years for any

small refinery where DOE found that compliance

would cause “disproportionate economic hardship.” Id.

§7545(o)(9)(A)(ii)(I)–(II).

The third phase addresses the operation of the RFS

after that initial period, and appears in a different subparagraph lacking the title or term “temporary.” In

subparagraph (B), Congress provided that a “small refinery may at any time petition” EPA “for an extension

of the exemption under subparagraph (A) for the reason of disproportionate economic hardship.” Id.

§7545(o)(9)(B)(i) (emphasis added). EPA must consult

with DOE and consider its recommendation and “other

of overburdening government regulations that make it too expensive for small refiners to stay in business … or that force refiners

to consolidate even further thereby eliminating refining capacity.”); H.R. Rep. No. 107-157, at 73–74 (2001) (Committee on

Ways and Means) (“it is appropriate to modify cost recovery provisions for small refiners” to reduce their compliance costs).

economic factors” to determine whether that refinery

has shown disproportionate economic hardship warranting an exemption. Id. §7545(o)(9)(B)(ii). EPA must

“act on any petition submitted by a small refinery for

a hardship exemption” within 90 days. Id.

§7545(o)(9)(B)(iii).

C. Regulatory Implementation

1. As Congress directed, DOE conducted a study to

determine whether small refineries would suffer disproportionate economic hardship (and thus receive at

least a two-year extension of the initial exemption). In

2009, DOE issued a report, concluding that small refineries did not need additional time because the ability to purchase RINs from third parties would effectively eliminate economic hardship.4

Members of Congress disagreed. An Appropriations

Committee report expressed dissatisfaction with the

2009 DOE Study, deemed it incomplete, and stated

that DOE should “reopen and reassess” it. S. Rep. No.

111-45, at 109 (2009). A conference report concurred.

H.R. Rep. No. 111-278, at 126 (2009) (Conf. Rep.).

DOE issued a new report in 2011.5 It reversed several key conclusions of the earlier report, and concluded that high compliance costs can lead to disproportionate economic hardship for small refineries.6 As

a result, the blanket exemption was extended to certain small refineries for two additional years under

§7545(o)(9)(A)(ii)(II).

2. EPA adopted regulations implementing the RFS

in 2010. See 75 Fed. Reg. 14,670 (Mar. 26, 2010). To

4 2009 DOE Study at 13.

5 2011 DOE Study at 1.

6 Id. at 2–3.

implement subparagraph (B), EPA adopted “a hardship provision” under which “any small refinery may

apply” for a “case-by-case” determination “at any time

on the basis of disproportionate economic hardship.”

Id. at 14,737. In its initial regulation, EPA defined the

eligible small refineries as those that did not exceed

the statute’s 75,000-barrel throughput threshold in

2006. See 42 U.S.C. §7545(o)(1)(K); 40 C.F.R.

§80.1441(a)(1) (2010).

In 2014, EPA amended its regulations and, among

other things, redefined the criteria for the hardship exemption. Initially, EPA proposed that, to qualify, a

small refinery must show that it remained below the

statutory 75,000-barrel throughput threshold “in 2006

and in all subsequent years.” 79 Fed. Reg. 42,128,

42,152 (July 18, 2014). In the final rule, however, the

agency reversed itself, concluding that its initial proposal “could unfairly disqualify a refinery from eligibility for small refinery relief based only on a single

year’s production since 2006.” Id. EPA “[did] not believe it would be appropriate to treat two refineries

whose recent operating conditions were equivalent differently if one refinery exceeded 75,000 [barrels per

day] in a single year as much as 8 years ago.” Id. Accordingly, the final rule required satisfaction of the

75,000-barrel throughput requirement for only the

year of the exemption and the immediately preceding

year. Id.; 40 C.F.R. §§80.1401, 80.1441(e)(2)(iii) (2014).

Years later, members of Congress again expressed

concerns with administration of the small-refinery

hardship exemption. In 2017, they criticized EPA’s

adoption of an economic-hardship standard requiring

small refineries to demonstrate that RFS compliance

would threaten their viability. See S. Rep. No. 114281, at 70 (2016); 163 Cong. Rec. H3327, H3884 (daily

ed. May 3, 2017) (statement of Rep. Frelinghuysen).

They explained that the RFS “does not contemplate

that a small refinery would only be able to obtain an

exemption by showing that the RFS program threatens its viability.” S. Rep. No. 114-281, at 70. Rather,

“Congress explicitly authorized the Agency to grant

small refinery hardship relief to ensure that small refineries remain both competitive and profitable.” Id.

II. BACKGROUND OF THE CASE

A. Factual Background

Petitioners owned and operated three small refineries that received the initial blanket exemption under

§7545(o)(9)(A)(i). Administrative Record Vol. 2 (10th

Cir. filed Mar. 21, 2019), ECF No. 10635063 (“REC2”)

at 638; REC2 at 665; REC2 at 687; REC2 at 733; see

App. 29a, 34a. Some also received the DOE extension

under §7545(o)(9)(A)(ii). REC2 at 638; REC2 at 665;

REC2 at 687; REC2 at 733; App. 29a, 34a. However,

they have not continuously received exemptions since

the initial exemptions expired.

The Woods Cross Refinery experienced severe economic hardship and thus petitioned for a hardship exemption for 2016. App. 32a. Wynnewood Refining

Company, LLC’s Wynnewood Refinery sought, but was

denied, an exemption in 2013; Wynnewood experienced severe hardship in 2017 and sought an exemption for its 2017 RFS obligation. Id. at 32a, 34a.

HollyFrontier’s Cheyenne Refinery sought an exemption for 2015. App. 29a. But, as with Wynnewood’s

2013 request, EPA denied the petition. Id. On appeal,

the Tenth Circuit granted EPA’s unopposed motion to

vacate that decision in light of Sinclair Wyoming Refining Co. v. EPA, 887 F.3d 986, which held that EPA

had adopted too stringent a standard for assessing disproportionate economic hardship. Id. at 999.

HollyFrontier’s Cheyenne Refinery experienced severe economic hardship during the 2016 compliance

year and petitioned for an exemption for that year.

App. 29a–30a.

The exemption applications for HollyFrontier’s refineries for 2016, and Wynnewood’s for 2017, explained the financial and structural factors causing

disproportionate economic hardship to each refinery.

Like other small refineries, they had structural constraints, such as limited blending ability, historically

low margins, lack of access to capital or credit, and lack

of other business lines. See App. 30a, 32a, 34a. Economic factors including losses and asset impairment,

and the high cost of purchasing RINs, exacerbated

these constraints, creating severe economic hardship.

Id. Indeed, some refineries were not profitable during

this period. Id. at 81a–82a. After consulting with DOE

and considering other economic factors, EPA granted

each of the requested exemptions. Id. at 30a–36a.

B. Proceedings Below

Several associations representing the renewablefuel industry sought review of the EPA orders extending exemptions to Cheyenne, Woods Cross, and

Wynnewood in the Tenth Circuit. Relevant here, the

associations argued that EPA could extend the hardship exemption only to small refineries that had received hardship exemptions each year since the RFS

program commenced. The Tenth Circuit agreed. App.

65a–75a. This holding, if applied nationwide, would

eliminate the exemption for most small refineries in

the United States, and ultimately cause virtually all

small refineries to lose the exemption.7

7 According to EPA data, only seven small refineries received a

hardship exemption in 2015. See EPA, RFS Small Refinery Exemptions tbl. 2, https://www.epa.gov/fuels-registration-reporting-

The Tenth Circuit rested its conclusion on one “common definition” of the term “extension.” App. 66a. Selecting among several alternative dictionary definitions, the court reasoned that the word “extension” in

§ 7545(o)(9)(B)(i) means “an increase in length of

time.” Id. at 65a–67a. According to the court, this definition of extension “along with common sense,” “dictate that the subject of an extension must be in existence before it can be extended.” Id. at 67a. Thus, “a

small refinery which did not seek or receive an exemption in prior years is ineligible for an extension.” Id.

The court further asserted that its chosen definition

of “extension” “meshe[d] with this statutory scheme,”

App. 66a, because Congress intended small refineries

to be “funnel[ed] … toward compliance over time,” id.

at 68a (citing Hermes, 787 F.3d at 578). Thus, “once a

small refinery figures out how to put itself in a position

of annual compliance, that refinery is no longer a candidate for extending (really ‘renewing’ or ‘restarting’)

its exemption.” Id.

The court acknowledged the inescapable result of its

conclusion: some small refineries facing disproportionate economic hardship will be forced to shutter because they cannot satisfy their RFS compliance obligations. According to the court, the RFS was meant “to

be aggressive and ‘market forcing.’” App. 70a. Despite

Congress’s energy-independence goals, the court

thought that Congress did not intend the hardship exemption to protect small refineries throughout the

RFS program, but merely to extend “small refineries a

substantial amount of time to adapt.” Id. In the Tenth

Circuit’s view, “a small refinery in 2016 or 2017 had

an ample opportunity” to “ponder … whether it made

and-compliance-help/rfs-small-refinery-exemptions (last updated

Feb. 18, 2021).

sense to … remain in the market.” Id. So, the court believed, if a small refinery had fulfilled its blending requirements for any single year without disproportionate economic hardship, but was unable to survive the

increased requirements imposed in any later year,

Congress intended it to close—while allowing otherwise identically situated refineries to receive exemptions and remain in business if they had needed the

hardship exemption in all prior years.

With respect to subparagraph (B)’s statement that a

small refinery may petition for extension of the exemption “at any time,” the Tenth Circuit acknowledged the

“expansive” nature of the word “any.” App. 72a. But in

its view, “even if a small refinery can submit a hardship petition at any time, it does not follow that every

single petition can be granted.” Id. Because petitioners

had not received uninterrupted exemptions up to the

year for which they petitioned, the court concluded

that EPA exceeded its statutory authority.8

The effects of the lower court’s decision are already

being felt. The price of RINs has increased sharply.

Cert. Pet. 29 & n.6 (citing EPA data). Marathon Petroleum Corporation announced it would shutter its small

refinery in Gallup, New Mexico, which is expected to

result in layoffs of the refinery’s 220 employees. And

HollyFrontier’s Cheyenne Refinery no longer produces

petroleum fuels. See id. at 30.

8 Although the Tenth Circuit concluded that the continuity requirement precluded petitioners from receiving an exemption, it

addressed other challenges to EPA’s determination of disproportionate economic hardship. It held that EPA’s economic-hardship

findings were not arbitrary and capricious, but remanded for EPA

to determine the extent to which petitioners could pass through

the cost of RINs. App. 85a–87a. This and other determinations by

the Tenth Circuit are not before this Court.

SUMMARY OF THE ARGUMENT

The RFS seeks to promote energy independence by

requiring refiners and importers of transportation fuel

to blend increasing amounts of renewable fuels into

their products each year. Congress recognized, however, that these mandates could drive small refineries

out of business, undermining its energy-independence

goal and harming small communities. Thus, Congress

established a bifurcated regime of small-refinery exemptions. Congress provided “temporary” exemptions

in the program’s early years, and further authorized

small refineries thereafter “at any time [to] petition

[EPA] for an extension of the exemption under subparagraph (A) for the reason of disproportionate economic

hardship.” 42 U.S.C. §7545(o)(9)(B)(i)

The Tenth Circuit, however, held that EPA had authority to grant small refineries a hardship exemption

only if they had received uninterrupted, continuous extensions of their exemptions every year since 2011—

an interpretation of “extension” that excludes nearly

all small refineries (including petitioners here). In the

court’s view, once a small refinery meets the RFS’s requirements in a single year, EPA can never again

grant it a hardship exemption, even if the refinery

faces disproportionate hardship based on the increased blending requirements of the next year. And

the only small refineries eligible for exemptions are

those that never fulfill the RFS’s requirements without

an exemption, a truly counterintuitive outcome.

Consideration of the full statutory context of

§7545(o)(9)(B)(i) makes clear that the Tenth Circuit’s

interpretation is wrong. See infra Part I. Starting with

the text, the dictionary definitions of “extension” include both an increase in the length of time and the

offering or making something available to someone,

such as the granting of a benefit. Both the U.S. Code

and this Court have used the term both ways. Significantly, moreover, in subparagraph (B)(iii), Congress

described the relief it authorized in subparagraph

(B)(i) simply as “a hardship exemption,” without reference to “extension.” This proximate characterization of

the exemption as a free-standing “hardship exemption” is compelling evidence that Congress used the

term “extension” in the latter sense, authorizing EPA

to grant an exemption whenever a small refinery experiences disproportionate economic hardship.

But even if “extension” means an increase in time,

the Tenth Circuit incorrectly imposed a continuity requirement. Once it exists, an exemption can be extended even if it lapses. Here, the statute granted all

small refineries initial exemptions at the time of enactment. It is entirely natural—and consistent with

the temporal definition of “extension”—to say that

small refineries whose exemptions have lapsed are

seeking an “extension” of their prior exemptions because they are experiencing hardship after an interlude during which they met the RFS’s requirements.

Additional statutory context militates powerfully

against construing the word “extension” to engraft a

continuity requirement onto the hardship exemption.

The statute’s authorization of a petition “at any time,”

its bifurcated structure, and its focus on a refinery’s

throughput “for a calendar year” are inconsistent with

a reading that disqualifies all small refineries that

cannot meet the RFS’s requirements for a single year.

These features of the statute also foreclose a reading

that would effectively sunset the hardship exemption.

The Tenth Circuit’s interpretation is also inconsistent with the “context of the statute as a whole.”

Sturgeon v. Frost, 136 S. Ct. 1061, 1070 (2016). The

RFS requirements increase annually, and the difficulty in meeting them necessarily varies substantially

from year-to-year based on market factors that small

refineries cannot control and may lack resources to address. Congress intended to pursue energy independence through support for renewable fuels, but recognized that imposing demands that could put small refineries out of business would both undermine energy

independence and harm numerous small communities. In this context, a bifurcated regime of initial temporary exemptions and ongoing hardship exemptions,

when needed, serves Congress’s purposes—while reading the statute to make hardship relief available only

to refineries never successful enough to meet the RFS’s

requirement does not.

Properly construed, the statute does not impose the

Tenth Circuit’s continuity requirement, and EPA did

not exceed its authority by extending hardship exemptions to petitioners despite prior lapses in their receipt

of an exemption. At the very least, EPA’s reading of

the statute, underlying both its decisions here and its

2014 eligibility rule, is reasonable and entitled to deference. See infra Part II.

ARGUMENT

I. THE STATUTE’S TEXT, STRUCTURE, AND

PURPOSE DEMONSTRATE THAT THE

HARDSHIP EXEMPTION IS AVAILABLE

“AT ANY TIME” A SMALL REFINERY EXPERIENCES

DISPROPORTIONATE

ECONOMIC HARDSHIP.

The statutory provision at the center of this case provides that “[a] small refinery may at any time petition

the Administrator for an extension of the exemption

under subparagraph (A) for the reason of disproportionate

economic

hardship.”

U.S.C.

§7545(o)(9)(B)(i). The Tenth Circuit held that small re-

fineries can petition for an “extension of the exemption” only if they qualified for the original blanket exemption and their exemptions have never lapsed. That

is not the best, let alone the only, reading of this text.

Indeed, when the provision is considered in the full

statutory context and in light of Congress’s purposes,

the statute unambiguously forecloses the Tenth Circuit’s reading, which strips EPA of discretion to afford

relief to small refineries that Congress sought to protect from disproportionate economic hardship.

The Tenth Circuit rested its interpretation primarily

on one meaning of the term “extension,” which the

court read to require an unbroken temporal stream of

exemptions from the program’s inception until the

year for which the small refinery seeks the exemption.

But the term “extension” is not so rigid. It can be and

frequently is used—by Congress, by courts, and in everyday speech—to mean the grant of a benefit without

any temporal connotation. It can also be used in a temporal sense to mean an increase in length of time, but

without continuity. Either of these accepted uses of

“extension” is textually permissible. Either makes

much more sense of the statute as a whole. And either

requires reversal of the decision below.

The Tenth Circuit’s narrow focus on its chosen definition of “extension” also misses the forest for the

trees. In subparagraph (B), in stark contrast to subparagraph (A), Congress used deliberately expansive

language, providing that a small refinery (defined

based on its throughput “for a calendar year”) could

petition “at any time” for relief that Congress itself

characterized as “a hardship exemption.” These surrounding statutory terms, along with the statute’s

structure, are much more naturally read as creating a

safety valve available whenever a small refinery experiences disproportionate economic hardship, rather

than a de facto sunset clause under which hardship relief is available only to the diminishing set of small refineries that have been continuously exempt since the

RFS program’s inception.

A continuity requirement also produces perverse results that defy any plausible reading of congressional

intent. Contrary to the Tenth Circuit’s assertion, there

is no reason to believe that Congress preferred to force

a small refinery suffering current economic hardship

to close—but only if the small refinery had managed to

comply with the RFS without an exemption in an earlier year. Congress knew that the program would impose escalating burdens each year, and there is no basis to believe it provided hardship exemptions only to

those small refineries that were continuously unable

to comply with RFS requirements, to drive out of business those that intermittently succeeded, or to create

incentives for small refineries to avoid achieving the

program’s goals for fear of forfeiting eligibility for future exemptions. Indeed, these arbitrary and perverse

results directly undermine Congress’s overarching

purpose to secure American energy independence.

Accordingly, the Court should reject the continuity

requirement the Tenth Circuit engrafted onto the statute. Disqualifying small refineries who face disproportionate economic hardship from seeking a hardship exemption based on an unnecessarily crabbed reading of

“extension” misreads the statute and contravenes Congress’s intent.

A. The Term “Extension” Does Not Limit

The Hardship Exemption To Small Refineries That Have Been Exempt Continuously.

The court of appeals hinged its statutory interpretation on its reading of the word “extension,” which it

construed to require temporal continuity. App. 66a–

67a. But in so holding, the court disregarded two additional ordinary meanings of the word—the making of

something available and a non-continuous increase in

time. Both make much more sense in the context of a

provision permitting small refineries to petition for “a

hardship exemption” “at any time.”

1. The term “extension,” standing alone,

has multiple possible meanings.

a. The core meaning of the noun “extension” is “the

action of extending or state of being extended.” Webster’s Third New International Dictionary (1986); see

also American Heritage College Dictionary (4th ed.

2007) (same). And the verb “extend” “lends itself to

great variety of meanings, which must in each case be

gathered from context.” Black’s Law Dictionary (6th

ed. 1990). In isolation, the words have a wide range of

possible meanings, two of which are relevant here: to

prolong and to make available. See Field v. Mans, 157

F.3d 35, 43 (1st Cir. 1998).

First, the verb “extend” can mean to “cause to last

longer.” New Oxford American Dictionary (3d. ed.

2010). Thus, as the Tenth Circuit observed, the noun

“extension” can mean “an increase in length of time.”

App. 66a; see also, e.g., Webster’s Third New International Dictionary (“an increase in length of time : increased or continued duration”). The words are used in

this sense, for example, when one says that a party received an extension of time to file a brief, or that a contractual term was extended an additional year.

Second, the verb “extend” can also mean to “offer or

make available.” New Oxford American Dictionary; see

also, e.g., Webster’s Third New International Dictionary (“to make available (as a fund or privilege) often in

response to an explicit or implied request: GRANT”);

American Heritage College Dictionary (“To make available; provide.”). Thus, the noun “extension” can mean

“the fact of giving or offering something to someone.”

Cambridge Online English Dictionary. The words are

used in this sense, for example, when one says that

someone was extended a job offer, or that a business

applied for an extension of credit.

Absent clarification from context, there is no a priori

reason to prefer the former meaning to the latter. Congress has frequently used the noun “extension” in the

latter sense. For example, in the Judicial Redress Act

of 2015, Congress enacted an “extension of privacy act

remedies” to citizens of certain foreign countries—citizens who had not previously enjoyed those remedies.

See Pub. L. No. 114-126, §2, 130 Stat. 282, 282 (2016).

Likewise, numerous statutes refer to the “extension”

of things like “benefits,”9 “privileges,”10 “assistance,”11

“protection,”12 “credit,”13 “access,”14 “recognition,”15

and “nondiscriminatory treatment.”16

This Court, too, often uses the word “extension” to

describe the making of something available to someone. For example, the plurality opinion in Barr v.

American Association of Political Consultants, Inc.,

140 S. Ct. 2335 (2020), described this Court’s prefer-

9 E.g., 22 U.S.C. §4061(a)(2), (a)(3); 43 U.S.C. §451b(c).

10 E.g., 15 U.S.C. §78l(f)(1)(E).

11 E.g., 38 U.S.C. §3748; 50 U.S.C. §2333(c).

12 E.g., 15 U.S.C. §§1141d, 1141e, 1141f, 1141g.

13 E.g., 18 U.S.C. §892; 42 U.S.C. §9601(20)(H).

14 E.g., 25 U.S.C. §3204(b)(3).

15 E.g., 32 U.S.C. §308(a); id. §310(b).

16 E.g., 19 U.S.C. §2434(c); id. §2437(c)(1).

ence for “the extension of benefits or burdens” to remedy equal-treatment violations. Id. at 2354. Similarly,

a dissenting opinion in Burwell v. Hobby Lobby Stores,

Inc., 573 U.S. 682 (2014), objected to the “extension of

religion-based exemptions to for-profit corporations.”

Id. at 755 (Ginsburg, J., dissenting). There are many

additional examples of this usage by the Court.17

b. When Congress authorized a small refinery to petition for “an extension of the exemption,”18 it could

therefore have used the word “extension” in its temporal sense, to mean a prolongation of the period of exemption (either continuously or not, see infra, pp.29–31),

or it could have used the word in its sense of making

available, to mean a grant of exemption from the RFS

program’s requirements. The dictionary definition of

“extension” alone cannot resolve that dispute; only

context can. Where, as here, the relevant statutory

term has multiple possible meanings, “the term standing alone is necessarily ambiguous and each section

17 See also, e.g., Sessions v. Morales-Santana, 137 S. Ct. 1678,

1700 (2017) (noting that “extension of benefits is customary in

federal benefit cases”); Golan v. Holder, 565 U.S. 302, 318 (2012)

(discussing the “extension of copyright protection to authors

whose writings …are in the public domain”); United States v. Virginia, 518 U.S. 515, 557 (1996) (discussing “the extension of constitutional rights and protections to people once ignored or excluded”); Zobrest v. Catalina Foothills Sch. Dist., 509 U.S. 1, 12

(1993) (discussing the “extension of aid” to students at religious

schools); United States v. Kimbell Foods, Inc., 440 U.S. 715, 719

n.3 (1979) (discussing the “extension of financial assistance to

small businesses”); Idaho Sheet Metal Works, Inc., v. Wirtz, 383

U.S. 190, 202 (1966) (discussing the “the extension of the retail

exemption to [certain] businesses”).

18 The “exemption” referred to is “the exemption under subparagraph (A).” 42 U.S.C. §7545(o)(9)(B)(i). Subparagraph (A), in

turn, grants small refineries an exemption from “[t]he requirements of paragraph (2).” Id. §7545(o)(9)(A)(i).

must be analyzed to determine whether the context

gives the term a further meaning that would resolve

the issue in dispute.” Robinson v. Shell Oil Co., 519

U.S. 337, 343–44 (1997); see also, e.g., Star Athletica,

L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002, 1010

(2017) (“[I]nterpretation of a phrase of uncertain reach

is not confined to a single sentence when the text of the

whole statute gives instruction as to its meaning.”);

Roberts v. Sea-Land Servs., Inc., 566 U.S. 93, 100–01

(2012) (using statutory context to construe a term

whose meaning “in isolation” was “indeterminate”).

Thus, contrary to respondents’ contention below, the

temporal use of “extend” in subparagraph (A)(ii)(II)

does not support the Tenth Circuit’s interpretation of

subparagraph (B)(i). The context—and not the dictionary definition—makes clear that “extend,” as used in

subparagraph (A)(ii)(II), involves temporal continuity.19 In that provision, Congress directed EPA to “extend the exemption under clause (i)” for any small refinery that DOE determined would be subject to disproportionate economic hardship “for a period of not

less than 2 additional years.” 42 U.S.C.

§7545(o)(9)(A)(ii)(II). Every potential recipient of the

extension contemplated under subparagraph (A)(ii)(II)

was a small refinery to whom the exemption had previously been extended—all small refineries were

19 Notably, Congress’s use of “extend” in subparagraph

(A)(ii)(II) draws upon both the “prolong” and “make available”

meanings of the term. Words with multiple meanings are often

used in ways that draw upon more than one of them. For example,

when one says that a person “extends” a hand to help someone

up, the usage draws upon both the spatial meaning of “extend”

and its sense of “to offer.” Likewise, when one grants a benefit to

someone for a certain period of time and subsequently “extends”

the benefit’s availability for an additional period, both the temporal and the “make available” meanings of “extend” are in play—

the benefit is made available for a longer time.

granted a blanket exemption until 2011, see id.

§7545(o)(9)(A)(i), so all small refineries in existence

would still have been exempt when DOE’s study was

due in 2008, see id. §7545(o)(9)(A)(ii)(I). Moreover,

Congress made clear that it envisioned a temporal extension of that preexisting exemption by its express

reference to “a period of not less than 2 additional

years.” Id. §7545(o)(9)(A)(ii)(II).

There is no reason, however, to assume that every

instance of the word “extend” or “extension” involves

temporal continuity. It is perfectly natural to say, for

example, that Congress authorized the extension of

unemployment benefits to workers impacted by

COVID-19, or that an employer extended to B the

same offer previously extended to A. Just as the meaning of “extend” in subparagraph (A)(ii)(II) is clarified

by its context, so too the meaning of “extension” in subparagraph (B)(i) is informed by its distinct context.

See, e.g., Barber v. Thomas, 560 U.S. 474, 484 (2010)

(“[T]he same phrase used in different parts of the same

statute [can] mea[n] different things, particularly

where the phrase is one that speakers can easily use

in different ways without risk of confusion.”); accord

Roberts, 566 U.S. at 108; Envtl. Def. v. Duke Energy

Corp., 549 U.S. 561, 574–76 (2007); Gen. Dynamics

Land Sys., Inc. v. Cline, 540 U.S. 581, 595–96 (2004);

United States v. Cleveland Indians Baseball Co., 532

U.S. 200, 213 (2001).

2. The “make available” meaning comports with the statutory text.

In concluding that “extension” in subparagraph

(B)(i) is used in its temporal sense, the Tenth Circuit

did not even acknowledge the “make available” definition. See App. 66a. That by itself was interpretive error, as the “existence of alternative dictionary definitions of” a statutory term, “each making some sense

under the statute, itself indicates that the statute is

open to interpretation.” Nat’l R.R. Passenger Corp. v.

Bos. & Main Corp., 503 U.S. 407, 418 (1992). As discussed below, the “make available” reading of “extension” best comports with the surrounding statutory

terms, including Congress’s express decision to permit

small refineries experiencing disproportionate economic hardship to petition for relief “at any time.”

Although the Tenth Circuit did not expressly

acknowledge the “make available” meaning, it made

two textual points that it may have—mistakenly—believed foreclosed it. First, it emphasized that Congress

authorized small refineries to seek “an ‘extension’ of

an exemption, as opposed to a free-standing exemption.” App. 78a; see also id. at 67a–68a. This, however,

ignores one of the most important textual clues in the

statute. In subparagraph (B), Congress described the

subject of a small refinery’s petition in two ways. In

subparagraph (B)(i), it called the petition a request

“for an extension of the exemption under subparagraph (A).” 42 U.S.C. §7545(o)(9)(B)(i). Just a few lines

later, in subparagraph (B)(iii), Congress referred to

the same petition simply as a request “for a hardship

exemption.” Id. §7545(o)(9)(B)(iii). That Congress used

these phrases interchangeably provides compelling evidence that the “hardship exemption” is exactly that—

a “free-standing” exemption available at any time

based on a showing of hardship.

Second, the court of appeals wrongly believed that

its interpretation was necessary to avoid “strip[ping]”

the word “extension” of “significant meaning.” App.

68a. Construing “extension” to mean a “grant” would

not do so. In both the U.S. Code and ordinary parlance,

when describing a formal request for something, it is

not uncommon to use the term “grant” when it could

be omitted without discernible change in meaning.

See, e.g., 47 U.S.C. §1455(b)(1) (authorizing applications “for the grant of an easement, right-of-way, or

lease to, in, over, or on” federal property); 20 U.S.C.

§4516(e) (authorizing universities to apply “for the

grant for an endowment”). The same is true of the word

“extension.” A person who applies for the “extension”

of a benefit is applying for the benefit. See, e.g., 12

U.S.C. §1795e(a)(1) (“A member may apply for an extension of credit from the Facility to meet its liquidity

needs.… The Board shall not approve an application

for credit without first” taking specified steps) (emphases added). That is how this subparagraph should be

understood—especially since Congress also described

the relief it authorized as “a hardship exemption.”

3. In the alternative, the temporal meaning of “extension” does not require

continuity.

Finally, even if Congress used the word “extension”

in its temporal sense of “an increase in the length of

time,” the court of appeals erroneously imported a continuity requirement. No dictionary definition the court

cited mentions any continuity requirement. That is because, while a time period can be “extended” without

interruption, that is not always the case. See Webster’s

Third New International Dictionary (“an increase in

length of time: increased or continued duration”) (emphasis added).

For example, a party whose time to file a brief has

already expired may petition for an extension of time.

See Fed. R. Civ. P. 6(b)(1)(B). A court might grant a

continuous extension (e.g., an additional 30 days from

the original deadline) or a non-continuous extension

(e.g., an additional 30 days from the date of the court’s

order). Either way, it is perfectly acceptable usage to

call the additional time an “extension.”

Similarly, it would not be incorrect or unnatural to

say, of a hypothetical tax benefit that was enacted in

2014 and expired in 2018, that “Congress in the most

recent tax bill extended its operation for an additional

two years, beginning in 2022.” Although the period of

the tax benefit’s operation is non-continuous, the new

tax bill nonetheless creates a temporal “extension”—

the tax benefit, which would have been operative for

four years, will now be operative for six. The original

tax benefit was thus “prolong[ed], enlarge[d], or

add[ed] to.” App. 75a.

Congress has used the term “extension” in this

sense. For example, in Section 203 of the Consolidated

Appropriations Act, 2021, Pub. L. No. 116-260, §203,

(2020), Congress provided for an extension of pandemic-related unemployment benefits that had expired on July 31, 2020, with the extension becoming

effective on December 26, 2020. Although the benefit

program had lapsed, and although Congress left a temporal gap in the program’s coverage when it extended

it, Congress captioned the provision “Extension of Federal Pandemic Unemployment Compensation.” Id.

Similarly, in Section 2114 of the CARES Act, Congress

provided for an “extension” of an unemployment benefits program for railroad workers that had expired in

2013, newly providing those benefits to a class of workers who received benefits from July 1, 2019 to June 30,

2020. Coronavirus Aid, Relief, and Economic Security

Act, Pub. L. No. 116-136, §2114 (2020).

The court of appeals rested its contrary conclusion

on its observation that “the subject of an extension

must be in existence before it can be extended.” App.

67a. But as the foregoing examples show, something

can be in “existence,” in the sense that allows us to talk

about its “extension,” even if its operation has temporarily lapsed. If—as with the refineries here—a small

refinery was once exempt from the RFS program’s requirements but is not currently exempt, the prior period of exemption did not cease to exist when the exemption lapsed. Accordingly, there is nothing unnatural about saying that the prior exemption was “extended”—i.e., caused to last longer—when EPA later

granted the refinery’s petition for an additional period

of exemption. The Tenth Circuit drew a bright-line distinction between “extended,” on the one hand, and “renewed,” on the other. See id. But the boundary between these words is not so ironclad; they can be and

are used synonymously. See Pa. Co. for Ins. on Lives &

Granting Annuities v. Rothensies, 146 F.2d 148, 152

(3d Cir. 1944) (“The word ‘renewal’ ... has been construed as synonymous with extension.”); Campbell

River Timber Co. v. Vierhus, 86 F.2d 673, 674–75 (9th

Cir. 1936) (collecting authorities “including federal decisions” showing “that the terms ‘extension’ and ‘renewal’ may be used interchangeably”).

Thus, even if a temporal reading of “extension” were

compelled, it would not follow that a small refinery

must have continuously received an exemption in

every prior year to qualify for an “extension of the exemption.” If Congress had meant to impose such a requirement, surely it would have done so in a more express and intentional way, and not left the matter to a

doubtful inference from the word “extension”—especially an inference that is contrary to the statute’s

structure and purpose. See infra, Parts B & C.

***

In sum, the centerpiece of the Tenth Circuit’s limiting construction—the phrase “extension of the exemption”—does not support the court’s conclusion that, to

be eligible for a hardship exemption, a small refinery

must have applied for and received an exemption for

every preceding year of the program. That phrase,

standing alone, can with equal if not greater plausibility be read to authorize EPA to extend the exemption

to any small refinery—or, at a minimum, to any small

refinery that received the initial exemption—that

demonstrates disproportionate economic hardship, regardless of whether it has been continuously exempt

since the beginning of the program.

B. The Surrounding Terms And Statutory

Structure Confirm That Congress Did

Not Impose A Continuity Requirement.

Because the term “extension,” in isolation, is susceptible to multiple interpretations, the question is which

reading makes the most sense in the context of the provision and the statute as a whole. See Roberts, 566

U.S. at 101; Graham Cty. Soil & Water Conservation

Dist. v. United States ex rel. Wilson, 559 U.S. 280, 290

(2010) (“Courts have a ‘duty to construe statutes, not

isolated provisions.’” (quoting Gustafson v. Alloyd Co.,

513 U. S. 561, 568 (1995)); Tyler v. Cain, 533 U.S. 656,

662 (2001) (“We do not … construe the meaning of statutory terms in a vacuum. … [but] ‘in their context and

with a view to their place in the overall statutory

scheme.’”) (quotation omitted).

Once the interpretive lens is appropriately widened,

the answer comes clearly into focus. Both the surrounding terms and the statute’s structure confirm

that Congress did not prohibit EPA from extending the

hardship exemption to small refineries that are currently suffering disproportionate economic hardship

simply because they have not been continuously exempt since the program began. The Tenth Circuit’s imposition of a continuity requirement adds a new eligibility criterion that Congress did not include in the

text and that reflects a highly implausible reading of

congressional intent.

1. “At any time”

a. Perhaps most significantly, Congress provided

that a small refinery could petition EPA for a hardship

exemption “at any time.” 42 U.S.C. §7545(o)(9)(B)(i).

The phrase “at any time” “suggests a broad meaning,”

because “read naturally, the word ‘any’ has an expansive meaning.” Ali v. Fed. Bureau of Prisons, 552 U.S.

214, 218–19 (2008) (alterations omitted) (quoting

United States v. Gonzales, 520 U.S. 1, 5 (1997)). This

expansive language cuts strongly against the Tenth

Circuit’s cramped construction, which adds to the existing statutory requirements to obtain an exemption

the requirement that a small refinery never have met

the RFS’s requirements without an exemption—even

though Congress expressly permitted small refineries

to petition for hardship relief “at any time.” The capacious and unqualified phrase “at any time” “must be

construed to mean exactly what it says.” Harrison v.

PPG Indus., Inc., 446 U.S. 578, 589 (1980).

That is especially so because Congress knows how to

incorporate time limits when it creates exemptions,

and did so in other amendments to the Clean Air Act.

See 42 U.S.C. §7411(j)(1)(E) (setting a maximum number of years beyond which EPA may not grant a

waiver). Indeed, sunset clauses are a statutory commonplace. When Congress creates them, it does so

with express temporal limitations that are the opposite of the “at any time” language used here. See, e.g.,

Republic of Iraq v. Beaty, 556 U.S. 848, 866 (2009) (explaining that “Congress has in other statutes provided

explicitly” that statutes “sunset on a particular date”).

Consistent with this general approach, when Congress intends to sunset a regulatory exemption, it does

so expressly. See, e.g., 42 U.S.C. §247d-7f(b); id.

§ 7625-1(b)(2); Pub. L. No. 116-127, §2202(e), 134 Stat.

178, 186 (2020); Pub. L. No. 109-364, §317(b), 120 Stat.

2083, 2142 (2006). Yet, without any comparable language here, and despite Congress’s express specification that small refineries may seek relief “at any time,”

the court below effectively read a de facto sunset

clause into the hardship exemption, rendering it of no

further force or effect once the exemption of the last

small refinery that has been continuously exempt

lapses. If Congress had intended the hardship exemption to sunset, it would have said so expressly—and

provided for an orderly winding down of the exemption

that does not arbitrarily distinguish between small refineries currently facing economic hardship based

solely on whether they had managed to comply with

the RFS in the past. See Roberts, 566 U.S. at 106 (rejecting interpretation that produced distinctions based

on “an arbitrary criterion”).

b. The structure of §7545(o)(9) reinforces that “at any

time” means exactly what it says. Congress bifurcated

the section into distinct subparagraphs, the first of

which is expressly denominated a “[t]emporary exemption,” and contains multiple express temporal limitations. Subparagraph (A)(i) provided that the initial

blanket exemption would remain in effect “until calendar year 2011.” 42 U.S.C. §7545(o)(9)(A)(i). Subparagraph (A)(ii)(I) set a December 31, 2008 deadline for

DOE’s study of the economic effects of RFS compliance

on small refineries. Id. §7545(o)(9)(A)(ii)(I). And subparagraph (A)(ii)(II) provided for extension of the exemption for a defined “period of not less than 2 additional years.” Id. §7545(o)(9)(A)(ii)(II).

Rather than folding the hardship exemption into

subparagraph (A), Congress began a new subparagraph, entitled “Petitions based on disproportionate

economic hardship.” And subparagraph (B) not only

conspicuously lacks the sort of temporal limitations

that appear in subparagraph (A), but uses the most

open-ended temporal authorization possible—“at any

time.” This striking textual and structural contrast

clearly signals Congress’s intent to decouple the hardship exemption under subparagraph (B) from the timebound relief afforded in subparagraph (A). At a minimum, if Congress had intended to tie the availability

of the hardship exemption under subparagraph (B) to

an unbroken stream of exemptions under subparagraph (A), this would have been a “surpassing[ly]

strange” way to do it. AT&T Corp. v. Iowa Utils. Bd.,

525 U.S. 366, 378 n.6 (1999).

The much more plausible inference is that Congress

had distinct purposes for these provisions and designed them to address distinct periods in which small

refineries might experience difficulty complying with

the RFS. Subparagraph (A) addressed the nascent

years of the program, in which Congress concluded

that small refineries needed a temporary period of initial relief to prepare their infrastructure and modify

their business plans. Subparagraph (B), by contrast,

recognizes that small refineries might face ongoing difficulties—difficulties that would not necessarily fade

with time, or be consistent across time, especially

given the ratcheting upwards of the volume obligation.

Congress thus authorized EPA to extend “a hardship

exemption” to small refineries “at any time” when they

experience disproportionate economic hardship.

c. Against all of this, the court of appeals offered two

responses, neither of which persuades. First, while acknowledging that “[c]ommon definitions of ‘any’ are indeed expansive,” the court reasoned that “even if a

small refinery can submit a hardship petition at any

time, it does not follow that every single petition can

be granted.” App. 72a. This misses the point. Of course,

a petition that fails to show disproportionate economic

hardship cannot be granted. And the Tenth Circuit

surely was correct that nothing in the statute precludes EPA from denying a “re-submitted extension

petition for an earlier year even though the agency had

previously denied that very petition.” Id. But this

hardly undermines the key point—that Congress is

unlikely to have written the statute as it did, with bifurcated subparagraphs and the expansive, unqualified phrase “at any time,” if EPA could not extend the

exemption to small refineries currently suffering from

disproportionate economic hardship simply because

they did not need or obtain an exemption in an earlier

year. The lower court has effectively read Congress as

giving small refineries the right “at any time” to file

petitions that can never be granted.

Second, the court of appeals asserted that the “at any

time” language “confers a substantial benefit upon

small refineries” by “exempt[ing] hardship petitioners

from the EPA’s annual percentages deadline.” App.

74a. But there is no basis for believing that Congress’s

sole purpose in saying “at any time” was to exempt

small refineries from the annual percentages deadline,

to the extent Congress had that issue in mind at all.

The point is not that the Tenth Circuit’s interpretation

would leave the phrase “at any time” without meaning

or effect. Rather, it is that Congress used deliberately

expansive temporal language that is inconsistent with

an intent to eliminate hardship relief for small refineries based on temporal considerations—whether it be

the filing of a petition after the annual percentages

deadline or the absence of an unbroken temporal

stream of prior exemptions.

2. “A small refinery”

Like Congress’s specification of when relief may be

sought, Congress’s specification of who may seek relief

evinces an expansive intent. Congress provided that

“[a] small refinery” may petition for a hardship exemption. 42 U.S.C. §7545(o)(9)(B)(i). Apart from requiring

disproportionate economic hardship, Congress did not

limit the class of small refineries eligible for a hardship exemption. The Tenth Circuit’s interpretation in

effect adds an eligibility requirement that Congress

did not include in the statute’s text: “A small refinery

that has continuously been exempt since the program’s

inception may at any time petition.…” If Congress had

intended to limit the hardship exemption in this way,

it could easily have said so. See Little Sisters of the

Poor Saints Peter & Paul Home v. Pennsylvania, 140

S. Ct. 2367, 2381 (2020) (the “fundamental principle of

statutory interpretation that absent provisions cannot

be supplied by the courts … applies not only to adding

terms not found in the statute, but also to imposing

limits on an agency’s discretion that are not supported

by the text”) (cleaned up). Indeed, when Congress

wanted to limit the class of eligible small refineries, it

did so expressly—as when it limited relief under subparagraph (A)(ii) to those small refineries that DOE

“determines under subclause (I) would be subject to a

disproportionate economic hardship if required to comply

with

paragraph

(2).”

U.S.C.

§7545(o)(9)(A)(ii)(II).

Congress’s definition of “small refinery” also is informative. “The term ‘small refinery’ means a refinery

for which the average aggregate daily crude oil

throughput for a calendar year … does not exceed

75,000 barrels.” Id. §7545(o)(1)(K). If Congress had intended to limit the hardship exemption to small refineries that have been continuously exempt every year

of the program, one would not expect the definition of

“small refinery” to turn on the refinery’s throughput

“for a calendar year.” Under the Tenth Circuit’s interpretation, if a small refinery’s annual throughput ever

exceeded 75,000 barrels, rendering that refinery ineligible for a hardship exemption in a particular year,

that small refinery would forever be ineligible, even if

its throughput never again exceeded 75,000 barrels.

Had Congress intended this unlikely result, one

would expect the definition of “small refinery” to reflect it. Congress could, for example, have defined a

small refinery as a “refinery whose aggregate annual

throughput has never exceeded 75,000 barrels.” Instead, Congress focused on throughput “for a calendar

year,” without regard to whether the refinery’s

throughput remained below 75,000 barrels in every

preceding year of the program. That definitional choice

underscores the unlikelihood that Congress intended

to forever disqualify small refineries from obtaining

future hardship exemptions if they were ineligible for

an exemption in a previous year.

3. “For the reason of disproportionate

economic hardship”

Finally, nothing in the nature of the factual predicate that Congress required for relief—“disproportionate economic hardship”—suggests that Congress confined the hardship exemption to small refineries that

have been continuously exempt throughout the RFS

program. To the contrary, as discussed below, and as

Congress undoubtedly understood, disproportionate

economic hardship can occur at any time, and it may

or may not be related to past disproportionate economic hardship—particularly given the program’s escalating compliance burdens over time and the variable nature of RIN prices. Again, if Congress had intended the Tenth Circuit’s interpretation, it could

have conveyed that intent clearly by writing, e.g., “for

the reason of continuing disproportionate economic

hardship.” Instead, it authorized small refineries to

petition for a “hardship exemption” “at any time”

based on a showing of current economic hardship.

C. The Tenth Circuit’s Continuity Requirement Is Inconsistent With Congress’s

Purpose for Both the Hardship Exemption and the RFS.

The Tenth Circuit concluded that interpreting the

term “extension” to impose a continuity requirement

furthered the RFS’s purposes. App. 68a–72a. It reasoned that its interpretation did so by “funnel[ing]

small refineries toward compliance over time.” Id. at

68a. The court believed that the RFS contemplated “a

‘temporary’ exemption for these entities ‘with an eye

toward eventual compliance.’” Id. (quoting Hermes

Consol., 787 F.3d at 578). “[O]nce a small refinery figures out how to put itself in a position of annual compliance, that refinery is no longer a candidate” for an

exemption. Id. And “a small refinery in 2016 or 2017

had an ample opportunity to study and understand”

what is required to comply with the RFS and “ponder … whether it made sense to … remain in the market in light of the statute’s challenging renewable fuels

mandate.” Id. at 70a.

The Tenth Circuit’s interpretation is fundamentally

at odds with the statute’s overall purpose and that of

the exemption itself. The statute is “much more sensibly interpreted” not to impose the Tenth Circuit’s continuity requirement. See Roberts, 566 U.S. at 102.

1. The Tenth Circuit’s view that the hardship exemption would eventually be rendered obsolete—because small refineries would all be funneled toward

compliance—is inconsistent with the text and the purpose apparent on the provision’s face. Congress gave

no indication that it believed the hardship exemption

would sunset after small refineries acclimated to the

RFS. To the contrary, Congress provided that a small

refinery could seek such an exemption “at any time.”

42 U.S.C. §7545(o)(9)(B)(i). And it did so while adopting a scheme that imposes escalating burdens on regulated parties to blend renewable fuels into their fuel

products. Congress prescribed particular volumes of

renewable fuels for each year through 2022, and in

each successive year that volume increases. Id.

§7545(o)(2)(B)(i)(I)–(IV). For instance, Congress required 4 billion gallons of renewable fuel to be

blended into U.S. fuels in 2006, but it mandated that

36 billion gallons be blended in 2022—a nine-fold increase. Id. §7545(o)(2)(B)(i)(I).

Congress thus set deadlines and time periods

within the RFS provisions of the CAA, but none for

the hardship exemption, which Congress instead

made available “at any time” so that it would provide

relief to small refineries when the intensifying statutory burdens created a need for it. The hardship exemption is accordingly designed as a safety valve, allowing EPA to grant relief to disproportionately affected small refineries as obligations become more

severe, and potentially more threatening to those refineries’ survival. This conclusion is further supported by the bifurcated structure of the small refinery’s exemption provisions (into temporary and

hardship exemptions). See supra, pp.34–35.

The Tenth Circuit stated that the “statute contemplates a ‘temporary’ exemption” for small refineries.

App. 68a. But the only exemption labeled “temporary”

is the one identified in subparagraph (A)—the blanket

exemption, potentially coupled with the additional

time based on DOE’s study. 42 U.S.C. §7545(o)(9)(A).

Separately, in subparagraph (B), applying after those

initial years, Congress adopted the hardship exemp-

tion and made it available “at any time” upon a showing of disproportionate economic hardship. The statute

nowhere suggests Congress expected this hardship exemption to become unnecessary over time; indeed, the

steadily intensifying burdens on regulated parties suggest the opposite. “Had Congress intended [that the

exemption would cease functioning], it most certainly

would have said so.” Credit Suisse Sec. (USA) LLC v.

Simmonds, 566 U.S. 221, 228 (2012).

2. The Tenth Circuit believed that its continuity requirement and the eventual elimination of hardship

exemptions would support the goals of “promoting biofuel production, energy independence, and environmental protection.” App. 70a. But while Congress

sought to encourage the production of renewable fuels,

it did so to support the United States’ “greater energy

independence and security.” See 121 Stat. at 1492. In

authorizing the hardship exemption, Congress balanced and supported renewable fuel production and

the continued survival of small refineries. See Rodriguez v. United States, 480 U.S. 522, 525–26 (1987) (per

curiam) (recognizing that legislation often reflects

competing values and generally does not pursue a single goal “at all costs”). Further, the hardship exemption promotes energy independence and security by

protecting domestic refining capacity. See supra, n.3.

Congress understood that “the RFS Program might

disproportionately impact small refineries because of

the inherent scale advantages of large refineries”—

basic structural impediments that do not diminish

over time—and enacted an entire subsection “to protect these small refineries.” Sinclair, 887 F.3d at 989;

42 U.S.C. §7545(o)(9). The Tenth Circuit’s blithe suggestion that Congress would have intended the RFS to

force some small refineries to shutter because under

the RFS it would no longer “ma[k]e sense” for them to

“remain in the market,” App. 70a, rather than enabling those small refineries to remain eligible for a

hardship exemption and thus maintain production, is

not a plausible understanding of congressional purpose. See Owasso Indep. Sch. Dist. No. 1 v. Falvo, 534

U.S. 426, 436 (2002) (when “Congress is not likely to

have mandated this result,” it is error to “interpret the

statute to require it”).20

3. The Tenth Circuit’s view that its interpretation

would help push small refineries toward a state of

“compliance,” App. 68a, further misunderstood the

RFS program and the economics of small refineries.

The RFS program demands that each regulated party

demonstrate its compliance annually; there is no single point at which a regulated party comes into a settled state of “compliance.” The burden on each regulated party changes each year, based on the escalating

requirements Congress imposed. See supra, p.7. And

compliance depends on a party annually generating

and/or purchasing sufficient RINs. See id.

Given that RFS compliance depends on numerous

factors unique to each year (and circumstances over

which the small refinery has no control), a continuity

requirement makes no sense. A small refinery’s ability

to demonstrate compliance in one year will not be dis-

20 As EPA explained to the Tenth Circuit, “Congress likely envisioned a more programmatic concept of relief” through the hardship exemption “that allows EPA flexibility to grant petitions at

its discretion ‘at any time’ that small refineries experience disproportionate economic hardship based on changes in the market,

the financial health of individual facilities, and ‘other economic

factors’ … as needed in future compliance years.” Respondent’s

Br. 32, Renewable Fuels Ass’n v. EPA, No. 18-9533 (10th Cir.

Sept. 20, 2019) (“EPA 10th Cir. Br.”) (quoting 42 U.S.C.

§7545(o)(9)(B)(i)–(ii)).

positive of its ability to do so in a future year, especially with escalating compliance obligations.21 Under

the Tenth Circuit’s reading, if there were two small refineries that would experience identical “disproportionate economic hardship” in 2021, but the first had

continuously obtained exemptions while the second

had not needed one in, say, 2015, the first refinery

could seek a hardship exemption but the second refinery would be ineligible. There is no reason—and certainly none provided by the Tenth Circuit—why Congress would have mandated that inexplicable result.

Cf. 79 Fed. Reg. 42,152 (EPA concluding that it would

not “be appropriate to treat two refineries whose recent operation conditions were equivalent differently”

merely based on past eligibility).

The court of appeals also failed to appreciate the

structural constraints facing small refineries. As

DOE’s study explained, “[l]arge refiners have options

available on a scale well beyond those available to

smaller refiners.” 2011 DOE Study at 23. Larger refineries are often able to integrate operations, allowing

them to “more easily obtain financing for blending facilities,” or “accommodate their needs efficiently and

shift emphasis from one sector to another as opportunities indicate.” Id. Thus, “RFS[] compliance costs for

21 EPA explained below that a continuity requirement “‘could

unfairly disqualify a refinery from eligibility for small refinery relief based only on a single year’s production since 2006.’” EPA

10th Cir. Br. 33 (quoting 79 Fed. Reg. at 42,152). EPA further

emphasized that a continuity requirement “would disqualify

many small refineries from eligibility for a hardship petition no

matter how disproportionate their economic burden in a given

year after 2006. Congress did not intend so narrow a safeguard.”

Id. And since 2010, EPA has taken the view that the RFS “authorizes EPA to grant an extension for a small refinery based

upon disproportionate economic hardship, on a case-by-case basis.” 75 Fed. Reg. at 14,737.

the larger refiner may be a small part of overall operating costs.” Id. Small refineries, by contrast “are more

limited in their options.” Id. “They face a number of

challenges and access to capital is generally limited or

not available.” Id. This can hamper their ability to

build the infrastructure needed to blend biofuels into

their fuels. And “[e]ven when capital is available, they

may have to choose between making substantial investments in blending and investing in other needed

facilities to improve operating efficiencies to remain

competitive.” Id. Small refineries also face other constraints that may arise from serving a niche market,

needing to ship via pipeline, or heavy diesel production. See supra, p.10. In a “lower refining margin environment”—which many small refineries face—the regulatory costs of the RFS can “have a material effect on

small refinery profitability.” 2011 DOE Study at 23.

Because small refineries face these structural constraints, they are especially susceptible to changes in

economic conditions for a given year. This vulnerability is magnified because the compliance program

erected by EPA is based on a market-trading system,

and the price of RINs—on which small refineries often

must rely heavily for compliance—can fluctuate radically from year to year. See 2018 RFS Volume, 82 Fed.

Reg. at 58,520 (fig.VI.B.2-1) (showing a 3 or 4 fold increase or decrease from one year to another). Thus, critically, the lower court’s holding could have a small refinery lose its exemption forever if RIN prices happen

to drop in a year—and thus be ineligible for hardship

relief when RIN prices skyrocket the next year—even

though the refinery has no control over RIN prices. Indeed, as noted, the price of RINs increased sharply following the Tenth Circuit’s decision. See supra, p.17. It

is implausible that Congress intended to confer or

withdraw a hardship exemption for all future years

based on such uncontrollable market movements.

The ongoing COVID pandemic offers a timely example of how unique conditions might severely affect a

small refinery, and shows that the lower court’s “continuity” requirement is irrational. The pandemic has

caused a steep drop in demand for transportation

fuel.22 During this period, RIN prices have shot up

(some as much as 100% since January 2020).23 The

unique vulnerabilities of small refineries render these

market pressures acute because small refineries lack

the ability their larger competitors have to offset such

economic difficulties in a particular year. Given the

difficulties small refineries face and the unpredictable

and uncontrollable circumstances that might arise

from year to year, Congress sensibly gave EPA the

ability to grant small refineries a hardship exemption

at any time when circumstances warrant it.

Reading the hardship exemption provision to preserve EPA’s authority to address the changing conditions and constraints on small refineries is thus consistent with the statute’s overall goal of ensuring energy independence and the hardship exemption’s specific goal of preserving small refineries. Sturgeon, 136

S. Ct. at 1070 (individual provisions should be interpreted in the “context of the statute as a whole”). A

continuity requirement undermines these goals, severely curtailing—and ultimately eliminating—the

mechanism Congress adopted to ensure that the RFS’s

22 Erwin Seba & Laura Sanicola, Oil Refiners Face Reckoning

Demand

Plummets,

REUTERS

(Apr.

2020),

https://www.reuters.com/article/us-health-coronavirus-refineryruncuts/oil-refiners-face-reckoning-as-demand-plummetsidUSKBN21K0C8.

23 See

EPA, RIN Trades and Price Information,

https://www.epa.gov/fuels-registration-reporting-and-compliance-help/rin-trades-and-price-information (last visited Feb. 18,

2021) (displaying RIN prices for 2020).

ever-increasing burdens do not crush small refineries.

The Tenth Circuit’s interpretation is irreconcilable

with a proper understanding of the statute’s purposes.

II. EPA’S REASONABLE INTERPRETATION

OF THE HARDSHIP EXEMPTION IS ENTITLED TO DEFERENCE.

“[A]fter applying traditional tools of interpretation,”

SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1358 (2018),

Congress’s intent is clear: the statute does not impose

the Tenth Circuit’s continuity requirement. That

should end the matter, “for the court, as well as the

agency, must give effect to the unambiguously

expressed intent of Congress.” Chevron U.S.A., Inc. v.

Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43

(1984); see Nat’l Ass’n of Home Builders v. Defenders

of Wildlife, 551 U.S. 644, 666 (2007) (“In making the

threshold determination under Chevron, a reviewing

court should not confine itself to examining a

particular statutory provision in isolation. Rather, the

meaning—or ambiguity—of certain words or phrases

may only become evident when placed in context.”)

(citation omitted; cleaned up); Roberts, 566 U.S. at 113

n.12 (deference unnecessary because term was

unambiguous in context). To the extent ambiguity

remains, however, this Court should defer to EPA’s

reasonable interpretation.

There is no question that Congress granted EPA

authority to resolve ambiguities in the RFS provisions

of the CAA. See 42 U.S.C. §7601(a)(1); United States v.

Mead Corp., 533 U.S. 218, 226–27 (2001). The only

question is whether the interpretation underlying

EPA’s actions here—that a small refinery may receive

a hardship exemption even if it lacks an unbroken

stream of prior exemptions—was promulgated in an

exercise of that authority. See Mead, 533 U.S. at 227.

It was—in EPA’s 2014 eligiblity rule.

In the 2014 eligiblity rule, EPA revisited the issue of

which years matter in assessing whether a refinery is

a qualifying “small refinery” by virtue of not exceeding

the daily 75,000-barrel throughput threshold “for a

calendar year.” 42 U.S.C. §7545(o)(1)(K). In the

proposed rule, EPA proposed to require a petitioner to

show that it did not exceed the 75,000-barrel threshold

“for all full calendar years between 2006 and the date

of submission of the petition for an extension of the

exemption.” 78 Fed. Reg. 36,042, 36,064 (June 14,

2013). A commenter from the biofuels industry

supported this approach, arguing it was mandated by

the term “extension,” which, the commenter

contended, demonstrated that “Congress did not

intend for small refineries to enter in and out of the

program, even in the face of subsequent economic

distress.” Comments of National Biodiesel Board at 8–

9 (July 15, 2013), EPA-HQ-OAR-2012-0401; see also

id. at 8 (asserting “the statute provides for a one time

extension, not an ongoing ability to seek relief”).

In the final rule, however, EPA rejected its original

proposal. “After further consideration,” EPA concluded

that requiring small refineries to satisfy the 75,000barrel requirement for every year of the RFS program’s life “could unfairly disqualify a refinery from

eligibility for small refinery relief based only on a single year’s production since 2006.” 79 Fed. Reg. at

42,152. The agency “[did] not believe it would be appropriate to treat two refineries whose recent operating conditions were equivalent differently if one refinery exceeded 75,000 [barrels per day] in a single year

as much as 8 years ago.” Id. Instead, EPA decided a

petitioner need show only that it satisfied the 75,000barrel requirement for the year in which the hardship

exemption was sought and the immediately preceding

year. Id. This approach, the agency concluded, would

“better address [its] primary concern from proposal of

treating refineries with similar performance the

same,” and would be “most appropriate given the objectives of the provision.” Id.

The 2014 eligibility rule thus necessarily embodied

EPA’s conclusion that a small refinery that did not

qualify for a hardship exemption in a previous year

(because it exceeded the 75,000-barrel threshold) could

nevertheless obtain a hardship exemption in later

years. That conclusion is incompatible with the Tenth

Circuit’s interpretation—advocated in the above-described comments supporting EPA’s rejected proposal—that the word “extension” means that a single

year of ineligibility forever disqualifies a small refinery from receiving a hardship exemption. Because

EPA’s conclusion that a prior year of ineligibility does

not forever disqualify a small refinery from obtaining

a hardship exemption was a “necessary presupposition” of the 2014 rule, EPA’s interpretation is entitled

to Chevron deference. See Nat’l R.R., 503 U.S. at 420.

In National Railroad, for example, this Court deferred to the Interstate Commerce Commission’s interpretation of the term “required,” even though “the ICC

did not in so many words articulate its interpretation

of the word ‘required.’” Id. Chevron deference was appropriate because “the only reasonable reading of the

Commission’s opinion, and the only plausible explanation of the issues that the Commission addressed after

considering the factual submissions by all of the parties, is that the ICC’s decision was based on the proffered interpretation.” Id.

So too here. EPA’s decision to drop its proposed requirement of continuous eligibility from 2006 forward,

its rejection of the commenter’s position, and its reasoning in the rule’s preamble all make clear that the

availability of the hardship exemption to small refineries despite a lapse in a prior year was a “necessary

presupposition” of the 2014 rule. See id.; see also, e.g.,

In re FCC 11-161, 753 F.3d 1015, 1115 (10th Cir.

2014); Sherley v. Sebelius, 644 F.3d 388, 395 (D.C. Cir.

2011) (applying National Railroad).

The Tenth Circuit declined to defer because, in its

view, “[t]he 2014 Small Refinery Rule establishes who

may seek an extension of an exemption, but it does not

resolve what constitutes a valid extension,” App. 78a,

or “explain or resolve any ambiguity with respect to

the statutory definition of ‘extension,’” id. at 80a. But

the 2014 rule indisputably rests on the premise that a

small refinery that was ineligible for a hardship exemption in a prior year may still receive a “valid extension” of the exemption in a later year, and thus necessarily rejected the Tenth Circuit’s interpretation. If

EPA had accepted that reading of “extension,” as expressly urged during the comment period, then EPA’s

limitation of the 75,000-barrel requirement would

have been a futile gesture. As EPA explained, that limitation was designed to prevent “unfairly disqualify[ing] a refinery from eligibility for small refinery relief based only on a single year’s production since

2006,” and to avoid inequitable treatment of “refineries whose recent operating conditions were equivalent”

based on a refinery’s ineligibility “in a single year as

much as 8 years ago.” 79 Fed. Reg. at 42,152.

Under the Tenth Circuit’s interpretation, however,

the unfair and inequitable treatment EPA sought to

avoid is unavoidable—once ineligible for even a single

year, a small refinery is forever disqualified from future relief. Thus, the only reasonable reading of the

2014 rule is that EPA rejected that interpretation of

the statute. See Nat’l R.R., 503 U.S. at 420.

Because EPA, in an exercise of its rulemaking authority, construed the statute to permit a small refinery to receive a hardship exemption despite one or

more prior years of ineligibility, and because, for all

the reasons described above, that reading is consistent

with the statute’s text and eminently reasonable, this

Court should defer to EPA’s interpretation.

CONCLUSION

For these reasons, the Court should reverse.

Respectfully submitted,

MELISSA M. BUHRIG

CVR ENERGY, INC.

2277 Plaza Drive

Suite 500

Sugar Land, TX 77479

(281) 207-3200

mmbuhrig@cvrenergy.com

Counsel for Wynnewood

Refining Co., LLC

PETER D. KEISLER*

RYAN C. MORRIS

ERIC D. MCARTHUR

PETER C. WHITFIELD

CHRISTOPHER S. ROSS

ALICE A. WANG

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

pkeisler@sidley.com

Counsel for HollyFrontier Petitioners

February 22, 2021

* Counsel of Record

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.