Trump administration seeks more time to respond to court ruling on biofuel waivers

By Stephanie Kelly

By Stephanie Kelly

(Reuters) - The Trump administration has requested an additional two weeks to respond to a federal court ruling that questioned the legitimacy of its controversial biofuel waiver program for oil refineries, according to a court filing.

The request could prolong a period of uncertainty over the future of a program that has saved the refining industry tens of millions of dollars per year in regulatory costs, but which has infuriated biofuels companies and corn farmers who believe it undercuts demand for ethanol.

The Department of Justice told the 10th Circuit Court of Appeals in a filing dated March 6 that the court's January decision could have "significant practical impacts" on the U.S. Renewable Fuel Standard, and asked that the court extend its deadline to respond from March 9 to March 24. The RFS requires refineries to blend billions of gallons of biofuels into the nation's fuel poll, or purchase credits from those that do.

At issue is the court's ruling in January that the U.S. Environmental Protection agency had overstepped its authority by issuing waivers to refineries, exempting them from their obligations under the RFS, even though they had not received them in the previous year. The court said the RFS requires any waivers issued after 2010 to take the form of "extensions".

If allowed to stand and applied broadly, the ruling would significantly reduce the number of waivers the EPA can grant.

The case has once again placed Republican President Donald Trump squarely between two warring constituencies, the oil industry and the Big Corn lobby.

The administration had initially intended to respond to the court decision by scaling back the waiver program. But a major campaign this week by senators representing oil states, including Senator Ted Cruz of Texas, helped push the administration to shift course and consider an appeal.

Farm groups, biofuel trade associations, and industry advocates responded in kind by pressuring the administration to stay the course. Senator Joni Ernst of Iowa, a supporter of biofuels, spoke with President Donald Trump on Friday about the matter, a source familiar with the discussion said.

One of the largest U.S. oil and gas lobbying groups, the American Petroleum Institute, also criticized the move to appeal, in a rare public split over the issue with the American Fuel and Petrochemical Manufacturers, which represents more merchant refiners.

Since the adoption of the RFS, the Environmental Protection Agency has granted waivers to small refiners if they prove compliance would cause them financial distress. The Trump administration has roughly quadrupled the number of exemptions since it took office in January 2017.


(Reporting by Stephanie Kelly in New York; Writing by Richard Valdmanis; Editing by Matthew Lewis and Diane Craft)