case number nineteen destine twenty three at all griffin energy petitioner versus environmental protection agency and or wheeler i mean straight standard program congress prescribed increasing national renewable fuel volume acquirements to as this court has put it force the market to use greater and greater volumes of the new book fuel each year and each year obligated to set national percentage standards that are reasonably calculated to force obligated parties to use the required amount for nubile fuel this duty stems from congress's command th ensure that the vinyl quartus are met and the duty to engage in reasoned decision making which includes considering all important aspects of the problem and rationally basing the decision on the evidence for it in certain circumstances determine that the percentage obligation shall not apply to individual small refineries when it grants such exemptions without adjusting the national standards to account for them e p a creates this court said  rule the agency said that if any small refinery exemption for two thousand and eleven are approved after this final rule making the parties would be example we would not intend to modify the apical percentage standards and announce new standards for tw age they want to say periodic revisions to the standards to reflect waivers issued to small refiners refiners would be inconsistent with the statutory text and would introduce an undesirable level of uncertainty for obligated parties and so since the agency spoke in terms of  contrary approach being inconsistent with the statutory tax and just put to one side for a moment that starting in two thousand and twenty a different approach was adopted but in terms of the lay of the land as of two thousand and eleven and in the intervening years including and nineteen the agency had said that a different approach quote would be inconsistent with the statutory text close quote and so the question obviously arises did challenge of the kind that you are now asserting need to be brought within sixty days of the rendering of that interpretation in two thousand and eleven the answer is no and there are a lot of reasons for this i would start with the fact that what he said was inconsistent with the statute is not at all what we're asking for what it said was inconsistent was modifying the standards after they've been set in the course of the compliance year and we're not requesting that we're not saying that if you do that e p a also interpret it as regulation at that time to permit it to cow only for the exemption that it already granted before finalizing the regulation or the standards but the regulation didn't require that was just an interpretation e p a adopted in the course of that standard way interpretation is the regulation for purposes of timeliness you can challenge it at that point but you can't challenge it later it wasn't only in twenty million one hundred and twelve thousand and eighteen the agency said e p a is maintaining its approach to any exemptions for two thousand and eighteen that are granted after the final rule is released will not be reflected in the percentage standards so that some directly what you are asking that anything that any exemptions be reflected  and i don't understand the time in this question the fact that it's an interpretation of a regulation course interpretations can be changed regulations can be changed but you have to challenge the agencies told you what they thought the regulation meant  that's the time to challenge it well there are additional reasons why i don't think it's time for one thing there were other ways it could have done what we were asking without touching its interpretation of the regulation that could flow through because it has discretion to determine how much of the sudden loss we're able to apply the advance and so requirements could've increased the standards by adding by the amount of prior exemptions which is something it never spoke to but something that is effectively done in the past to deal with other shortcomings and perhaps most importantly an additional reason i would direct the court to its own decision in the f t m case and the long obligations that apply every time it acts and what if the m and a law and recognize that if you're arguing that a p failed in those duty that even if that challenge implicates the validity of some old policy or regulation that you can't challenge directly the challenge to the standards is still timely and i would if i may have read a key passage from may have yams which the was time part of the policy was adopted many years earlier but then the court said the challengers quote have not explained how any change in the policy would have required the agency also to change its propose fifty four after the court held that certain challenges to the point about weakish and rule from two thousand and ten were time barred the court held that had that it very similar challenge was not time part because the challenge was that if you had to reassess the point of a geisha each year under the statute what we're saying is that the standards e p a set for two thousand and nineteen were invalid on their own because they do not satisfy the duty to ensure and the duty to engage in reason this is making both a good supply every time e p a sets the standards if you can't define a legal obligation outside the scope of the rule making or disregard it just because it addressed it in an interpretation some years earlier can i ask a question this way so it seems like there are two possible bases for an argument that the challenge is on timely one is to say that back in two thousand and eleven and here i'm focused on two thousand and eleven not on things the agency said subsequently that in two thousand and eleven the agency rendered an interpretation of the statute and once again renders interpretation the statute that has to be challenged within sixty days and then any saw any challenge to that interpretation after sixty days another way to look at it is to say well no the real issue is the interpretation of the regulation and with respect to the interpretation the regulation and rendered interpretation at one point and i kept reiterating that same interpretation of the regulation with the laws to put aside the statutory want to just think about the regulatory one for now the one the judge garland raised so with the with the regulatory interpretation if you had says every year we're maintaining our approach then the does in your view intersect with your claim such that they enter petition as frozen in time going forward as or as what the agency saying were interpreting the regulation in the sense that we're going to apply it this way for this year but that doesn't not adopting an official binding interpretation of the regulation it was just saying right now we're going to do what we did last year and it kept saying that we're going to do what we did last year it in the twenty one thousand dollars remaining as well so i think that this is on the table every year it was not binding it certainly isn't entitled to any deference i don't even think it's consistent with the plain language of the regulation but we think that our challenge is fully timely for a variety of these reasons the regulation interpretation was an official and binding there are other ways to deal with it without altering the interpretation and in any event there is a current duty to ensure and to engage in reasoned decision making which is  timely claim under f p m and alon when you say there is no difference they approach was a review of the refute refusal to reconsider which the court certainly indicated was even more deferential than a normal review of agency rules and that right that was the part of the case that was held well there were a number of different but related challenges and so the court held that a challenge to the original two thousand and ten point of obligation little with time barred a challenge to a to the determination as to whether it is appropriate to reconsider the point of obligation in the context of an annual biometric rulemaking is reviewable for abuse of discretion ok well that's deferential script when you say without deference i'm not sure what you mean by that i'm just saying that if you want to understand whether that regulation precludes the relief adjustment that we're seeking even though it's a adopted an interpretation that did preclude it we don't think that that interpretation was correct in that interpretation is incorrect if the plain language of the regulation permitted exactly what we have subsequently amended the regulation to permit what we're requesting we don't think it was necessary because the regulation always permitted that it just wasn't doing if it was not doing that so i don't just look because about the so so if if the argument is that the interpretation of the regulation was incorrect then it seems like the perfect time to challenge the interpretation the regulation is incorrect is that the is around the time that the interpretation was rendered why does the fact that you think it's incorrect mean that of itself means there is no time when this issue i apologize i wasn't trying to suggest ok that's an answer for that time bar i just want to be clear that we don't think that that regulation precluded the release that we were asking the p a to provide want to clear that should the court agree with us that if he did need to adjust the standards to account for the exemptions that it's imperative that the court direct e p a to actually do that on obligation to do so that's incorrect under this court's decision in monroe energy and we are a but i think it's the same situation here where e p a is set a lower than permitted standard we're always going to have this problem  is going to be a make up in the future that has to be permissible otherwise judicial review will be meaningless and so i think it's imperative that the court provide some guidance and direction to actually remedy the invalid the low percentage adjust future standards to account for the exemptions that it's disregarded in setting the volume requirements there are certainly some mechanical details to work out about how to do that and i'm  not asking the court to wade into those technical issues but just to make clear that he can't do nothing which is its position with respect americans for clean energy that it can do literally nothing to remedy of violation held by this court well i wondered whether your remedy then has some sort of time frame in mind it would be nice to do it by the time of the next annual standard setting ideally and i don't mean to be particularly difficult it's just a mathematical computation the word thank you thank  mr land presented the e p a must account for retroactive small refund exemptions if the court agrees it need not reach produces united's separate issue but if it disagrees there is still another problem with the way the e those that you face decision to grant twenty one thousand exemptions retroactively in the st place is arbitrary and consistent with the r f s retroactive exemptions granted during or after the compliance year have no place in the r f s which sets out prospective annual mandates designed to promote increased renewable fuel use retroactive exemptions up in that system by eliminating refiners obligations after the annual percentages are set and even if there are some ambiguity in the abstract about whether e p a could issue retroactive exemptions it is surely on lawful here and that is because e p a decided in the twenty one thousand dollars rule to continue granting retroactive exemptions when it knew that would not account for them and that those exemptions would therefore before the court and that this is wrong for three reasons some of them overlap with some of the procedural issues we just discussed but i think it's important to emphasize that each case decisions about granting retroactive exemptions are made only in the context of particular annual rules the court has already mentioned that in two thousand and eleven e p a made some determinations about this for the st time but these are particular methodology used that  annual standards as recently as two thousand and eighteen e p a made clear in the f p m case they it applies its methodology in these annual standards only to that particular year and actually argued that it's methodology for another issue was only a exemption you're not challenging any particular exam and having been granted and in the previous producers united case we emphasize that we're not challenging any specific is to extend the time because they were grounds arising after but the nature of i'm not interested in the question of whether this collateral stop will hear i'm interested in the timeliness question and the court said that by not asking for an exemption  challenging as specific exemption and because there was no nothing it arising after within that time you were out of time so i don't i'm still not following why that case doesn't tell us that your challenge here is untimely but you know are we are really really stingy about reopening six and the agency is pretty clear not reopening anything so your honor i think you can look at it both ways i think primarily this is something that and ten and then again in two thousand and eleven as something that's a position in stone then i think you can consider this as a reopening and part of the reason is going back to e t s change and its treatment of smaller finer exemptions that only became apparent in the middle two thousand and eighteen it's dramatically expanded the program in a way that's that's the half terrorizing argument that you made and that's a line that was rejected and still having to wait until pill to long after the after rising evidence occur you're right i think that is that is true with respect to the grounds arising after argument where the comment has not been presented and under the clean air act you have to have a specific grounds arising after ground if you have not commented on the rule making in order to have preserved that comment not sort of a preservation issue but simply with respect to the broader issue of whether this is presented this year producers united has made ample comments other parties have made the and so that aspect was before the agency i think there's a separate question as to whether standards that something where it is exhibiting a decision to examine its croce and maintain that approach so the agency is making that determination and putting it back at issue and i think it's something that needed to wrestle with and white of its duty to ensure th annual standards are met and particularly in the light of the increasing number of gallons that are exempted from the renewable fuel standard program as a result of the dramatically expanded system of smaller finer exemptions american petroleum institute which looked at application of the same provision section seventy the statute let me explain why we are producers of cellulosic electricity fuel if you drive a failed to count any electricity fuel actually being produced by our members in real time and being used as transportation fuel the government now argues that e p a counts rin credits not biofuel production but the statute section seventy speaks to biofuel production not rins this is the converse of the american petroleum institute case where the agency  overcounted fuel production for policy reasons but e p a is making the same mistake by focusing on rent credits rather than fuel production and other technical had regulatory issues that are mentioned other precedent the result here i want to emphasize is devastation for electricity producers shuttered plants in clips and financial losses for investors that relied on calculation of biofuel production which is what the statute requires i'd be happy to answer any questions i do want to make less but one last point we feel compelled to address the government's suggestion in its read that applying the statute literally would result in quote havoc and that's it  concept or the notion that there is a burden on any parties is not in the record it's only in the government's brief and that's for a good reason because there is no scenario in which obligated parties w approach since two thousand and eleven to calculate the percentage standards petitioners challenge to this interpretation and this approach is untimely because of the clean air act sixty  before the date of the standard but not those after work and e p a has consistently taken better perch in every year sense but is but is it is it the fact that in two thousand and eleven there's a statement about what would be consistent or inconsistent with the statutory t or is it something in two thousand and eleven and in subsequent years that interpreted the regulation i think both the fact that in two thousand and eleven and d p s set that it was interpreted in the form you have to account for certain exemptions and not through others and as well as well as a statement that not turning over approach would be inconsistent with the statute but they seem like different arguments because one of them is about our interpretation that says that if we do anything different it would eleven we said in our rule that if we do it in a different way you would be inconsistent with the statute and as so we had no freedom to do anything different unless we changed our interpretation on that score and once we render that interpretation of the statute the challenge had to be brought to that interpretation within sixty days but another way to do it is to say no really the instrument that renders this untimely is that we were interpreting the regulation and the regulation we thought required us to do it this way to disk to not take account of these retroactive exemptions we said that in two thousand and eleven we said it again in subsequent years and all we were doing in subsequent years was just reiterating it but that's our interpretation of the regulation and once we render that interpretation the regulation that had to be challenged within sixty days  exemptions and not for others and yes taken back interpretation of the regulation ever since so if you p a rendered interpretation of the regulation and it said not that we interpret the regulation only in this way that it compels us to do the following if he says here's how we're going to implement the regulation this year we're going to implement it by not taking account of retroactive exemptions but it seems like in subsequent years they're free to interpret in a different way it's just that every time they apply the regulation they're choosing how to apply it they're not rendering an interpretation that says this is the only way we read these words to work do you do you do you see that distinction and if there is that distinction than do you think that in prior interpretations that the agency was actually saying this is the only way the words of this regulation can be red i'm not sure that in two thousand and eleven e p a was saying that's the only way the regulation could be right but e p a i think even if there are multiple permissible interpretations that the regulation is entitled to regulation doesn't actually by its terms give us an answer on what we do with retroactive exemptions it doesn't compel us to take them into account it doesn't preclude us from taking them into account here's what we're going to do this year we're going to we're not going to take them into account and then the following year they say we're going to continue not taking them into account well then on that it doesn't seem to me that there's any on timeliness problem if in the rd year they say we're not going to take them to into account this year either someone could come in within sixty days of that and say well ok this year you've continued to prior practice but it's something that you could have done or you couldn't have done you decided to do it we're challenging that you did it this year and every year it starts a new because you've already said we could have done it either way and for this year we're doing it in the following way i think there's a difference between major years says we look at the issue again and we actually took a serious substantive reconsideration of the issue and are reaching the same interpretation that's not what he did here instead it made it clear from the proposal that it's the way the percentage standards formula adjust for small refinery pensions just isn't within the scope of that room making not taking comments on it and then again when it probably but i don't think i don't think e p a can just say we're not taking comments on the following thing and therefore it's out of bounds that there's a separate inquiry that determines whether it's out of bounds and i guess i may not be understand this conceptually correctly and please just please correct me if i'm wrong but as i understand it the agency could say we're reading the regulation here's how we interpret the regulation the words of the regulation mean x and here they just get say the words of the regulation of all regulation mean that we don't take account of retroactive exemptions that's how we read the words that would be one thing that's an interpretation but if the agency says not that but they say we don't know what the word we don't know the words compel any particular implementation but here's how we're going to implement the regulation this year we're going to implement it so that we're not taking account of regulatory exemptions those seem like different approaches and it's not the st one raise the timeliness issue the nd one it doesn't seem like adults and here i think the st one is that case and i would point the court to and we're simply applying these longstanding regulations but that excess what you're that's what you're saying now that i don't think the agency gets to say now what we did way back when it was on timely because now we're saying what we meant bag then is  what what determines whether it's untimely is what you said back at the time of the instrument that triggered the sixty day clock so that's the question and then that question means we have to look back at what you did in two thousand and eleven are in a subsequent year to see whether those instruments triggered the sixty day clock right and i think it's useful to look at for example the twenty thousand rouer e p a gonski actually asked for comments on this substantively reconsiders its approach and decides it's going to keep the cryer is we are maintaining our approach to any exemptions for twenty one thousand dollars that are granted after the final rules are released will not be reflected in the percentage standards that say you're maintaining an approach is not saying that there is an interpretation of the regulation that out understanding it's just an approach and if you said every year for example he a set of this rule we could choose to continue this approach or we could choose not to this year we're choosing to continue this approach when it doesn't seem to me that that means that the challenge has to be taken in that year if it then continues the approach the subsequent year that triggers that a new well i see what you are saying and i actually disagree with that premise ok but i will point the court i think that you know if you did establish your interpretation before  even if let's say it's just an approach they're carrying over year to year this court's medical waste institute case this is cited in our in our recent forty that's a situation where each established an approach in a prior rule and then i'll see i want to make sure i'm not interrupting on my colleagues time because let me ask one last question this way then suppose e p a specifically says one is adopting an approach we could choose to adopt this approach or we could choose a different approach we're choosing to adopt this approach and that's the same one that we adopted last year do you think that that triggers a sixty day clock on new or do you think no it's still just an approach that was cemented at time zero and so had to be challenged before the latter i think if you p s as there are multiple personal things we can do we are going to choose to interpret this line of permissible approaches rely on that in subsequent years without reopening the issue and i ask is there and the chief judge is hypothetical is there any language in any of the rules suggesting that the agency is saying we could do this or we could do that at every year will decide over again which one we do know and i don't think that's the case i think it's instead the agency is doing what we normally permit under our they interpret their stature their regulation question is whether it's a reasonable not necessarily compelled then that's their interpretation of the regulation and if there is a jurisdictional bar to challenging it d has to be challenged at that point isn't that your argument yes and what i'm for example with respect to chevron we require the agency to say we understand we have discretion here if you want chevron step to deference you have to say we agree we have discretion here we're not compelled you say we're compelled that we only give you chevron one so an agency following the this court's general doctrine would almost always unless they actually feel compelled would say we have discretion this is our discretionary decision this is our view of the statute or under our keyser this is our view the regulation i think that's right here on so counsel do you see any difference in the circumstance of an annual determination in light of the statutory language on which the shooters relocking that it's a new determination each year and  i don't know if our chevron general approach that judge garland is referring to necessarily controls in that circumstance because we have acknowledged the difference between and interpretation the point that the chief judge is exploring with you and the decision to continue or to maintain this approach so i think if i understand your honour's question you're asking everyone always says that when i have i think it's clear are i i'm talking about petitioners argument that the statutory language requires an annual determination yes your honor and that section both three up a statute nothing in section three of the statute requires the e p a to revisit this issue every year it requires it ph you calculate percentage standards each here and he is entitled to do the calculation each year in reliance on and without reopening its prior calculation methodology i would point out that mr landon referred to the along case and a point of obligation which is different because there are at least there is the appropriate language in three there is nothing like that here that applies to e p a and you'll be having to revisit the framework regulations under which a calculates the percentage standards so my question about the obligation to make an annual interpretation also asked to whether where the facts before the agency have changed such that applying its two thousand and eleven interpretation no longer is consistent with the purpose of the statute in other words this is not a question of being accurate in projecting and estimating but rather that what may have worked in two thousand and eleven to be consistent with the purpose of the statute no longer works to do anything that is consistent with the statute congress was trying to promote greater use this is working to the contrary it's promoting less use a negative use so that's what i'm trying to get at is that if the circumstances have changed and yet congress has placed on the agency the obligation to make an annual determination doesn't that suggest that we're not in the situation that the chief judge was exploring with you and i thought you acknowledged that you weren't in the situation where the agency was saying even in two thousand and eleven that it was compelled to interpret its regulation in a particular way and i think that if congress had wanted to know impose on e p a an obligation to revisit its approach every year you could have used language such as the as appropriate language that you that congress a point of obligation and this year it could have but where it places i'm just trying to understand what the agency thinks and annual determination needs is it just counting up gallons or is it looking at how its interpretation affects the ability of the agency to carry out congress's purpose so you know one this court called the anyone who process quote a quantitative standard setting  i think it's fair to understand that as saying e p a needs to calculate the percentage standard each year but that doesn't mean it has to re evaluate its approach to how it does that calculation when it establishes an interpretation as some would have liked but certainly the agency could with a straight face say that knowable fuels were being interpreted now not eight years later on the agency agency no obligation to consider that in an annual interpretation and i really think we were getting at something a little different in a lot but i won't press that point and i think what i would say in response to that your honor is this court recognized in americans for clean energy that this statute does not pursue its purposes of increased renewable fuel use at all costs it's not really be only single goal of a statute single goal might no longer be being achieved effectively there are other goals that the statute requires you to consider so that's close to saying there are no circumstances that the agency would consider requiring it in its annual interpretation to reconsider what was maybe its preferred regulatory interpretation but not compelled regulatory interpretation well i think what your honor is positing is a situation where new facts or new circumstances more recently might compel a different approach and in that situation what alonso has is the proper way to seek a change in the existing interpretation is to go to the agency st so metaphysician for reconsideration based on those new facts i ask that isn't seem to take another look at its interpretation but that doesn't have to be done and nor does it nor should it be done within the context of an you know process where that statute doesn't require time and section o volumes of renewable electricity have ever been produced and the key word there is qualified you're not qualified to produce renewable electricity for purposes of the our offense statute until you have a facility that's registered to generate rennes it's not enough for there to be a pathway that's not the end of the process and this registration requirement is more than a formality it's the way that e t a ensures that runs are only generated  renewable fuel that actually needs the requirements to qualify under the statute so the registration requirement is how e p a insurers that renewable you know it's been made from the crop of renewable biomass using the proper production process that might be in the way that's been approved and then ensure that the renewable fuel is actually being used for transportation purposes r f s power argues for the st time on its required grief and argue and statutory interpretation point they argue for the st time that the statute requires e p a to consider fuel from unregistered facilities as part of its production ask them that they have waived this argument because they raised the statutory interpretation for the st time in its reply brief never raised it in its opening brief or in their public comments they can't claim to be surprised that this is approach just e p a made that clear fest power it has increased the obligations without a corresponding increase in rins that can be used to meet those obligations so that's certainly not the required reading of the statute probably not a reasonable one and american petroleum institute and mineral energy i'm elizabeth dawson and light of the court's discussion with the advocates today regarding jurisdiction and time in the us to hear biofuels petitioner's arguments we would simply encourage the courts to rulemaking not to reallocate nonexempt obligated parties the volumes of renewable fuel attributable to small refineries who received the exemptions from compliance this decision was consistent with the statute and reasonable and should be  that applies to the animal standard setting is a timely challenge even if it were implicate the validity of an earlier adopted rule or policy that it doesn't matter anymore and the fact that a on involved this language as appropriate doesn't distinguish the case there is a statutory duty to ensure a law on ultimately upheld his actions because it read that language as appropriate not to require the reconsideration but that was the merits determination before that was the timeliness decision and said it was a timely challenge and asked pm the court recognizes explicitly and saying that if the sickness had challenge to the standards that claim would have been timely so it's number one number two as judge rogers was pointing out it isn't reasonable for an agency to maintain an interpretation or an approach in evidence was crystal clear that the exemptions were destroying the program there are billions of rins from these exemptions and they completely undermine the market forcing purpose that congress established the program and rd there were other ways to account for the exemptions without changing the interpretation for example if you could use a lesser or could have simply added additional amounts to the future standard to account for the previously granted exemptions it's interpretive approach or method or whatever it is you want to call it to understanding the regulation only accounted for what it's called modifying or revising the standards after that have been set but that's not what we have said e t a should have done here so we don't even think that the kind of adjustment we're talking about is in the teeth of e p a s interpretation or prone to its regulation i have nothing further your honor but i'd be happy to answer any additional questions if there are looks like we don't have any further questions thank you mr nolan thank you mr williamson i'll give you one minute for abo thank you your honor government arguments that we waived in objection to their interpretation of the rule but we have to respond to the record and where is the interpretation of seventy and the record response to comments documents nowhere mentions qualified volume that the government argues now it know where connex its position on rins to the text of the statute so again we can only respond to what is in the record in this argument that the government is advancing now only get peer for the st time in the read brief the n p i case which of physical fuel being produced in that case e t a was overestimating the amount of volume in order for policy reasons to promote renewable fuel technologies that were still in their infancy and needed to be incubated but actually weren't producing as a coffee whole electricity issue was completely different or producing copious volumes of electricity fuel is available and a reason is different then production why do we know because congress use different terms congress use the word production in seventy it also created the ring credit program in section five so congress understood the distinction rins are reflective of the entire supply chain of fuel once it's produced transported used ultimately that is not what the word production means and the government itself was different than the word production so if supply is different than production then certainly rain credits or facility registrations the last point you know i'm overtime is that the question of qualify was answered in the twenty four team pathway role in the federal register notice and actually prior to that two thousand and ten where you can be the decision that electricity is qualified that's a different accounting and like to focus this morning on severe economic harm in the point of obligation for two reasons e p a acted arbitrarily and capriciously when refused to grant is severe economic harm waiver and abused its discretion when it declined to reconsider the point about which with respect to severe economic harm e p a relied on logically inconsistent reasoning when it's a night of waiver based on refiners suppose that ability to justification for this inconsistent recent e p a also completely ignored a new comprehensive expert's report demonstrates the severe economic harm that the two thousand nine hundred volume appointments would cost to east coast refiners and to the broader east coast economy those same two errors also demonstrate why e p a abused its discretion when refusing to reconsider the point of obligation despite the new evidence the small refinery exemptions and their relevance to the severe economic harm inquiry e p a has the authority under the clean air act to grant a waiver of value requirements where those requirements that refiners are not aren't volume requirements because they are supposedly able to pass through their r f s compliance costs to their customers that reasoning is findings of disproportionate economic hardship with e p a s conclusion here that there would be no severe economic harm to refiners or the broader region in which those refineries are located because explanation for how it can reconcile its reasoning with respect to past with its decision eighty five times to grant small refinery exemptions this inconsistency has been identified  other courts most recently in renewable fuels association present a two thousand and twenty decision from the th circuit court vacated e p a s granting of small refinery exemption failure to grapple with the recent surge in smaller finery exemptions also underscores why it was an abuse of discretion for the e p a to refuse to reconsider the point of obligation a point of obligation as part of the annual here commenters came forward with new evidence bearing directly on the propriety of prior decision to of smaller finery exemptions eighty five as i mentioned between two thousand and sixteen and twenty eight a significant increase over the twenty three that were granted between twenty million one hundred and thirty two thousand and fifteen the evidence also included the bankruptcy of philadelphia energy solutions the largest refinery on the east coast in twenty eight dollars which specifically identified compliance costs as the quote primary driver for its decision to file for bankruptcy the new evidence also included the expert report from dr craig prong submitted by monroe energy which documented the severe economic harm that would be caused by the two thousand and nineteen requirements in the of all of that new evidence e p a simply declared in the most conclusory subjects it imaginable that the point of obligation is beyond the scope of this room and that was the entire s reasoning with respect to the point of obligation that is an abuse of discretion under this court's decision in a lot to be sure e p a has discretion in this field to determine determination e p a has an obligation to exercise that discretion to provide a reasoned explanation for why or why not to include the point about within the scope of the annual  reports st the expert report focused on the pad beach that's the east coast of the united states dr prong explained that had one refined has traditionally have lower refining margins and lower profitability and refiners in other areas of the united states the report also focused specifically on the twenty nine dollars team following requirements which are at six hundred and thirty million gallons higher than prior the prior years ners and thereby have substantial ripple effects throughout the entire regional economy as dr peron explained for each refinery job that is lost by a refinery in southeastern pennsylvania that means that they'll be eighteen thousand three hundred jobs lost in the southeastern pennsylvania region and twenty two thousand jobs lost throughout the state with an annual labor income loss of one billion six  explain how it could reconcile its reliance on a path to theory to both tonight a severe economic more harm waiver in this proceeding and to justify its prior rematch and and vacated so that e p a can consider this new evidence and can explain the inconsistent reasoning on which it relied in denying its severe economic harm waiver  remand after a big danger from this court should grapple with that new evidence and assess in a recent matter whether it requires granting a severe economic harm waiver and whether it is appropriate at the statute specif whether it is appropriate in light of the evidence to conclude the point of obligation within is rule making proceeding if the panel has no questions i'll reserve the balance of my tongue for a buck  eight also reasonably and specifically found that commenters provided no new credible evidence to indicate that refineries do not or cannot recover the cost of written in doing so subject only to review or abuse of discretion finally on how that once if you resolved an issue it may defend against related criticism by simply referring to that resolution in this case the point of obligation to mile so long as the to these issues it is not enough that they dress up all the arguments in new clothing as they did in the promised this will be treating the issues as if they are addressed on a blank slate every year which they are not the true c r a studies are clear examples of the petitioners approach here the point of obligation and i'll address the arguments raised in these studies yet petitioners simply resubmit them the peron analysis is similarly based on rehashing arguments that were squarely addressed and rejected in the point of fuels these effects largely cancel each other out so the supply and demand curves are not affected this peron assumes none of this is post hoc analysis rather the titian are recycling arguments that were already addressed in the point of obligation denial a permissibly referred to that denial and correctly found that no new credible evidence has been presented nor is p s in bankruptcy or its subsequent settlement with the e p a evidence that it could not pass through its cost explain and it's worth pausing here to think about how the settlement benefited p e s because the same point is also relevant to petitioners arguments on small refinery exemptions under this settlement p s can still sell its products and i'm market price that includes the cost of room acquisition but it will not actually have to acquire the full amount of rins it would otherwise thereby raising its profits to illustrate this point imagine that a story that a gallon of milk costs three dollars and the state then imposes a one dollar per gallon tax on all stores which they then pass through to their customers at this that would raise the market price to four dollars per gallon as a statement of ways this tax for a single so store that store can continue to sell at the prevailing four dollars per gallon market price and in doing so it can take a higher profit because they do not have to pay the tax this is important because it illustrates that the benefits to p s of its bankruptcy settlement is not withstanding p ability to pass through its written costs turning to petitioners arguments on that the alleged logical inconsistency between e p a s grant of small refinery exemptions and its decisions not to invoke the severe economic harm waiver and its conclusions on receiving a small refinery exemption irrespective of a small refineries ability to pass through its or in costs the tensioners go to great lengths to try and link these small refinery exemptions to this path through conclusion but the foundation of their argument is not solid here the same economic point that i just discussed with regard to philadelphia energy solution applies to the exemptions again congress specifically authorized the use exemptions by statute particular refinery and it specifically addressed in the record the claim that music john's exemptions suggest severe economic harm explained to the user decided on a different standard than the severe economic harm  in the statute and with this particular focus if you can consider factors that are not dependent on rin cost passthrough and factors specific to particular small refineries for example refiners pass through their  acquisition costs in the prices of their product but really compliance demonstration of compliance with the renewable fuels program is its annual a small refinery may therefore acquire incur all of its rent costs at the end of the consider factors such as the short term hardship associated with rent acquisition this harm is irrespective of the refineries ability to pass through their costs in fact petitioners do not show any situation in which your own right if the court doesn't have any further questions on these issues or any of the other issues and petitioners brief we would ask that the petitions be denied thank you mr carlisle doesn't appear we have questions thank you for your argument  had if i looked at the time a correctly i believe you had three minutes and eleven seconds remaining will get as close to that as we can three minutes or twenty i'm corrected thank you very much the fundamental problem with defense of its denial of the severe economic harm waiver and its refusal to reconsider the point about wiki sion in this court is that almost none of the reasoning in its brief and that we heard today is contained within the four corners of its rule or within its response to comments this court must evaluate if he's resigning based on the comments that addresses the serious logical inconsistency between e p a s pass to reasoning on the one hand and its decision to grant eighty five small refinery exemptions between that issue and to reconcile that logical tension within the four corners of its decision cannot be cured by post hoc rationalization in this court the same holds true with respect to lack of reasoning regarding the point of obligation the totality of e p a s discussion of that issue is and j one thousand eight hundred and fifty and it reads as follows changes to the point of obligation for the in this document that is all e p a said on this issue and that is a textbook abuse discretion under this court's decision in a lawn which makes clear that he has an obligation to determine whether it is appropriate to consider the point of application and aren't making in light of the new evidence in this record that was not before the court in a law that was not before the honors were here today because in setting the volumes for the renewable fuel standard program for two thousand and nineteen e p a violated the law by ignoring the very real severe and documented environmental harm caused by the and explain how in light of the record before e p a making the production of renewable biomass to environmental degradation it is simply impossible to find that the two thousand and nineteen rules fifteen billion gallon manzi will have no effect whatsoever on threatened an the failure to consult violated the f a a the other focuses on the no effect of terminations they rely on the same flaws in the in the novak determination runni claim under the e s a congress intended to give endangered species priority over primary missions the federal agencies imposing substantive procedural requirements on federal agencies to protect and then endangered fish wildlife plants and their habitat ports that and the f a a requires an agency to consult with fish and wildlife services and that's in the marine fisheries service before taking any action if the proposed action may affect species are critical habitat the may affect threshold for triggering a consultation is what it essentially means more than a zero chance of having an effect if the action may affect consultation is required if the action may affect but is not likely to adversely affect this still requires the concurrence of the service only if the agency determines that the proposed action will have no effect at all can it do away with the consultation requirement an issue in the affected terminations explaining finding here there's no question that the record leaves no doubt that some of this core will be grown in places like the mississippi river basin more fertilizers and pesticides used required to grow corn will lead to a lot off which contributes to the dead zone in the gulf of mexico harming gulf surgeon with which is a federally listed on the record also shows that some of this corn will likely come from places like kansas where land conversion and intensification harms the habitat of the hope in creating another federally listed the record includes this effective terminations supporting it renders a rule on lawful despite record evidence linking detailed environmental harms to the renewable fuel volumes e p a irrationally tries to pretend that the twenty nine thousand volumes will have no effect on the production of renewable biomass despite the fact that this is exactly what the will is designed to do and do the very premise of the r f s program with to increase the production of renewable fuels and this court has consistently recognized quote by requiring upstream market participants to introduce increasing volumes of renewable fuel into the transportation fuel supply congress intended the renewable fuel program to be a market forcing policy that would create the man's pressure to increase consumption of triennial required and acceleration by doctors higher lark show that quote this increase in crop production and land conversion harms the habitats of numerous animals and stash including critically a particular habitat are a number of flaws in e p a s determination st e p a applies the wrong answer the question is not whether the compost action is reasonably certain to affect species their habitat but rather whether the proposed action may affect his or habitat and the answer to that question here is a resembling yes a reasonably certain standard applies to whether an indirect effect will occur in here it is reasonably certain that some core will be grown to satisfy the fifteen billion gallon mandate and this clearly may affect for example corn cultivation in the mississippi river basin leads to increased fertilizer and pesticide use which leads to runoff contributing to the dead bone in the gulf of mexico and harming species ball surgeon e p a s attempt to import this higher burden into the initial threshold question is improper and e p a can escape the fact that the threshold for triggering consultation is low and requires more than a zero chance of having an effect which clearly is the case here e p a also argue that corn acreage down pointing in its brief to evidence that's not referred to or relied on in the no effect the termination e p a cannot now rely on this data to support it otherwise unreasonable determination and then any event planted it rich is not the issue instead the issue is whether the mandate will lead to the production of renewable biomass which based on the evidence in the record it is certainly certainly certainly reasonable to do reasonably certain to do whether it's really an conversion or a through intensification on already cultivated land fifteen billion gallons and the is reasonably certain evidence e p a determination and the rule that relies on it also violate the administrative procedure act ek acted in an arbitrary and capricious manner by relying on a no effective terminations that is contrary to the evidence has no rational connection to evidence some of which i just described and also that's included in the records that show the severe environmental harm caused by the renewable fuel program and that the two thousand and nineteen will is simply the next iteration of that program and that's will continue these are harm in any analysis here had a consultant as it was required to do under the e s a could have found to be your environmental harm instead it ignores record evidence pretended the rule doesn't do exactly what it is intended to do which is to incentivize the production of for the agency to consult and for its to reconsider its wins of the waiver and why of the evidence that's actually in the record to consider all of the evidence of environmental harm ok so now we should have a caterer comes up with a request it's  despite the clean air act prohibition on the use of the land for this purpose as judge rogers pointed out earlier here we have a situation where the facts before the agency have changed so that applying this approach is no longer  making and so i don't think that they're mutually exclusive i think a petition for review can ask to amend the use of the aggregate compliance scheme for all of the renewable fuel standard program i think our position is for this case that this challenge is appropriate and timely because e p a is continuing to use this approach despite evidence in this rule making that shows that this approach violates the clean air a litigation over the two thousand seven and eighteen rule this court held that you be a must express lee address its obligations under the endangered species and e p a addressed that issue head on in the two thousand and nineteen romantic and looked at the facts and the circumstances and the evidence surrounding the twenty one thousand rows in there determine that this rule is not driving corn soybean or other feedstock production for biofuels and therefore is not a cause a mechanism that is disconnect that runs throughout this entire case and that is that petitioners were lie on the same evidence they relied on the past litigation rely on the large declaration and the ph triennial report also which are trouting a report that looked to the future but no that report was issued in june two thousand and eighteen it did not look at facts and circumstances specific to the two thousand and nineteen renewable fuels and what changed with corn and that's primarily what petitioners are talking about when they reference a fifteen million gallon renewable fuel mandate that is the corn ethanol mandate and what e p a looked at is they looked at if you  than regular gasoline in this economic coal from refiners to blend that into every gallon of gas so looking at the market factors regardless of whether there's an aren't fast rule the market will produce corn ethanol and blended into account gasoline and it doesn't mean that corn production is not also i'm just talking about what's in the record right it and this is in the record mandate and so if you take away you on offense small you will still have production for each and added new lands you'll still have production for exports and so it's not the case that simply this rule is driving production of as a consequence of increased by field production mandates and it's talking about a corn and part of their correct your honor and and what that's talking about is again that retrospective analysis and so we're not disputing the broader look at an arc that's a program that in circumstances it can have those kind of interactions what do you create what's very specifically focused on is the regulation at issue in this case and that's the twenty nin it was looking at those market agricultural fuel market factor specific to the twenty nine thousand and it's actually illustrated if we talk about like slowing production vegetable oil from soybeans is used to produce and and scrutinized the evidence on on those factors and i found even though there are more noble fuel has supported increased production of those biofuels that it is not drag in production of so it being crops in two thousand and ninet and among those factors is new evidence a new regulatory factor surrounding two thousand and nineteen like a large surplus of soybeans on demand chinese terrorists that are reducing exports of these commodities so where are you getting your standard of driving force so we're looking at principles of cars each and so when he plays looking at it what kind of effects is this room going to have and you know we we discuss it in terms of you get that in this context that the standard your honor where'd does it say that in order to meet the standard here for th e petitioners have to show that two thousand and nineteen rule is the driving force sure like getting at your yes thing it has to show to be excluded so that even if the two thousand and nineteen rule is a partial cause where they have shown to these expert studies there is a causal link why isn't that i understand that we defer to agency expertise but your own record experts implications of this trying to report on its determination and certainly did not ignore its prior determination in fact looked at it expressly and i think the key driving factor here is that conditions surrounding renewable fuels or the towards the bottom of the page there's an effort to say that there's an acknowledgment that statements in the trial report may appear inconsistent with our conclusions and i get that but just up above a little bit  the agency said the report did not proport to establish a causal connection between the r f s annual rolls and out land use changes and then what the report said is it's likely that the impacts associated with land use changes are at least in part generally is much broader than annual were new fuel so that is part of what he was driving at in that statement yeah there are more salient points for our purposes is that the turnaround for certainly was not looking at the individual  so your honor even if we assume that there is some length even despite the evidence if we assume there's some link between the our own fats and environmental harm e p a still addressed those factors and found that there was not enough of a  link or enough evidence to show that even if there is some crop production the united states that it is actually having an impact on e s c would be supreme court average and at least for the purposes of standing i point the court to the supreme court's decision and another five up for us correct and in the court there found even if you remove that ten percent of foreign funding there was a lack of evidence showing that there was that ability to redress the injuries they were complaining about and there  says they're relying on and the argument that the try and mail report was retrospective and this new evidence is focused just on twenty one sure you are st i don't believe that the trying your part is effect whatsoever on the production of renewable biomass to judge roger's point it doesn't have to be the only driver and it is certainly a driver of production of renewable i am us and then all of the evidence in the record links that production i understood councils argument it was part suppose everything you say is correct nevertheless e p a looked at tw nineteen and said i'm going beyond what council argued so hypothetically suppose there was a record that showed that the tw nineteen rule was not going to have any effect on production no effect whatsoever because the market was flooded he gave the example soybean but let's suppose corn to just for sake of the hypothetical then what would your response be still the trial report sort of the carry over effect is enough or does the two thousand and nineteen rule itself have to have and i think this is your argument some effect well i just want to be clear about that yes your honor i think that if there were evidence that truly showed that there were there was no effect at all of a new bio mass production it might be a different case than what we're arguing here but i don't believe the record reflect that i understand you're giving a hypothetical and i think that i know and i understand in counsel's arguments never refer to the correct standard but i just want to be clear i do think that you need to look at it for each year i don't think that you can look at it in isolation however i think that there is a mountain of evidence that directs we link these volumes to renewable bio mass production which leads to leo conversion which leads to an environmental harm which leads to harm to the heat and the environment and it would really take something to overcome that mountain of evidence really you need to two thousand and nineteen which is not in the record here i don't think they can overcome by mountain of evidence for two thousand and nineteen that shows that a fifteen billion gallon mandi hasta rely on corn and soy produce somewhere and then once you reach that conclusion that you need so i and course soybeans and corn produce somewhere to satisfy the mandate then you go back to the direct link to all of the environmental harm