Document ID: EPA-HQ-OAR-2021-0566-0114
Agency: epa
Document Type: Notice
Title: June 2022 Alternative Compliance Demonstration Approach for Certain Small Refineries under the Renewable Fuel Standard Program
Posted Date: 2022-06-08T04:00Z

[Federal Register Volume 87, Number 110 (Wednesday, June 8, 2022)]
[Notices]
[Pages 34872-34873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12357]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2021-0566; FRL-9868-01-OAR]

Notice of June 2022 Alternative Compliance Demonstration Approach 
for Certain Small Refineries Under the Renewable Fuel Standard Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) is providing notice 
of its action to provide an alternative compliance demonstration 
approach (the ``June 2022 Compliance Action'') to certain small 
refineries whose 2016, 2017, and/or 2018 petitions for small refinery 
exemptions (SREs) under the Renewable Fuel Standard (RFS) program were 
denied in April and June 2022 after being judicially remanded to EPA 
for reconsideration. EPA is providing this notice for public awareness 
of, and the basis for, the June 2022 Compliance Action announced on 
June 3, 2022, which supplements the April 2022 Compliance action 
announced on April 7, 2022.

DATES: June 8, 2022.

FOR FURTHER INFORMATION CONTACT: Karen Nelson, Office of Transportation 
and Air Quality, Compliance Division, Environmental Protection Agency, 
2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: 734-214-
4657; email address: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The Clean Air Act (CAA) provides that a small refinery \1\ may at 
any time petition EPA for an extension of the exemption from the 
obligations of the RFS program for the reason of disproportionate 
economic hardship (DEH).\2\ In evaluating such petitions, the EPA 
Administrator, in consultation with the Secretary of Energy, will 
consider the findings of a Department of Energy (DOE) study and other 
economic

[[Page 34873]]

factors.\3\ In separate actions announced on April 7, 2022, and June 3, 
2022, EPA denied 36 and 69 small refinery exemption (SRE) petitions, 
respectively, for the 2016-2021 compliance years by finding the 
petitioning small refineries did not face DEH caused by compliance with 
the RFS program.\4\ Forty-one of those 105 SRE petitions were for the 
2016, 2017, or 2018 compliance years, and 34 of those 41 SRE petitions 
had previously been granted, and those decisions were reversed on 
remand. It is the 2016, 2017, and 2018 RFS renewable volume obligations 
(RVOs or ``RFS obligations'') created by the denial of these 34 SRE 
petitions that are the subject of the June 2022 Compliance Action.\5\
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    \1\ The CAA defines a small refinery as ``a refinery for which 
the average aggregate daily crude oil throughput for a calendar year 
. . . does not exceed 75,000 barrels.'' CAA section 211(o)(1)(K).
    \2\ CAA section 211(o)(9)(B)(i).
    \3\ CAA section 211(o)(9)(B)(ii).
    \4\ ``April 2022 Denial of Petitions for RFS Small Refinery 
Exemptions,'' EPA-420-R-22-005, April 2022; ``June 2022 Denial of 
Petitions for RFS Small Refinery Exemptions,'' EPA-420-R-22-011, 
June 2022 (hereinafter the ``SRE Denials'').
    \5\ ``June 2022 Alternative RFS Compliance Demonstration 
Approach for Certain Small Refineries,'' EPA-420-R-22-012, June 
2022.
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II. Compliance Action

    Concurrent with issuing the April 2022 SRE Denial on April 7, 2022, 
EPA announced \6\ the availability of the April 2022 Compliance 
Action,\7\ which provided an alternative compliance demonstration 
approach for the 31 small refineries whose SRE petitions had been 
previously granted for the 2018 compliance year and were denied upon 
remand and reconsideration.\8\ With this notice, EPA is announcing the 
availability of the June 2022 Compliance Action, which supplements the 
April 2022 Compliance Action to include three additional SRE petitions 
for the 2016 or 2017 compliance year that had not yet been decided at 
that time.\9\ EPA is providing 31 specific small refineries with an 
alternative approach to demonstrating compliance with their 2016, 2017, 
and/or 2018 RVOs created by the SRE Denials. Each of the 31 specified 
small refineries had previously been granted an SRE for the 2016, 2017, 
and/or 2018 compliance year; however, each of their petitions again 
came before EPA as the result of judicial remands. As established in 
the June 2022 Compliance Action, EPA has determined there are 
extenuating circumstances that warrant an alternative compliance 
demonstration approach that the specified small refineries may use to 
meet their 2016, 2017, and/or 2018 RFS obligations without retiring any 
additional RINs.
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    \6\ 87 FR 24294 (April 25, 2022).
    \7\ ``April 2022 Alternative RFS Compliance Demonstration 
Approach for Certain Small Refineries,'' EPA-420-R-22-006, April 
2022.
    \8\ Sinclair Wyoming Refining Co. v. EPA, No. 19-1196 (D.C. 
Cir.), Dec. 8, 2021 Order, Doc. No. 1925942.
    \9\ The June 2022 Compliance Action covers a total of 34 SRE 
petitions; however, the three additional SRE petitions were all 
submitted by small refineries that were previously covered in the 
April 2022 Compliance Action. Thus, the June 2022 Compliance Action 
still applies to 31 small refineries.
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III. Judicial Review

    Section 307(b)(1) of the CAA governs judicial review of final 
actions by the EPA. This section provides, in part, that petitions for 
review must be filed in the United States Court of Appeals for the 
District of Columbia Circuit: (i) when the agency action consists of 
``nationally applicable . . . final actions taken by the 
Administrator,'' or (ii) when such action is locally or regionally 
applicable, but ``such action is based on a determination of nationwide 
scope or effect and if in taking such action the Administrator finds 
and publishes that such action is based on such a determination.'' For 
locally or regionally applicable final actions, the CAA reserves to the 
EPA complete discretion whether to invoke the exception in (ii) 
described in the preceding sentence.
    This final action is ``nationally applicable'' within the meaning 
of CAA section 307(b)(1). In the alternative, to the extent a court 
finds this final action to be locally or regionally applicable, the 
Administrator is exercising the complete discretion afforded to him 
under the CAA to make and publish a finding that this action is based 
on a determination of ``nationwide scope or effect'' within the meaning 
of CAA section 307(b)(1).\10\ This final action provides an alternative 
approach to demonstrating compliance with the 2016, 2017, and/or 2018 
RFS obligations for 31 small refineries across the country and applies 
to small refineries located within 16 states in 7 of the 10 EPA regions 
and in 7 different Federal judicial circuits.\11\ This final action is 
based on the extenuating circumstances applicable to these 31 small 
refineries and the impacts their compliance with their newly created 
2016, 2017, and/or 2018 RFS obligations under the existing compliance 
scheme would have on the RFS program. For these reasons, this final 
action is nationally applicable or, alternatively, the Administrator is 
exercising the complete discretion afforded to him by the CAA and 
hereby finds that this final action is based on a determination of 
nationwide scope or effect for purposes of CAA section 307(b)(1) and is 
hereby publishing that finding in the Federal Register.
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    \10\ In deciding whether to invoke the exception by making and 
publishing a finding that this final action is based on a 
determination of nationwide scope or effect, the Administrator has 
also taken into account a number of policy considerations, including 
his judgment balancing the benefit of obtaining the D.C. Circuit's 
authoritative centralized review versus allowing development of the 
issue in other contexts and the best use of Agency resources.
    \11\ In the report on the 1977 Amendments that revised section 
307(b)(1) of the CAA, Congress noted that the Administrator's 
determination that the ``nationwide scope or effect'' exception 
applies would be appropriate for any action that has a scope or 
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at 
323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03.
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    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the District of Columbia Circuit by August 8, 2022.

Joseph Goffman,
Principal Deputy Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2022-12357 Filed 6-7-22; 8:45 am]
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