HollyFrontier Cheyenne Refining LLC v. Renewable Fuels Association
Case Overview
HollyFrontier Cheyenne Refining LLC v. Renewable Fuels Association, decided 6-3 in June 2021 with Justice Gorsuch writing for the Court, held that small oil refineries that previously received hardship exemptions from Renewable Fuel Standard blending requirements may re-apply for a new exemption even after their prior exemption has lapsed, rejecting the argument that exemptions must be continuously maintained to remain available.
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The Facts
The Renewable Fuel Standard, 42 U.S.C. § 7545(o), requires petroleum refiners to blend a minimum volume of renewable fuels into their products. Small refineries may obtain exemptions from the RFS if compliance would cause 'disproportionate economic hardship.' Several refineries whose exemptions had lapsed sought new exemptions, which EPA characterized as 'extensions' of prior exemptions. The Tenth Circuit held that a lapsed exemption could not be 'extended.' The Supreme Court reversed.
The Application
The statutory term "extend" in § 7545(o)(9)(B)(i) provided no clear definition or continuity requirement, creating ambiguity when applied to refineries whose prior exemptions had lapsed. The Court found that this textual silence permitted EPA to interpret "extend" broadly, allowing HollyFrontier and similarly-situated refineries to petition for extensions of exemptions they had previously held but allowed to expire, without requiring those exemptions to have remained continuously in effect. The plain language of "extend" does not inherently require an unbroken chain of exemption status; a temporal gap between exemptions did not bar their reinstatement as "extensions." This interpretation fundamentally altered EPA's enforcement mechanism by enabling small refineries to move in and out of exemption status as market conditions and claimed hardship shifted.
The Conclusion
**Decided June 25, 2021. The ruling significantly expanded small refinery eligibility for RFS exemptions by eliminating the continuity requirement.** Environmental groups argued the decision would gut the RFS by allowing refineries to cycle in and out of exemptions indefinitely. The decision constrained EPA's ability to enforce renewable fuel blending obligations against small refineries.
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