Supreme Court weighs whether to limit issuance of exemptions to biofuel blending requirements

Supreme Court justices on Tuesday pressed lawyers on the meaning of the word “extension” in arguments that could have major implications on whether small oil refineries need to blend a certain amount of biofuels into their products.

At issue in the case is a law that allows exemptions from the Renewable Fuel Standard for small refineries that can show economic hardship. The standard requires a certain percentage of refined gasoline and diesel to be made from biofuels like ethanol. 

The case is an appeal of a lower court’s decision that small refineries can only get exemptions if they have had them continuously since 2011. 

In the case, the Biden administration is on the side of biofuel interest and opposing small refineries. 

Peter Keisler, a lawyer representing HollyFrontier Cheyenne Refining & Marketing and Wynnewood Refining Company, said that this could force some refineries out of the market and create inconsistencies in how refineries are treated. 

“Similarly situated refineries, both facing identical hardships, get treated oppositely because one of them several years ago, when the statutory demands were lighter, was able to comply,” he said. 

Many of the arguments centered around the congressional meaning of the word “extension” in that small refineries can petition for “an extension of an exemption” based on economic hardship. 

Keisler argued that the phrase extension can include times when there’s a lapse.

Some of the justices, however, seemed not to buy into this definition.

“This seems a little bit odd to think of an extension for something that has already terminated,” said Justice Clarence Thomas. “[If] my electricity is turned off because I failed to pay a bill, then I paid it, or I get a reprieve, is that an extension or is that a grace period, it just seems rather odd to leave it that way.”

Keisler said that the word is “sensitive to context” and that his interpretation applies to government benefits.

Christopher Michel, who represented the federal government, argued that it should mean continuous exemptions. 

However, some justices also met this with skepticism. 

“I think Congress uses extension sometimes even when something’s lapsed,” said Justice Brett Kavanaugh. 

“When you’re teaching and you have a 5 o’clock p.m. due date for a paper, after the due date you’ll get an email entitled ‘extension request,’ ” he added. “You use a sports contract example in your brief, but oftentimes if the contract ends at the end of the season, in the offseason the player signs a new contract, that’ll be described by most people as ‘player extends for two more years.’ ”

In subsequent discussion, Michel said that since the refineries had exemptions years ago, the issue is not of an immediate extension, but rather something that had lapsed long ago. 

He added that the refineries “haven’t gone out of business in the past when many small refineries had complied.”