United States Senator Bill Hagerty (R-TN), a member of the Senate Appropriations Committee, along with Senators Shelley Moore Capito (R-WV) and Roger Wicker (R-MS), sent a letter to U.S. Comptroller General Gene Dodaro at the U.S. Government Accountability Office (GAO) seeking a determination concerning whether the Environmental Protection Agency’s (EPA) recent denial of 69 petitions for RFS small refinery exemptions must be submitted to Congress for review under the Congressional Review Act (CRA).

“On June 3, 2022, the Environmental Protection Agency (EPA) announced its decision to deny 69 small refinery exemption (SRE) petitions through the ‘June 2022 Denial of Petitions for RFS Small Refinery Exemptions.’ We are writing to seek your review of whether this Denial constitutes a rule for purposes of the Congressional Review Act,” the Senators wrote.

Despite EPA’s claim that this denial is not a rulemaking that warrants review by Congress, the decision appears to “implement, interpret, and prescribe law and policy,” which meets the definition of a rule for CRA purposes. The GAO has previously decided that similar agency documents constitute rules requiring congressional review, regardless of the label given to the documents by an agency.

The Senators also noted that the denial is not limited to small refineries with pending petitions and has general, future applicability, suggesting that it constitutes a rule. “As it set forth an approach to evaluate SRE petitions, this has future effect, with EPA noting in the Federal Register the proposal would apply to 65 ‘pending/undecided’ petitions… The Denial is also of general applicability since it applies to all small refineries, whether they had a pending hardship petition or not. Therefore, this decision not only applies to all small refineries, but as a practical matter would affect all obligated parties under the national RFS program. The Denial is not limited in scope and would apply nationwide.”

Last month in a Senate Appropriations Committee hearing, Hagerty criticized EPA Administrator Michael Regan for EPA’s denial of all small refinery exemptions and called out the agency for forging ahead with regulatory actions that will further increase fuel prices for consumers who are already facing record-high gas prices.

“[The Denial] substantially affects the rights and obligations of small refineries and related parties. For the reasons above, we seek expedited determination as to whether the Denial constitutes a rule pursuant to the Congressional Review Act,” the Senators concluded.

A copy of the letter to General Dodaro can be found here and below.

Dear Mr. Dodaro: 

On June 3, 2022, the Environmental Protection Agency (EPA) announced its decision to deny 69 small refinery exemption (SRE) petitions through the “June 2022 Denial of Petitions for RFS Small Refinery Exemptions” (hereinafter “Denial”). We are writing to seek your review of whether this Denial constitutes a rule for purposes of the Congressional Review Act.

While EPA asserts its Denial is “not a rulemaking,” the Denial appears to be an agency statement of future effect that is designed to implement, interpret, and prescribe law and policy. The U.S. Government Accountability Office has previously found that agency documents may constitute a “rule” under the Congressional Review Act irrespective of the label given by an agency. The proposed Denial was issued by EPA and made available for public comment in the Federal Register, a process generally required under the Administrative Procedure Act. 

As it set forth an approach to evaluate SRE petitions, this has future effect, with EPA noting in the Federal Register the proposal would apply to 65 “pending/undecided” petitions. The Denial establishes criteria for hardship petitions that would apply to all small refineries, including the recently denied SRE petitions and refineries that wish to submit a petition in the future. EPA also acknowledges in its proposal that the Agency has altered “its statutory interpretation of the Clean Air Act small refinery provisions” and has established a policy that “there can be no disproportionate economic hardship pursuant to the statute” for small refineries, precluding any refinery from being granted relief — now or in the future. This new statutory interpretation and the preclusion of any refinery receiving hardship relief was affirmed in the Denial.

The Denial is also of general applicability since it applies to all small refineries, whether they had a pending hardship petition or not. Therefore, this decision not only applies to all small refineries, but as a practical matter would affect all obligated parties under the national RFS program. The Denial is not limited in scope and would apply nationwide.

Finally, the Denial does not fit within any of the three exceptions set forth in 5 U.S.C. § 804(3)(A)-(C). As noted, it applies generally to parties that fall within its scope and is therefore not a rule of particular applicability. It does not relate to agency management or personnel. And finally, it is not a rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties; rather, as noted, it substantially affects the rights and obligations of small refineries and related parties.

For the reasons above, we seek expedited determination as to whether the Denial constitutes a rule pursuant to the Congressional Review Act.

Thank you for your consideration.

Sincerely,

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