Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
Suncor Energy Inc. owns and operates two adjacent oil refining operations in Commerce City, Colorado, which are commonly known as the East and West refinery. In December 2018, Suncor filed two petitions with the Environmental Protection Agency — one for each refinery, seeking an extension or a temporary exemption that Congress granted to “small refineries” from complying with the Clean Air Act’s Renewable Fuel Standard Program.
Congress and the EPA define a “small refinery” as a refinery where the average aggregate daily crude oil throughput doesn’t exceed 75,000 barrels. Suncor alleged the East and West refinery met this requirement in 2017 and was projected to remain under that threshold for 2018.
In July 2019, the EPA contacted Suncor and noted that based on the information Suncor submitted, it looked like the refineries were probably operating on an integrated basis and asked for more information. Suncor responded, disagreeing with the attempt to characterize the refineries as one integrated refinery.
Since Suncor didn’t provide additional information, the EPA conducted its own research and denied the two petitions in October 2019, arguing Suncor’s refineries integration meant the refineries operated as a single refinery with an average daily crude oil throughput exceeding the threshold set by Congress and the EPA. Supporting this argument, the EPA noted Suncor characterizes the refineries as one refinery, and the management chain is unified for a singular refinery and operates as a single profit center. Suncor filed a petition to review the EPA’s decision in December 2019.
Suncor argued the East and West refinery each satisfy the Clean Air Act’s definition of small refinery, and the EPA ignored the plain meaning of those definitions, and even if the Clean Air Act allowed the EPA to consider integration, the development and application of the standards were arbitrary and capricious.
The 10th Circuit rejected Suncor’s first argument and agreed in part with its second argument. The court said while the refineries could be classified as a single refinery, the EPA’s factor of “the unified management chain at the Commerce City Refinery and its operation as a single profit center” has no apparent relation to the definition of a small refinery and the EPA doesn’t offer an explanation.
The 10th Circuit Court of Appeals granted Suncor’s petition for review, vacated the EPA’s decision and remanded the matter to the EPA for further proceedings consistent with the court’s opinion.