WASHINGTON, D.C. — Today, U.S. Senator John Barrasso (R-WY), chairman of the Senate Committee on Environment and Public Works (EPW) and Sen. Shelley Moore Capito (R-WV), chair of the EPW Subcommittee on Clean Air and Nuclear Safety, sent a letter to Environmental Protection Agency (EPA) Administrator Scott Pruitt and Energy Secretary Rick Perry calling on them to protect the confidential business information of America’s small refineries.
In the letter, Barrasso and Capito warn that disclosure would harm small refineries and move markets for biofuel credits and publicly traded companies. According to EPA regulations, failure to protect confidential business information is grounds for dismissal and may result in criminal prosecution.
Read the full letter here and below.
Dear Administrator Pruitt and Secretary Perry:
We write to follow up on our letter to you dated March 5, 2018. In that letter, we reaffirmed our strong support for the relief you have provided to small refineries suffering “disproportionate economic hardship” from the Renewable Fuel Standard (RFS). We also expressed deep concern about the attacks on hardship relief and the efforts of some to obtain the confidential business information of small refineries.
Since then, Reuters appears to have obtained such information. We urge you, again, to ensure your staff and contractors do not disclose to any outside parties the confidential and other sensitive information of small refineries that petition for hardship relief. Disclosure of this information would not only compound the harm to small refineries, but may move markets for renewable identification numbers (RINs) and publicly-traded companies.
The Clean Air Act requires EPA to grant relief to any small refinery that suffers disproportionate economic hardship from the RFS. EPA, in consultation with the Department of Energy (DOE), must conduct a detailed, objective analysis based on confidential business information and act within 90 days of receiving a petition. EPA must look at each small refinery on an individual basis – whether or not it is part of a company that also owns other refineries.
During the Obama administration, EPA and DOE raised the threshold for small refineries petitioning for hardship relief and the U.S. Court of Appeals for the Tenth Circuit held their standard to be unlawful. There is nothing in the Act that authorizes EPA to delay or suspend consideration of petitions for hardship relief. Any suggestion otherwise is an interpretation that would not hold up in court.
Historically, EPA and DOE have protected the confidential business information – which includes the identities – of small refineries petitioning for hardship relief. Disclosing this information would give entities selling refined products in the same market as a small refinery a competitive advantage over that refinery. Disclosing this information would also give entities selling RINs to a small refinery an opportunity to extract a higher price from that refinery. This information can even move the entire secondary RINs market, which is measured in billions of dollars.
In the past, in the rare instances in which the identities of the petitioners of hardship relief were disclosed, the petitioners themselves disclosed this information voluntarily because they believed that disclosure outweighed the harm or was necessary under federal securities laws. We think that failure to protect the confidential business information of the 13 publicly-traded companies that own small refineries would also increase the risk of insider trading and securities fraud.
According to EPA’s regulations, failure to protect confidential business information “shall constitute grounds for dismissal, suspension, fine, or other adverse personnel action.” A willful violation “may result in criminal prosecution.” This applies to employees and contractors.
In light of the recent Reuters reports and repeated requests from outside parties for the confidential business information of small refineries, we ask that you remind your staff and contractors of their obligations under the law and the consequences for failing to adhere to the law. We applaud you for providing hardship relief to small refineries, as enacted by Congress and ordered by the federal courts.
Thank you again for your consideration, and we look forward to your response.
John Barrasso, M.D. Shelley Moore Capito
U.S. Subcommittee on Clean Air and Nuclear Safety
On April 12, 2018, Barrasso released a statement on the necessity of the EPA granting hardship relief for small refineries under the renewable fuel standard.
On March 5, 2018, Barrasso and Capito sent a letter to Administrator Pruitt and Energy Sec. Rick Perry emphasizing the importance of granting hardship relief for America’s small refineries. The letter also reminded the Administrator and the Secretary that small refineries submit confidential business and other highly sensitive information that the agencies and their contractors must protect from all outside parties.