Appellate Case: 19-9612 Document: 010110754199 Date Filed: 10/17/2022 Page: 1
`FILED
`United States Court of Appeals
`Tenth Circuit
`
`October 17, 2022
`
`Christopher M. Wolpert
`Clerk of Court
`
`PUBLISH
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE TENTH CIRCUIT
`_________________________________
`
`SUNCOR ENERGY (U.S.A.), INC.,
`
` Petitioner,
`
`v.
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`UNITED STATES ENVIRONMENTAL
`PROTECTION AGENCY,
`
` Respondent.
`
`
`
`
`
`No. 19-9612
`
`_________________________________
`
`Petition for Review from an Order of the
`Environmental Protection Agency
`_________________________________
`
`Sean Marotta (Danielle Desaulniers Stempel, with him on the briefs), Hogan Lovells US
`LLP, Washington, DC, appearing for Petitioner.
`
`Caitlin McCusker, Attorney, Environment and Natural Resources Division, United States
`Department of Justice, Washington, DC (Todd Kim, Assistant Attorney General,
`Environment and Natural Resources Division, United States Department of Justice,
`Washington, DC, and Susan Stahle, Attorney, Office of the General Counsel, United
`States Environmental Protection Agency, Washington, DC with her on the brief),
`appearing for Respondent.
`_________________________________
`
`Before HOLMES, Chief Judge, BRISCOE and MORITZ, Circuit Judges.
`_________________________________
`
`BRISCOE, Circuit Judge.
`_________________________________
`
`
`
`Petitioner Suncor Energy (U.S.A.) Inc. (Suncor) owns and operates two adjacent
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`oil refining operations in Commerce City, Colorado. Those operations are commonly
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`known as the East Refinery and the West Refinery. In December 2018, Suncor filed with
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`the United States Environmental Protection Agency (EPA) two petitions, one for the East
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`Refinery and one for the West Refinery, seeking an extension of a temporary exemption
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`that Congress had granted to “small refineries” from complying with the Clean Air Act’s
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`Renewable Fuel Standard Program. The EPA denied the two petitions in a written
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`decision issued on October 25, 2019. Suncor then filed a timely petition for review of the
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`EPA’s decision with this court. Exercising jurisdiction pursuant to 42 U.S.C.
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`§ 7607(b)(1), we grant Suncor’s petition for review, vacate the EPA’s decision, and
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`remand to the EPA for further proceedings.
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`a) The Renewable Fuel Standard Program
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`I
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`“In 2005, Congress amended the Clean Air Act to establish the Renewable Fuel
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`Standard . . . Program” (RFS Program). Growth Energy v. Envtl. Prot. Agency, 5 F.4th 1,
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`7 (D.C. Cir. 2021) (citing Energy Policy Act of 2005, Pub. L. No. 109–58, 119 Stat. 594).
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`The RFS Program, with a goal of “mov[ing] the United States towards greater reliance on
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`clean energy, . . . calls for annual increases in the amount of renewable fuel introduced
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`into the U.S. fuel supply.” Id. More specifically, the RFS Program calls for increasing
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`annual “applicable volumes” of four categories of renewable fuel for the transportation
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`sector: total renewable fuel, advanced biofuel, cellulosic biofuel, and biomass-based
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`diesel. 42 U.S.C. § 7545(o)(2)(B)(i)(I)–(IV). The specified applicable volumes for these
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`first three categories are prescribed by statute for each year through 2022, and for
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`biomass-based diesel through 2012.1 Id. For subsequent years, the EPA is directed by
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`statute to determine the applicable volumes. Id. § 7545(o)(2)(B)(ii).
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`Congress directed the EPA to promulgate regulations “contain[ing] compliance
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`provisions applicable to refineries, blenders, distributors, and importers, as appropriate.”
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`Id. § 7545(o)(2)(A)(iii)(I). Although Congress did not define the term “refinery” in the
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`Clean Air Act, the EPA had in place, at the time that Suncor filed its petitions in this
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`case, a regulation that defined “refinery” to mean “any facility, including but not limited
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`to, a plant, tanker truck, or vessel where gasoline or diesel fuel is produced, including any
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`facility at which blendstocks are combined to produce gasoline or diesel fuel, or at which
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`blendstock is added to gasoline or diesel fuel.”2 40 C.F.R. § 80.2(h) (2019).
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`Congress afforded a “temporary exemption” from the RFS Program for “small
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`refineries.” 42 U.S.C. § 7545(o)(9)(A); see 40 C.F.R. § 80.1441. That “temporary
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`exemption” effectively includes three components. First, Congress granted all small
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`refineries a blanket exemption from the requirements of the RFS Program through 2011.
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`42 U.S.C. § 7545(o)(1)(K), (o)(9)(A)(i). Second, Congress directed the Department of
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`
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`1 For example, “[f]or 2006, Congress ordained the inclusion of 4 billion gallons of
`renewable fuel in the Nation’s fuel supply.” HollyFrontier Cheyenne Refining, LLC v.
`Renewable Fuels Assoc., 141 S. Ct. 2172, 2175 (2021). “By 2022, the number will climb
`to 36 billion gallons.” Id.
`
` The EPA has since amended this regulation to remove the subsections. See Fuels
`Regulatory Streamlining, 85 Fed. Reg. 78412, 78415, 78465–66 (Dec. 4, 2020). The
`regulatory definition of “refinery,” however, remains the same.
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`Energy (DOE) to conduct a study “to determine whether compliance with the
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`requirements of [the RFS Program] would impose a disproportionate economic hardship
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`on small refineries,” and it in turn directed the EPA to extend the temporary exemption
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`“for a period of not less than 2 additional years” for any small refineries identified by the
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`DOE.3 Id. § 7545(o)(9)(A)(ii)(I), (II). Third, Congress authorized small refineries “at
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`any time” to “petition the Administrator for an extension of the [temporary statutory]
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`exemption . . . for the reason of disproportionate economic hardship.” Id.
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`§ 7545(o)(9)(B)(i); see 40 C.F.R. § 80.1441(e)(2). In HollyFrontier, the Supreme Court
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`interpreted this statutory extension provision to mean that “[a] small refinery can apply
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`for (if not always receive) a hardship extension ‘at any time,’” even if it saw a lapse in
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`exemption coverage in a previous year. 141 S. Ct. at 2181.
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`Congress defined the phrase “small refinery” in the Clean Air Act to “mean[] a
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`refinery for which the average aggregate daily crude oil throughput for a calendar year
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`(as determined by dividing the aggregate throughput for the calendar year by the number
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`of days in the calendar year) does not exceed 75,000 barrels.” 42 U.S.C. § 7545(o)(1)(K).
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`The EPA’s own regulations define the phrase “small refinery” in an identical manner,
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`i.e., to mean “a refinery for which the average aggregate daily crude oil throughput (as
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`
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`3 The EPA, pursuant to the findings of the DOE, extended the blanket exemption
`through 2013 for certain refineries. See HollyFrontier Cheyenne Ref., LLC v. Renewable
`Fuels Ass’n, 141 S. Ct. 2172, 2176 (2021). This extension, however, did not cover
`Suncor’s Commerce City facilities.
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`Appellate Case: 19-9612 Document: 010110754199 Date Filed: 10/17/2022 Page: 5
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`determined by dividing the aggregate throughput for the calendar year by the number of
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`days in the calendar year) does not exceed 75,000 barrels.” 40 C.F.R. § 80.1401.
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`b) Suncor and its East and West Refineries
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`Suncor owns and operates what it refers to as the East Refinery and the West
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`Refinery. The East Refinery and the West Refinery are located next to each other in
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`Commerce City, Colorado, which is situated north and east of downtown Denver (the
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`photograph below was taken from the northeast side of Suncor’s facilities looking
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`southwest). Suncor purchased the West Refinery facility in 2003 from ConocoPhillips.
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`Suncor purchased the East Refinery facility in 2005 from Valero Energy.
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`According to Suncor, the East Refinery and the West Refinery separately report
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`their annual crude oil processing throughput data to the Energy Information
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`Administration (EIA). The EPA uses the data reported to the EIA to determine a
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`refinery’s crude oil throughput.
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`c) Suncor’s petitions for small refinery exceptions
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`On December 28, 2018, Suncor filed with the EPA two petitions for extension of
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`the small refinery exception: one for the East Refinery and another for the West Refinery.
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`The petition for the East Refinery alleged that in 2017 the East Refinery “had an average
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`aggregate daily crude oil throughput of no greater than 75,000 barrels per day (bpd)
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`(34,710 bpd for 2017),” and it projected that the average aggregate daily crude oil
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`throughput for 2018 would “remain[] less than 75,000 bpd (32,489 bpd projected for
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`2018).” JA at 1. Similarly, the petition for the West Refinery alleged that in 2017 the
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`West Refinery “had an average aggregate daily crude oil throughput of no greater than
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`75,000 barrels per day (bpd) (63,819 bpd for 2017),” and it projected that the average
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`aggregate daily crude oil throughput for 2018 would “remain[] less than 75,000 bpd
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`(67,528 bpd projected for 2018).” Id. at 24.
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`In July 2019, the EPA contacted Suncor and noted that, “[b]ased on the gasoline
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`and diesel production in the RFS [Program] compliance spreadsheet” that Suncor
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`submitted, “it look[ed] like the East and West refineries [we]re probably operating on an
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`integrated basis.” Id. at 54. To help it “better understand the level of integration
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`between” the East Refinery and the West Refinery, the EPA asked Suncor to provide the
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`EPA with information “showing the stream flows (including approximate volumetric
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`flowrates) between the East and West refineries.” Id. Suncor responded by stating, in
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`pertinent part, that it “respectfully disagree[d] with any attempt to characterize the . . .
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`West Refinery and the . . . East Refinery as an integrated refinery for purposes of the
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`evaluation of its Petitions.” Id. at 56. Suncor in turn asserted that “[t]he legal test for
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`determining whether a refinery qualifies for an extension of its hardship exemption is set
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`forth in 40 C.F.R. § 80.144(e)(2) and § 80.1401,” and “is based solely on the daily
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`average crude oil throughput at each refinery during the applicable calendar years.” Id.
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`(emphasis in original). “Any other factors,” Suncor asserted, such as “the products
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`produced, the precise manner in which they are produced, or arguments about a refinery’s
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`level of integration,” “are legally irrelevant for determination of whether a refinery
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`qualifies as a ‘small refinery.’” Id.
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`Because Suncor did not provide the EPA with any additional information, the EPA
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`“conduct[ed] its own research to understand the present operating configuration of
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`Suncor’s Commerce City Refinery.” Id. at 75. Thereafter, on October 25, 2019, the EPA
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`sent a letter to Suncor concluding “that the East Refinery and the West Refinery [we]re
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`not eligible to petition for a small refinery exemption.” Id. at 73. The EPA began by
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`noting:
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`The statute does not define the word “refinery” or the phrase “average
`aggregate daily crude oil throughput” in the “small refinery” definition.
`EPA has promulgated various definitions of the word “refinery” in its
`regulations which are informative but not definitive for this evaluation.
`EPA has not defined the phrase “average aggregate daily crude oil
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`throughput” in its regulations. The statutory and regulatory definitions
`provide neither guidance nor limits on how EPA must evaluate the words
`and phrases in the definition when determining whether a refinery meets
`the “small refinery” definition. EPA therefore has discretion to choose
`what factors and information it will consider in this evaluation.
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`Id. at 74 (footnote omitted).
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`The EPA in turn noted that in reaching its conclusion, it “considered the extent of
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`Suncor’s integration of the East Refinery and the West Refinery with respect to
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`production of non-renewable gasoline and diesel fuel since annual non-renewable
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`gasoline and diesel fuel production volume is the primary basis for determining Suncor’s
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`obligation to comply with the RFS program.” Id. The EPA noted in particular that
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`“Suncor’s East Refinery partially processes crude oil into gasoline blending components
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`and intermediate distillate feedstocks that are ultimately converted into gasoline, CBOB
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`[(conventional gasoline blendstock for oxygenate blending)], and ULSD [(ultra low
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`sulfur diesel)] in the West Refinery.” Id. The EPA “[t]herefore . . . consider[ed] the
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`aggregate volume of crude oil distilled at both the East Refinery and the West Refinery
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`when determining the eligibility of the East Refinery and the West Refinery to petition as
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`small refineries for an exemption from the RFS.” Id. (footnote omitted). The EPA
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`acknowledged “that the East Refinery and the West Refinery were among the small
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`refineries that received the original small refinery exemption in 2006,” but noted that
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`Suncor has since done significant work to integrate the process operations
`of the two facilities so that they now function as a single refinery with an
`average aggregate daily crude oil throughput that exceeded 75,000 bpd in
`2017 and 2018 and thus no longer meet the definition of a small refinery.
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`Id. In support, the EPA noted that, based upon its research, one of Suncor’s two
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`operations was primarily used to process crude oil into intermediate products and the
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`other of the two operations was in turn primarily used to process those intermediate
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`products into final products like gasoline and diesel. Id. at 74–76.
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`The EPA also noted that Suncor “routinely characterizes the East Refinery and the
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`West Refinery as a single refinery — the Commerce City Refinery — in both public
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`presentations and business reports.” Id. at 76. For example, the EPA noted:
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`• Suncor’s website describes the Commerce City Refinery as a “98,000-
`barrel-per-day refinery [that] produces gasoline, diesel fuel and paving-
`grade asphalt.”
`• Suncor’s 2018 Annual Report lists the Commerce City Refinery as a
`single, 98,000 bpd refinery.
`• Suncor described the Commerce City Refinery as a “nominal 90,000 bpd
`Fuels Refinery in a June 10, 2010 presentation to the Crude Oil Quality
`Association.
`• In a 2005 article following Suncor’s acquisition of the East Refinery from
`Valero, the Oil and Automotive Marketing News quotes Suncor President
`and CEO, Rick George, as stating, “This acquisition provides an immediate
`expansion of our presence in the Rocky Mountain marketplace,” and, “With
`a capacity of 90,000 barrels per day, the integrated operation is expected to
`be more competitive with refineries in Texas and Oklahoma.”
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`Id. (footnotes omitted).
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`
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`Lastly, the EPA pointed to “the unified management chain at the Commerce City
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`Refinery and its operation as a single profit center.” Id. The EPA noted in support:
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`There is one vice president for the Commerce City Refinery: Donald
`Austin. Mr. Austin, as vice-president of the Commerce City Refinery, “is
`responsible for providing overall leadership for safe, reliable and profitable
`operations, and is also accountable for environmental compliance and
`quality of the facility.” Suncor did not submit to the EPA financial data for
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`a separate East Refinery and a West Refinery, but rather provided only
`aggregated financial information for the whole Commerce City Refinery in
`its PI-588 form and financial statements.
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`Id. at 76–77 (emphasis in original) (footnotes omitted).
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`The EPA acknowledged but rejected Suncor’s assertion “that the East Refinery
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`and the West Refinery should be considered separate facilities because they have been
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`issued separate EPA facility identification (“ID”) numbers for use in EPA’s gasoline
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`programs and Title V air permitting,” or because those ID numbers “are referenced by
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`these separate facility ID numbers in EPA consent decrees.” Id. at 77. The EPA noted in
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`support:
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`These separate facility ID numbers were issued and referenced when each
`refinery was owned by previous, separate owners, in contrast to the current
`Suncor ownership and operation of the single integrated refinery.
`Additionally, the objectives of the above-mentioned programs — regulating
`the Reid vapor pressure, sulfur, and benzene content of gasoline, or
`regulating stack emissions from the fired heaters or boilers — are very
`different than those of the RFS program, where compliance (and, threshold
`definitional eligibility for an exemption) is based primarily on annual
`transportation fuel production volume. Since these programs have separate
`objectives that are unrelated to the objectives of the RFS program, they are
`not relevant to EPA’s consideration of Suncor’s eligibility as a small
`refinery under the RFS program.
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`Id. (footnote omitted). Lastly, the EPA “note[d] that Suncor failed to mention that the
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`East Refinery and the West Refinery are registered as a single facility (facility ID 82133)
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`under EPA’s diesel sulfur program, consistent with EPA’s description of Suncor’s
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`integrated ULSD production above.” Id. Indeed, the EPA noted that, in Suncor’s cover
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`letter that accompanied its registration form for the EPA’s diesel sulfur program, Suncor
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`stated: “Our intent is to operate these facilities as a single refinery with respect to EPA’s
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`Clean Diesel Program.” Id. (quotation marks and footnote omitted).
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`The EPA concluded its letter by stating:
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`Based on the information available to EPA, including Suncor’s own
`statements, it is evident that the Suncor East Refinery and the West
`Refinery have been integrated to the point that they are now operated as a
`single refinery with an average daily crude oil throughput that exceeded
`75,000 bpd in both 2017 and 2018. * * * In order to properly account for
`the integrated nature of Suncor’s operation, the most reasonable boundary
`is one encompassing both refineries in order to combine the average
`aggregate daily crude oil throughput and the overall transportation fuel
`production volume from both refineries’ operations.
`
`Given the preceding analysis and cited information, EPA has
`determined that Suncor’s East Refinery and Suncor’s West Refinery do not
`meet the definition of “small refinery” in the CAA and the regulations;
`therefore, these entities are ineligible to petition for a small refinery
`exemption. Accordingly, EPA is declining to evaluate Suncor’s 2018
`petitions for a one-year small refinery exemption for these entities. The
`effect of this determination is that as of January 1, 2018, the gasoline and
`diesel production from the Commerce City Refinery remains subject to the
`percent standards of 40 CFR § 80.1405, and the Commerce City Refinery is
`subject to all other requirements applicable to obligated parties.
`
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`Id. at 77–78.
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`On December 23, 2019, Suncor initiated these proceedings by filing a petition for
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`review of the EPA’s October 25, 2019 decision.
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`II
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`
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`Suncor raises two issues in its petition for review. First, Suncor argues that the
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`East Refinery and the West Refinery each satisfy the Clean Air Act’s definition of “small
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`refinery” and the EPA’s identical regulatory definition of that phrase, but that the EPA
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`ignored the plain meaning of those definitions and effectively rewrote them by assessing
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`whether the East Refinery and the West Refinery were so “integrated” that they must be
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`treated as a single refinery. Second, Suncor argues that even if the Clean Air Act
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`permitted the EPA to consider integration or other factors as part of its determination of
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`whether the East Refinery and West Refinery constituted “small refineries,” the EPA’s
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`development and application of those standards in this case was arbitrary and capricious.
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`As we shall proceed to discuss, we reject Suncor’s first argument and conclude that the
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`statutory and regulatory definition of “small refinery” is ambiguous as applied to the East
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`Refinery and the West Refinery. But we agree, in part, with Suncor’s second argument
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`and, therefore, grant its petition for review, vacate the EPA’s decision, and remand this
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`matter to the EPA for further review.
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`Standards of review
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`We review Suncor’s petition for review under the Administrative Procedure Act
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`(APA). Sinclair Wyoming Refining Co. v. United States Environmental Protection
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`Agency, 887 F.3d 986, 990 (10th Cir. 2017). The APA requires courts, in pertinent part,
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`to “hold unlawful and set aside agency action, findings, and conclusions found to be . . .
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`arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or
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`“in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.” 5
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`U.S.C. §§ 706(2)(A), (C). In conducting our review under the APA, we “review
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`questions of statutory interpretation de novo.” Sinclair, 887 F.3d at 990.
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`Did the EPA ignore the plain meaning of the Clean Air Act’s definition of “small
`refinery” and the EPA’s own regulatory definition of “refinery”?
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`Suncor argues that the EPA ignored the plain meaning of the Clean Air Act’s
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`
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`definition of “small refinery” and the EPA’s own regulatory definition of “refinery,” and
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`effectively rewrote those definitions in this case by assessing whether the East Refinery
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`and the West Refinery were so “integrated” that they must be treated as a single refinery.
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`Suncor argues in support that “[t]he plain meaning and statutory and regulatory definition
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`of ‘small refinery,’ ‘refinery,’ and all of the associated words are clear and unambiguous”
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`and, as a result, the “EPA has no discretion to interpret those terms.” Aplt. Br. at 15.
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`Curiously, the EPA, in its appellate response brief, makes two alternative
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`arguments regarding how it arrived at its decision to deny Suncor’s petitions. First, the
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`EPA argues that it “did not purport to interpret the statutory definition of ‘small refinery’
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`in adjudication of the petitions, but rather made a purely factual determination that the
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`East and West facilities were components of a single refinery.” Aple. Br. at 15–16.
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`Second, and alternatively, the EPA argues that “[t]o the extent that [it] construed the
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`statute at all, it addressed the statute’s silence on the question before it in a reasonable
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`and persuasive manner, and the Court should defer to that reasoning” under Skidmore v.
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`Swift, 323 U.S. 134 (1944). Id. at 16.
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`We conclude that the EPA’s first argument is belied by the record and, in any
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`event, cannot be reconciled with the statutory and regulatory framework that applies to
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`Suncor’s petitions. In its decision denying Suncor’s petitions, the EPA began by noting:
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`The [Clean Air Act] does not define the word “refinery” or the phrase
`“average aggregate daily crude oil throughput” in the “small refinery”
`definition. EPA has promulgated various definitions of the word “refinery”
`in its regulations which are informative but not definitive for this
`evaluation. EPA has not defined the phrase “average aggregate daily crude
`oil throughput” in its regulations. The statutory and regulatory definitions
`provide neither guidance nor limits on how EPA must evaluate the words
`and phrases in the definition when determining whether a refinery meets
`the “small refinery” definition. EPA therefore has discretion to choose
`what factors and information it will consider in this evaluation.
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`Id. at 74 (emphasis added) (footnote omitted). The EPA then considered at length the
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`individual circumstances of Suncor’s East Refinery and West Refinery. Ultimately, the
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`EPA concluded that, based upon its own “analysis and cited information,” the East
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`Refinery and West Refinery were “operat[ing] as a single refinery with an average daily
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`crude oil throughput that exceeded 75,000 bpd in both 2017 and 2018,” Id. at 77, 78.
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`Consequently, the EPA “determined that Suncor’s East Refinery and Suncor’s West
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`Refinery d[id] not meet the definition of ‘small refinery’ in the CAA and regulations.”
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`Id. at 78 (emphasis added).
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`
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`In sum, the EPA’s own written decision indicates that the EPA concluded that the
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`statutory and regulatory definitions of “small refinery” did not provide specific “guidance
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`[]or limits” on how the terms “refinery” and “average aggregate daily crude oil
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`throughput” should be “evaluated.” Id. at 74. Accordingly, the EPA proceeded as
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`though it “ha[d] discretion to choose what factors and information it w[ould] consider in
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`this evaluation.” Id. In other words, it is plain from the record that the EPA effectively
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`treated the term “refinery” as ambiguous, and it in turn exercised its discretion to
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`interpret and apply that statutory term by identifying several factors that it believed were
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`relevant to determining whether the East Refinery and West Refinery each qualified as
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`“refineries.” The EPA also, after exercising its discretion to interpret and apply the
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`statutory term, made a factual determination regarding whether the East Refinery and
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`West Refinery operated together to produce final products.
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`In its alternative argument, the EPA argues that the Clean Air Act “does not
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`provide guidance or limits concerning how EPA should determine the boundaries of ‘a
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`refinery.’” Aple. Br. at 37. “Instead,” the EPA argues, “the statute leaves open the
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`important question of how to determine what constitutes ‘a refinery’ suggesting that
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`‘Congress has delegated to the EPA some discretion in determining whether, in its expert
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`opinion, a petitioner has presented sufficient evidence’ to demonstrate its eligibility.” Id.
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`(quoting WildEarth Guardians v. EPA, 728 F.3d 1075, 1082 (10th Cir. 2013)).
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`“Further,” the EPA argues, “the term ‘refinery’ must be examined in context with the
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`overall RFS program and as part of ‘a symmetrical and coherent regulatory scheme.’” Id.
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`(quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)). The
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`EPA in turn argues that “[n]othing in the statute compels EPA to adopt the broadest
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`possible construction of a ‘refinery’ as Suncor urges.” Id. at 38. The EPA notes that it
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`“has also defined the word ‘refinery’ differently in the context of different regulatory
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`programs depending on their unique structure and purpose,” and “[i]n its decision letter,
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`EPA noted two ‘informative’ instances where it defined ‘refinery’ and ‘petroleum
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`refinery.’” Id. at 38–39 (quoting App. at 74 & n.7). Lastly, the EPA argues that Suncor’s
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`“reading would subvert the RFS program and its small refinery exemption by permitting
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`obligated refineries to draw imaginary lines between its buildings or equipment when
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`petitioning for a small refinery exemption, simply to evade RFS compliance obligations.”
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`Id. at 39. “It cannot be the case,” the EPA argues, “that owners of refineries are free
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`under the statute to subdivide their refining operations into smaller and smaller pieces
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`such that each component processes less than 75,000 barrels of crude oil per day and is
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`thus eligible to petition independently for a small refinery exemption.” Id.
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`With these arguments in mind, we turn first to the text of the Clean Air Act. The
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`Clean Air Act defines the phrase “small refinery” to mean “a refinery for which the
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`average aggregate daily crude oil throughput for a calendar year (as determined by
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`dividing the aggregate throughput for the calendar year by the number of days in the
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`calendar year) does not exceed 75,000 barrels.” 42 U.S.C. § 7545(o)(1)(K). The EPA’s
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`own regulations contain an identical definition of the phrase “small refinery.” 40 C.F.R.
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`§ 80.1401. As we interpret this definition, two requirements must be satisfied. First,
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`there must be a “refinery.” Second, the “average aggregate daily crude oil throughput” of
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`that refinery “for a calendar year” must “not exceed 75,000 barrels.”
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`
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`The Clean Air Act does not define the word “refinery.” Suncor, citing the lack of
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`a statutory definition, asserts that “[t]he common meaning of ‘refinery’ is ‘a building and
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`equipment for refining or purifying metals, oil, or sugar.’” Aplt. Br. at 14 (quoting
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`Refinery, Webster’s Third New Int’l Dictionary 1908 (2002)). We conclude, however,
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`that this common meaning of the term “refinery” is ambiguous as applied to the facts
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`Appellate Case: 19-9612 Document: 010110754199 Date Filed: 10/17/2022 Page: 17
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`found by the EPA in this case. That is because the East Refinery and the West Refinery
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`could each be considered a “refinery,” since they are each comprised of buildings and
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`equipment that are used to refine oil, but they could also together be considered a
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`“refinery” because, collectively, the buildings and equipment from both operations are
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`used to refine crude oil into final products such as gasoline and diesel.
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`
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`The EPA has statutory authority to “prescribe such regulations as are necessary” to
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`carry out its functions under the Clean Air Act. 42 U.S.C. § 7601(a). At the time it
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`denied Suncor’s petitions, the EPA had in place a regulation, 40 C.F.R. § 80.2(h), that
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`defined the term “refinery” in the following manner:
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`Refinery means any facility, including but not limited to, a plant, tanker
`truck, or vessel where gasoline or diesel fuel is produced, including any
`facility at which blendstocks are combined to produce gasoline or diesel
`fuel, or at which blendstock is added to gasoline or diesel fuel.
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`40 C.F.R. § 80.2(h) (2019).4 Suncor argues that this definition is unambiguous and
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`supports its position that the East Refinery and the West Refinery each qualify as a
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`“refinery” for purposes of the Clean Air Act. Aplt. Br. at 14 (“To the extent there is any
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`doubt about what constitutes a ‘refinery,’ EPA’s own definition leads to the same
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`conclusion.”). The EPA, in contrast, asserts that this regulatory definition “fails to
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`resolve the central question” because “[w]hile the East and West facilities satisfy that
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`
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`4 The EPA’s regulations specify that “[t]he definitions of § 80.2” apply to the RFS
`Program. 40 C.F.R. § 80.1401 (2019).
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`regulatory definition, so does the Commerce City Refinery as a whole.” Aple. Br at 40.
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`In other words, the EPA asserts that this regulatory definition is ambiguous as applied to
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`the circumstances at issue here.
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`We agree with the EPA, but with one important caveat. The EPA’s 2019
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`regulatory definition of “refinery” employs, but does not define, the term “facility.”
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`Dictionaries commonly define the term “facility” in a broad manner to mean “the
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`physical means or equipment required for doing something.” Oxford English Dictionary
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`(3d Ed. 2007; modified version published online Dec. 2021). Under this common
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`definition, the East Refinery and the West Refinery could each qualify as a “facility,” but
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`they could also qualify as a “facility” if considered together.5
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`The EPA’s 2019 regulatory definition of “refinery” also employs, but does not
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`define, the term “produced.” The term “produce” is commonly defined to mean “[t]o
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`bring (a thing) into existence from its raw materials or elements, or as the result of a
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`process; to give rise to, bring about, effect, cause, make (an action,