                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 14-3405
                        ___________________________

                               Lion Oil Company

                            lllllllllllllllllllllPetitioner

                                          v.

                        Environmental Protection Agency

                           lllllllllllllllllllllRespondent
                                   ____________

                      Petition for Review of an Order of the
                        Environmental Protection Agency
                                  ____________

                            Submitted: June 11, 2015
                               Filed: July 8, 2015
                                ____________

Before GRUENDER, BEAM, and BENTON, Circuit Judges.
                          ____________

BENTON, Circuit Judge.

       Lion Oil Company petitioned the Environmental Protection Agency for an
exemption from the Renewable Fuel Standard program for 2013. EPA denied the
petition. Lion Oil appeals. Having jurisdiction under 42 U.S.C. § 7607(b)(1), this
court affirms.
                                          I.

      The RFS program sets annual renewable-fuel targets for refineries. See 42
U.S.C. § 7545(o). Refineries must blend their share of renewable fuel or buy credits
from those who exceed blending requirements. Congress exempted “small”
refineries—75,000 barrels of crude oil or less per day—from RFS obligations until
2011. §§ 7545(o)(1)(K), 7545(o)(9)(A)(i). The exemption can be extended. The
Department of the Energy “shall conduct for [EPA] a study to determine whether
compliance with [RFS requirements] would impose a disproportionate economic
hardship on small refineries.” § 7545(o)(9)(A)(ii)(I). If DOE determines a small
refinery “would be subject to a disproportionate economic hardship if required to
comply,” EPA “shall extend the exemption . . . for a period of not less than 2
additional years.” § 7545(o)(9)(A)(ii)(II). Also, “A small refinery may at any time
petition [EPA] for an extension of the exemption . . . for the reason of
disproportionate economic hardship.” § 7545(o)(9)(B)(i). When evaluating such
petitions, EPA, “in consultation with the Secretary of Energy, shall consider the
findings of [DOE’s] study . . . and other economic factors.” § 7545(o)(9)(B)(ii).

       DOE completed its study in 2011. It concluded, “Disproportionate economic
hardship must encompass two broad components: a high cost of compliance relative
to the industry average, and an effect sufficient to cause a significant impairment of
the refinery operations.” To implement these components, DOE created a dual-index
scoring matrix. One index measures disproportionate structural and economic
impact; the other, RFS compliance on refiner viability. The viability index has three
metrics—3a (“Compliance cost eliminates efficiency gains”), 3b (“Individual special
events”), and 3c (“Compliance costs likely to lead to shut down”). DOE defines
“individual special events” as “Refinery specific events (such as a shutdown due to
an accident, and subsequent loss of revenue) in the recent past that have a temporary
negative impact on the ability of the refinery to comply with the RFS.” Originally,


                                         -2-
DOE scored all three metrics as 0 or 10. In a May 2014 addendum to the study, DOE
added 5 as a possible score for metrics 3a and 3b (but not metric 3c).

       Lion Oil, a small refinery in El Dorado, Arkansas, received exemptions through
2012. It petitioned EPA for an exemption for 2013. Citing disruption to a key supply
pipeline and noting its “financial position has not improved,” Lion Oil argued that
RFS compliance would cause disproportionate economic hardship.

       Before EPA considered the petition, DOE first scored Lion Oil on DOE’s
matrix, as amended by the addendum. DOE determined that Lion Oil did not score
high enough on the viability index to show disproportionate economic hardship.
Specifically, on metric 3b, DOE concluded the pipeline disruption was not an
“individual special event” because “several refineries . . . were impacted by the
reduced flow.” (Lion Oil agrees that the pipeline disruption affected four other
refineries.)

      EPA’s 23-page decision summarized DOE’s analysis, a “primary factor” in its
decision. EPA also said it “evaluate[d] viability . . . in the same manner that DOE
considers viability in its own methodology.” EPA did not re-score Lion Oil on
DOE’s matrix. Instead, EPA “independently” analyzed the pipeline disruption and
Lion Oil’s blending capacity, projected RFS-compliance costs, and financial position.

       Lion Oil requested protection of “confidential business information.” EPA sent
its decision to Lion Oil only. At oral argument, Lion Oil’s counsel said, “It’s really
just the specific numbers, the dollar amounts, the numbers of [credits] that are
confidential.”

      Lion Oil appealed to this court under 42 U.S.C. § 7607(b)(1). The statute
“lodges jurisdiction over challenges to ‘any . . . final [EPA] action’ in the Courts of
Appeals.” Alaska Dep’t of Envtl. Conservation v. E.P.A., 540 U.S. 461, 481 (2004),

                                         -3-
quoting § 7607(b)(1). See also Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 477
(2001) (stating § 7607(b)(1) “gives the court jurisdiction”).

      Section 7607(b)(1) has three parts. First, “A petition for review of . . . any
other nationally applicable regulations promulgated, or final action taken, by the
Administrator under this chapter may be filed only in the” D.C. Circuit. 42 U.S.C.
§ 7607(b)(1). Second, “A petition for review of the Administrator’s action . . . which
is locally or regionally applicable may be filed only in the United States Court of
Appeals for the appropriate circuit.” Id. Third, “Notwithstanding the preceding
sentence a petition for review of any action [that is locally or regionally applicable]
may be filed only in the [D.C. Circuit] if such action is based on a determination of
nationwide scope or effect and if in taking such action the Administrator finds and
publishes that such action is based on such a determination.” Id.

      Lion Oil also appealed to the D.C. Circuit, which is holding that appeal in
abeyance pending this court’s decision. EPA then moved to dismiss this appeal,
arguing the D.C. Circuit has exclusive authority to hear Lion Oil’s appeal. This court
took EPA’s motion with the case. This court also granted Lion Oil’s unopposed
motion to seal EPA’s decision and the parties’ joint motion to file their briefs and
appendix under seal.

                                           II.

        The parties agree that EPA’s petition-denial is locally or regionally applicable,
not nationally applicable. This court may hear a petition unless the denial “is based
on a determination of nationwide scope or effect and if in taking such action the
Administrator finds and publishes that such action is based on such a determination.”
See id.




                                          -4-
      In its decision, EPA stated, “This decision is a final agency action of
nationwide scope and effect for purposes of [§ 7607(b)(1)].” EPA sent the decision
to Lion Oil only. EPA made no announcement in any public record, including its
website.

       EPA argues, “Lion Oil’s petition may only be heard in the D.C. Circuit because
EPA has made an express and unambiguous determination of nationwide scope or
effect.” Lion Oil counters that EPA did not publish the necessary finding. Even if
EPA published a finding, Lion Oil argues this court must independently conclude that
EPA’s action “is based on a determination of nationwide scope or effect.”

       Section 7607(b)(1) does not define “publishes.” The parties do not cite cases
or legislative history interpreting the term. “When a term is undefined, we give it its
ordinary meaning.” United States v. Santos, 553 U.S. 507, 511 (2008) (analyzing
dictionary definitions of “proceeds” for purposes of money-laundering statute). The
ordinary meaning of “publish” requires some public distribution. See Webster’s
International Dictionary 1837 (3d ed. 1961) (defining “publish” as “to declare
publicly: make generally known”); Black’s Law Dictionary 1428 (10th ed. 2014)
(defining “publish” as “[t]o distribute copies (of a work) to the public”). See also
Webster’s International Dictionary 1836 (3d ed. 1961) (defining “public” as “of,
relating to, or affecting the people as an organized community”).

      EPA does not assert a different meaning of “publish.” Instead, EPA argues for
an exception because it honored Lion Oil’s request to protect certain confidential
business information. But the plain language of § 7607(b)(1) permits no exception,
and EPA cites no evidence of congressional intent to provide one.

       At oral argument, EPA requested a remand “to allow the agency to follow the
required procedure.” Section § 7607(b)(1) is plain: An appeal of EPA action “which
is locally or regionally applicable may be filed only in” the regional circuit unless, at

                                          -5-
least, “the Administrator finds and publishes that such action is based on” a
determination of nationwide scope or effect. See 42 U.S.C. § 7607(b)(1). Under the
ordinary meaning of “publish,” EPA must make public distribution of its decision, not
just to the petitioner.

      This court may hear Lion Oil’s appeal because EPA did not publish the
necessary finding.1

                                          III.

       This court “shall . . . hold unlawful and set aside agency action, findings, and
conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 5 U.S.C. § 706(2)(A). “[D]ue account shall be taken
of the rule of prejudicial error.” § 706. This court “shall decide all relevant questions
of law, interpret constitutional and statutory provisions, and determine the meaning
or applicability of the terms of an agency action.” Id.




      1
        While § 7607(b)(1) “gives the court jurisdiction,” Whitman, 531 U.S. at 477,
the parties treat § 7607(b)(1) as a venue provision. See Texas Mun. Power Agency
v. E.P.A., 89 F.3d 858, 867 (D.C. Cir. 1996) (“Given the less than clear language, the
structure of the section—dividing cases among the circuits—and the legislative
history indicate that [§ 7607(b)(1)] is framed more as a venue provision.”). Because
EPA failed to publish a finding, this court need not reach whether § 7607(b)(1),
particularly its third sentence, is also a venue provision—just as this court need not
decide whether EPA’s action “is based on a determination of nationwide scope or
effect.”

                                          -6-
                                           A.

       Lion Oil argues that DOE’s “scoring decision [on metric 3b] was flawed, and
EPA acted arbitrarily and capriciously in using it is as a basis for its rejection of Lion
Oil’s petition.”

       “An agency decision is arbitrary or capricious if: the agency has relied on
factors which Congress has not intended it to consider, entirely failed to consider an
important aspect of the problem, offered an explanation for its decision that runs
counter to the evidence before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency expertise.” El Dorado
Chem. Co. v. E.P.A., 763 F.3d 950, 955-56 (8th Cir. 2014). “The scope of our review
is narrow and we are not to substitute our judgment for that of the agency.” Id. at
956, citing Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983).

       EPA did not arbitrarily use DOE’s scoring decision. Rather, EPA did as
Congress directed—“in consultation with the Secretary of Energy, [EPA]
consider[ed] the findings of [DOE’s] study.” See 42 U.S.C. § 7545(o)(9)(B)(ii). EPA
said DOE’s analysis was a “primary factor” in EPA’s decision. EPA “evaluate[d]
viability . . . in the same manner that DOE considers viability in its own
methodology.” EPA then “independently” analyzed the pipeline disruption, noting
it “affected several other refineries, and thus was not a ‘special event’ specific to
Lion.” EPA also contextualized the disruption’s impact on Lion Oil’s financial
position.

      Lion Oil claims DOE’s scoring “was flawed.” To the extent Lion Oil can
challenge DOE’s scoring on metric 3b, it was proper. The study defined “individual
special events” as “Refinery specific events (such as a shutdown due to an accident,
and subsequent loss of revenue) in the recent past that have a temporary negative

                                           -7-
impact on the ability of the refinery to comply with the RFS.” Lion Oil agrees that
the disruption affected four other refineries. By the study’s definition, the disruption
was not “refinery specific.”

                                          B.

      Lion Oil’s other arguments focus on DOE’s addendum. Because EPA, not
DOE, is the respondent, Lion Oil’s theme is that DOE’s scoring was “outcome-
determinative.” Even if DOE’s scoring was “outcome-determinative,” Lion Oil fails
to show how the availability of an intermediate score prejudiced Lion Oil. See 5
U.S.C. § 706.

                                          1.

       Lion Oil argues that the addendum was unlawful because it was not adequately
explained. An agency must “provide reasoned explanation for its action” and “show
that there are good reasons for the new policy.” F.C.C. v. Fox Television Stations,
Inc., 556 U.S. 502, 515 (2009). “But it need not demonstrate to a court’s satisfaction
that the reasons for the new policy are better than the reasons for the old one; it
suffices that the new policy is permissible under the statute, that there are good
reasons for it, and that the agency believes it to be better, which the conscious change
of course adequately indicates.” Id.

       In the addendum, DOE said metrics 3a and 3b measure “impacts that may occur
across a continuum, and providing for the possibility of an intermediate score allows
DOE to more accurately assess an individual refinery’s economic situation.” In its
decision denying Lion Oil’s petition, EPA noted, “DOE added a 5 as a possible
intermediate score . . . to more accurately characterize the impacts of compliance
costs (3a) or individual special events (3b) on a refinery.”


                                          -8-
      Lion Oil argues that DOE and EPA offered “not an explanation for the change
but merely a description of it.” To the contrary, DOE and EPA provided a “reasoned
explanation” and “good reasons.” See id. The intermediate score “allows for more
nuanced and accurate characterization of the” refinery’s situation. See Hermes
Consol., LLC v. E.P.A., 2015 WL 3461360, at *5, *10 (D.C. Cir. June 2, 2015)
(vacating EPA’s denial of small refinery’s exemption petition because EPA conceded
it made two miscalculations about petitioner’s financial data).

                                           2.

      Lion Oil argues that the addendum required notice-and-comment rulemaking.
“Agencies must conduct ‘rule making’ in accord with the [Administrative Procedure
Act’s] notice and comment procedures.” Iowa League of Cities v. E.P.A., 711 F.3d
844, 855 (8th Cir. 2013). See 5 U.S.C. § 553 (“Rule making”). “However, only new
‘legislative’ rules are required to be created pursuant to notice and comment
rulemaking,” not “interpretative rules” or “general statements of policy.” Iowa
League of Cities, 711 F.3d at 855.

       According to Lion Oil, the addendum is “a legislative rule” because EPA “gave
[the addendum] conclusive effect.” Lion Oil cites General Electric Company v.
E.P.A., 290 F.3d 377, 383 (D.C. Cir. 2002): “[A]n agency pronouncement will be
considered binding as a practical matter if it either appears on its face to be binding,
or is applied by the agency in a way that indicates it is binding.”

       Lion Oil’s factual premise fails. EPA did not give the addendum “conclusive
effect,” nor could it, as EPA does not score petitions on DOE’s matrix. Rather, EPA
did as Congress directed—“in consultation with the Secretary of Energy, [EPA]
consider[ed] the findings of [DOE’s] study . . . and other economic factors.” See 42
U.S.C. § 7545(o)(9)(B)(ii). EPA said DOE’s analysis was a “primary factor” in
EPA’s decision, and EPA “evaluate[d] viability . . . in the same manner that DOE

                                          -9-
considers viability in its own methodology.” EPA also “independently” analyzed the
pipeline disruption and Lion Oil’s blending capacity, projected RFS-compliance
costs, and financial position. See Hermes, 2015 WL 3461360, at *6 (rejecting
argument that addendum required notice-and-comment rulemaking because petitioner
“points us to no authority suggesting that the decision to make available a more
refined score within an already-existing metric requires notice-and-comment
procedures” and finding “no basis for creating such a rule”).

                                          3.

       Lion Oil argues that EPA unreasonably interpreted “disproportionate economic
hardship” to mean long-term viability, particularly as credits became more costly.
“Where a statute does not define a term, and Congress has delegated authority to an
agency to implement an ambiguous statute, we are required to accept the agency’s
statutory interpretation, so long as it is reasonable.” Fast v. Applebee’s Int’l, Inc.,
638 F.3d 872, 876 (8th Cir. 2011), citing Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837, 844-45 (1984).

       EPA’s interpretation of “disproportionate economic hardship” is reasonable.
“[T]he relative costs of compliance alone cannot demonstrate economic hardship
because all refineries face a direct cost associated with participation in the program.
Of course, some refineries will face higher costs than others, but whether those costs
impose disproportionate hardship on a given refinery presents a different question.”
Hermes, 2015 WL 3461360, at *5. EPA adopted DOE’s determination “that the best
way to measure ‘hardship’ entailed examining the impact of compliance costs on a
refinery’s ability to maintain profitability and competitiveness—i.e., viability—in the
long term.” Id. “[T]hat choice lies well within the agency’s discretion.” Id.




                                         -10-
                                          4.

       Lion Oil argues the addendum’s “arbitrariness . . . is heightened by EPA’s
failure to apply the revised scoring methodology consistently.” Lion Oil cites a letter
from EPA to the D.C. Circuit in the Hermes case. There, EPA acknowledged that
DOE gave some pre-addendum petitioners a 5 for metrics 3a and 3c—when a 5 was
not yet an option (and still is not for metric 3c).

      Again, EPA, not DOE, is the respondent here. Lion Oil does not show that
EPA relied on DOE’s scoring decisions in those petitions. Even if EPA did, Lion Oil
was not prejudiced. See 5 U.S.C. § 706.

                                    *******

      EPA’s denial of Lion Oil’s petition is affirmed.
                      ______________________________




                                         -11-
