The Environmental Protection Agency is getting taken to court left and right for their many overzealous regulations and intrusions into private industry, with varying results— but on Friday, U.S. Court of Appeals for the D.C. Circuit ruled that, why no, the EPA may not punish the oil industry for their noncompliance with the EPA’s lofty Renewable Fuels Standard mandates in failing to blend a certain amount of cellulosic biofuels into their product, seeing as how those biofuels are not actually available. Via Politico:

EPA sets renewable fuel projections every year that establish the volumes that refiners, importers and blenders must use. For what they don’t — or can’t — buy, industry must purchase credits.

But EPA’s projections for cellulosic biofuels have been wildly off course for several years. The agency predicted production volumes of 5 million gallons, 6.6 million gallons and 8.7 million gallons in 2010, 2011 and 2012, respectively. In reality, no cellulosic biofuels were produced in the U.S. in 2010 and 2011, and only 20,069 gallons were produced in 2012, according to EPA data. …

The court said EPA has plenty of latitude in making its own projections and to differ from lower-volume predictions made by the Energy Information Administration. But the opinion charges that “EPA’s methodology for making its cellulosic biofuel projection did not take neutral aim at accuracy.”

So, the EPA was impossibly demanding in what I’m sure was their completely non-political, entirely magnanimous, no-lobbyists-involved effort to persuade us all that we simply must incorporate more biofuels into our energy portfolio, say what?!

More from the decision:

But the agency crosses the legal line when it tries to impose those standards — which are largely wish lists for future developments using technology that is not yet created — on industry, and inflict punishment when the goals aren’t met, the court ruled in American Petroleum Institute v. EPA.

“Do a good job, cellulosic fuel producers. If you fail, we’ll fine your customers,” the judges scolded in their ruling, in which they found the EPA’s pressure on refiners was an overreach of authority.

A hearty slap on the wrist for the overstepping EPA, but unfortunately, the decision doesn’t dissolve the biofuels requirement under the RFS — it only limits the EPA’s ability to enforce it for 2012.