Ethanol Blog

While the ethanol and agriculture industries wait for someone in President Donald Trump's administration to stem the tide of small refinery waivers to the Renewable Fuel Standard, yet another oil giant, Marathon Oil, reportedly has asked the EPA for a waiver, according to a report by Reuters on Wednesday.

Large companies like Marathon are taking their chances, largely based on recent agency action to step up the number of waivers granted in the past two years. The wave of requests has continued based on a couple of things.

First, a court recently ruled the EPA should have been granting waivers all along. Second, Congressional budget reporting language attached to appropriations bills during the past three years essentially opened wide the door to any refiner to receive an exemption. That language basically forbids EPA from considering a company's financial returns when granting so-called hardship waivers.

The law only allows refiners that produce 75,000 barrels per day or less to qualify for waivers. Marathon's smallest refinery produces about 93,000 barrels per day.

Sen. Charles Grassley, R-Iowa, said on Tuesday that although he would like to have the budget language changed, he's holding out hope the EPA will administer the waiver program by the "spirit" of the law.

In a statement on Wednesday, Grassley said the waiver was not intended for companies that make billions of dollars in profits.

"That an oil company making billions of dollars in profits even thinks it has a shot at receiving a 'hardship' waiver proves how broken this process is," Grassley said in a statement to DTN.

"The statutory volume obligation for conventional biofuels is 15 billion gallons annually. That's what Congress intended. That's the spirit of the law. That's what President Trump promised. Any changes to the Renewable Fuel Standard have to fix this embarrassing loophole and guarantee 15 billion gallons of ethanol actually get blended."

In a tweet on Wednesday, Grassley questioned EPA's definition of hardship.

"NOTE TO EPA definition of hardship: a condition that is difficult to endure, suffering, deprivation, oppression/surely Marathon doesn't qualify for a waiver They had a net income of $3.4B in 2017 BILLIONS IN PROFITS ISNT HARDSHIP."

Growth Energy Chief Executive Officer Emily Skor said the EPA continues to defy the president's wishes on the RFS.

"Two of the largest corporations in the country are set to create an oil monopoly, and they are still expecting ‘small refiner’ handouts," she said in a statement.

"This is what happens when EPA regulators are permitted to ignore the president's commitments to rural communities. These waivers have already siphoned billions away from farm families to enrich some of the world’s largest oil companies as well as a few well-connected investors like Carl Icahn. Those gallons need to be restored and American consumers need immediate, year-round access to E15."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

(TN)

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