Farm and ethanol groups blasted oil refiners for asking the Biden administration for waivers from Renewable Fuel Standard obligations, in a letter to EPA Administrator Michael Regan and Brian Reese, director of the National Economic Council on Thursday.
The administration has been under fire following recent media reports that it may be considering providing relief to refiners.
"Oil refiners claiming hardship are using the RFS as a scapegoat for unrelated executive actions to appease dissatisfied investors," the groups wrote in the letter.
"For example, the Monroe Energy (Delta Airlines) refinery is struggling, but not because of the RFS. Refinery executives admitted in an internal memorandum that it has sacrificed profits at the refinery to boost profits at the airline, 'acting against its own financial interest to try to maintain lower jet fuel prices and save the nation's second-largest airline money on fuel, its top operating expense.'"
The letter is signed by the National Farmers Union, Growth Energy, Renewable Fuels Association, National Corn Growers Association, National Biodiesel Board, Advanced Biofuels Business Council and Fuels America, https://fuelsamerica.org/….
"Philadelphia Energy Solutions also blamed the RFS for threatening union jobs," the letter continues.
"However, it was later uncovered that private-equity investors in the refinery were simultaneously cutting worker pensions and health benefits, taking out operating loans against the refinery, ultimately directing over $600 million to the same outside investors funding a pipeline that cut off the facility from cheap crude oil -- all while liquidating RINs (Renewable Identification Numbers) needed for compliance before declaring bankruptcy."
Earlier this week a group of Democratic lawmakers pressed the EPA and the White House to maintain the RFS, https://www.dtnpf.com/….
Oil refiners repeatedly have pointed to higher RINs prices as cost prohibitive to their operations. In recent days, however, those prices have been falling.
"The oil refiners seeking a waiver have chosen -- for more than a decade -- to purchase RIN credits in lieu of blending renewable fuels," the groups said in the letter.
"They are gambling that a perceived threat to union jobs will compel the administration to back away from enforcing the law. However, the Environmental Protection Agency has repeatedly found that merchant refiners 'are generally able to recover the cost of RINs in the prices they receive for their refined products, and therefore high RIN prices do not cause significant harm to refiners.' In effect, refiners publicly label RIN prices as a cost, while privately collecting RIN revenues from outgoing products."
The groups asked the administration to examine recent earnings reports from refining companies to "fully appreciate the truth behind false claims of economic hardship. For example, PBF Energy (Delaware City Refinery) reported a significant increase in operating income (and stock price) in 1Q2021 relative to 1Q2020, during the same time period when refinery owners claim that RIN exposure created economic hardship. RINs have no net impact on refinery earnings."
In light of Biden administration attempts to reduce greenhouse gas emissions, the groups said biofuels already have played a role in reduction.
"According to Department of Energy models, (RFS) has reduced greenhouse gas emissions by almost 1 billion metric tons since enactment of the RFS," the letter said. "In addition to increasing use of low-carbon fuels, the RFS is a vital pathway for American agriculture to take a leadership role in the fight against climate change, a key priority of the Biden-Harris administration.
"Like most clean energy standards, the RFS works by giving obligated parties flexibility in how they comply with the law. Oil refiners comply with the RFS by either blending renewable fuels or purchasing RFS credits from another party that has blended extra renewable energy into the fuel supply.
"We commend the administration's commitment to protecting middle-class jobs and expanding low-carbon U.S. manufacturing. The American biofuel industry is one of the largest employers in the renewable energy sector and maintains one of the highest union densities in the energy sector (e.g., higher than the national private-sector average, and greater than petroleum). These workers cannot afford a return to the biofuel demand destruction that shut down rural manufacturing jobs, deprived farmers of market opportunities, and threatened U.S. progress toward decarbonization."
Todd Neeley can be reached at firstname.lastname@example.org
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