Ethanol Blog

The EPA continues to underestimate the ability for the biodiesel industry to produce gallons to meet the Renewable Fuel Standard volumes and should adjust the latest volumes to account for about 300 million gallons lost to small refinery waivers, a group of 39 United States senators said in a letter to EPA Acting Administrator Andrew Wheeler on Thursday.

In the agency's latest RFS proposal that closed for public comment last Friday, EPA proposed setting biomass-based diesel for 2020 at 2.43 billion gallons and increased the advanced biofuel volume for 2019 to 4.88 billion gallons.

The industry has continued to contend that is capable of producing even more gallons.

"While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states," the letter said.

"We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program's ability to drive growth. Increasing biomass-based diesel and advance biofuel volumes would encourage investment in capacity and new fuel development. Further, EPA must accurately account for small refinery economic hardship exemptions in the final rule."

The letter is signed by Patty Murray, D-Wash., Roy Blunt, R-Mo., Heidi Heitkamp, D-N.D., Charles Grassley, R-Iowa, Tammy Baldwin, D-Wis., Richard Blumenthal, D-Conn., Sherrod Brown, D-Ohio, Maria Cantwell, D-Wash., Robert P. Casey Jr., D-Pa., Susan Collins, D-Maine, Catherine Cortez Masto, D-Nev., Joe Donnelly, D-Ind., Tammy Duckworth, D-Ill., Richard Durbin, D-Ill., Joni Ernst, R-Iowa, Dianne Feinstein, D-Calif., Deb Fischer, R-Neb., Margaret Wood Hassan, D-N.H., Mazie K. Hirono, D-Hawaii, John Hoeven, R-N.D., Angus King, D-Maine, Amy Klobuchar, D-Minn., Patrick Leahy, D-Vt., Claire McCaskill, D-Mo., Jeffrey Merkley, D-Ore., Jerry Moran, R-Kan., Christopher Murphy, D-Conn., Gary Peters, D-Mich., Jack Reed, D-R.I., Pat Roberts, R-Kan., Bernie Sanders, I-Vt., Jeanne Shaheen, D-N.H., Tina Smith, D-Minn., Debbie Stabenow, D-Mich., John Thune, R-S.D., Elizabeth Warren, D-Mass., Sheldon Whitehouse, D-R.I., Ron Wyden, D-Ore., and Edward Markey, D-Mass.

Although he's not on the list of signees, Sen. Mike Rounds, R-S.D. met with Wheeler on Tuesday of this week to talk about the small refinery exemptions.

On July 26, a group of 21 Republican senators asked Wheeler to not reallocate biofuels gallons to larger refiners. The senators signing on include James Inhofe, R-Okla.; Orrin Hatch, R-Utah; Mike Enzi, R-Wyo.; R-Ga.; John Barrasso, R-Wyo.; Roger Wicker, R-Miss.; James Risch, R-Idaho; Joe Manchin, R-W.V.; John Boozman, R-Ark.; Pat Toomey, R-Pa.; Mike Lee, R-Utah; Jeff Flake, R-Ariz.; Ted Cruz, R-Texas; Shelley Moore Capito, R-W.V.; Bill Cassidy, R-La.; James Lankford, R-Okla.; Tom Cotton, R-Ark.; Steve Daines, R-Mont.; David Perdue, R-Ga.; John Kennedy, R-La.; and Cindy Hyde-Smith, R-Miss.

Former EPA Administrator Scott Pruitt pulled out of a proposal at the last minute that would have reallocated gallons lost to larger refiners, after pressure from refining interests in the days before the latest RVO proposal was made public.

In July, Wheeler indicated the agency may allow year-round E15 sales, but only as part of a deal that would include RFS changes favorable to refiner interests.

EPA said in its latest RFS volumes proposal that it granted waivers totaling 2.25 billion gallons in 2016 and 2017. So far Wheeler's EPA has shown little interest in reallocating those gallons to other RFS obligated parties.

In its proposed RFS volumes and during a public hearing held in Michigan, the agency said it was not taking comments about the small refinery waivers. However, numerous agriculture and biofuels interests have flooded EPA with requests to make an adjustment in the numbers to account for the waivers granted.

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

Follow me on Twitter @toddneeleyDTN

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