Ethanol Blog

The chances of seeing something done legislatively to address EPA's recent rise in granting small refinery waivers, seems to have improved as bills now have been introduced in both sides of Congress to set a June 1 deadline for filing waiver requests to the Renewable Fuel Standard.

In the U.S. Senate on Friday, Sens. Deb Fischer, R-Neb., Tammy Duckworth, D-Ill.; John Thune, R-S.D.; Joni Ernst, R-Iowa; and Chuck Grassley, R-Iowa; introduced the RFS Integrity Act of 2019. The measure would set a June 1 deadline for filing waiver applications, and require applicants to provide basic information about the requests.

At the end of May, Reps. Collin C. Peterson, D-Minn., and Dusty Johnson, R-S.D., the co-chairmen of the Congressional Biofuels Caucus, introduced the Renewable Fuel Standard Integrity Act of 2019, also setting a June 1 deadline.

The Senate bill also would require EPA to publish on its website petitioners' names, names and locations of facilities requesting waivers, the reasons for requested relief, the time period for relief requested, as well details about the extent to which EPA granted or denied requests.

Since 2018, EPA has granted 54 waivers to the Renewable Fuel Standard for the 2016 and 2017 RFS compliance years, totaling 2.61 billion ethanol-equivalent gallons being taken out of the marketplace. The agency also has 39 waiver applications pending for 2018.

"The key objective of the RFS is to ensure that the renewable fuel volume obligations are met," Grassley said in a statement.

"Giving away exemptions to billion-dollar big oil companies undermines clear congressional intent. The EPA has allowed the law to be undermined for far too long. It shouldn't take legislation to make EPA follow the law of the land, but for some at EPA, excuse-making seems to be a full-time job. This legislation ensures that EPA follows through on the responsibilities it should already be fulfilling."

Iowa Renewable Fuels Association Executive Director Monte Shaw met with EPA Administrator Andrew Wheeler during President Donald Trump's visit to Southwest Iowa Renewable Energy this week, laying out what the industry's expectations are for how the agency implements the RFS.

"He listened politely and heard what I had to say, but there was no meaningful response," Shaw told DTN. "I don't mean that in a bad way, it just wasn't the time or place for a discussion. I was happy he heard my points. I hope some of them stick."

Requiring a June 1 deadline for applications would come five months ahead of when the EPA finalizes biofuels volumes each year, essentially forcing the agency to account for waived biofuels gallons when announcing final renewable volume obligations, or RVOs.

If final legislation passes both chambers and is sent to the president's desk, it essentially would force Trump to side either with biofuels producers or the EPA on small refinery waivers.

The RFS already requires EPA to take future waived gallons into account when setting biofuel volumes. The agency has argued in court that it has been taking waived gallons into account. In 2018, however, the volume of biofuels blended in gasoline dropped for the first time, suggesting waivers may have had some effect.

The biofuels industry has been pressing the EPA to reallocate gallons waived through small refinery waivers, to larger obligated parties to the RFS.

In a brief filed in the U.S. Court of Appeals for the District of Columbia Circuit this week, the Advanced Biofuels Association makes the case that the agency has yet to provide information about changes made to the way the EPA evaluates small refinery waiver requests.

"In response, EPA has employed every procedural delay tactic and raised every jurisdictional obstacle possible to attempt to evade judicial review of its actions," the ABFA said. "The documents that EPA finally disclosed as part of the Certified Index confirm ABFA's initial claims that in granting an unprecedented number of small refinery exemptions based on a newly-adopted methodology, EPA engaged in unlawful, arbitrary and capricious action.

"EPA has acknowledged that its 'current methodology' exists, the decision documents show that it was uniformly used to evaluate dozens of small refinery petitions, and EPA intends to continue applying its changed methodology going forward. The fact that EPA only revealed its methodology to select refining companies rather than to the general public -- thereby arming those obligated parties with inside information enabling advantageous trades in the nationwide RIN marketplace -- does not change the fact that the revised methodology is final, and is therefore subject to judicial review."

At the end of May, Duckworth asked EPA's office of inspector general to investigate the agency's decisions to grant waivers.

According to the U.S. Energy Information Administration, https://www.eia.gov/…, there are 48 refineries that produce 75,000 or fewer barrels per day and would qualify for exemptions. Names on the list include large oil companies, including the likes of ExxonMobil, Valero and others.

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

Follow me on Twitter @toddneeleyDTN

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