Ethanol Blog

GOP Senators Ask EPA's Regan to Grant RFS General Waivers

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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EPA Administrator Michael Regan has been asked by a group of senators to grant several general waiver requests to the Renewable Fuel Standard. (DTN file photo by Nick Scalise)

With a new administrator in place at the EPA, a group of 13 Republican senators are pushing for the agency to grant a number of general waiver requests to the Renewable Fuel Standard received under the Trump administration.

The agency asked for public comment beginning on Jan. 15, 2021, on a number of proposals including in response to requests for general waivers from a number of governors and refiners, https://www.dtnpf.com/….

On Thursday, Sens. Pat Toomey, John Barrasso, Steve Daines, Shelley Moore Capito, Bill Cassidy, James E. Risch, James Lankford, Cynthia M. Lummis, Mike Lee, John Kennedy, Ted Cruz, James Inhofe and Mike Crapo, pressed on EPA Administrator Michael Regan to grant the requests.

"We request your timely consideration of this request as obligated parties under the RFS struggle with muted demand for refined petroleum products and skyrocketing compliance costs," the senators wrote in a letter.

Currently, D6 renewable identification numbers, or RINs, for corn ethanol have spiked above $1 in recent weeks after falling to below 20 cents in 2020.

"In turn, the states and regions in which these obligated parties operate stand to suffer the precise severe economic harm the waiver provision is designed to prevent," the senators said in the letter to Regan.

"Since 2009, eight refineries have shuttered on the East Coast alone, including the region's largest refinery, Philadelphia Energy Solutions, which closed its doors in 2019. This rash of closures has taken a financial toll on state and local budgets, however, the most devastating consequence has been the thousands of blue collar jobs that have been lost in the process."

According to EPA, however, refiners are able to recover RINs costs through prices at the pump.

In addition, the senators said the COVID-19 pandemic has "exacerbated" conditions for refiners.

"Government-imposed lockdowns have resulted in a sharp decline in miles travelled by U.S. motorists, and year-over-year commercial air passenger traffic is consistently down over 60%," senators wrote.

"Since the beginning of 2020, seven refineries across the U.S. have shut down, idled, or repurposed their operations in the face of declining demand for refined products. Since the beginning of 2020, prices for these artificial credits have risen over 2,000%, approaching the highest levels since the RFS' inception. For some refiners, the cost of purchasing these credits exceeds the costs of payroll and is second only to outlays for crude oil. One merchant refiner has seen its RIN compliance costs jump from $58 million to $172 million over the last year."

The senators said a general waiver would present "no risk of harm" to the biofuels industry.

"This necessary action would provide a degree of relief for these states and avert additional refinery closures and the ensuing economic ripple effects," the letter said.

"If relief is not provided in a timely manner, more refineries will be forced to shut down and place thousands of workers on the unemployment rolls just as the economy is beginning to roar back."

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

Follow me on Twitter @toddneeleyDTN

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