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Republican Senators Urge Wheeler to not Reallocate Biofuels Gallons Lost to Waivers

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A group of 21 Republican United States senators have asked EPA Acting Administrator Andrew Wheeler to not reallocate biofuels gallons to larger refiners, lost from small refinery Renewable Fuel Standard waivers, in a letter to the agency on Thursday.

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.

In the EPA's latest renewable volume obligation proposal the agency said in 2016 and 2017, it approved 49 of 53 small refinery waiver requests, totaling more than 2 billion gallons of biofuels waived from the RFS. Former EPA Administrator Scott Pruitt pulled out of a proposal at the last minute that would have reallocated those gallons to larger refiners, after pressure from refining interests in the days before the latest RVO proposal was made public.

Earlier this week Wheeler indicated in a press interview that the agency may allow year-round E15 sales, but only as part of a deal that would include RFS changes favorable to refiner interests.

"In recent weeks, media reports indicated that the Environmental Protection Agency considered a proposal to retroactively reallocate the Renewable Fuel Standard compliance obligations from small refineries, which have received hardship relief, to other refineries and importers," the letter to Wheeler said.

"Thankfully, in the proposed rule setting renewable volume obligation for 2019, EPA abandoned this ill-considered plan. However, given the requests from biofuels interests, we are writing this letter to state very clearly our strong opposition to any future resurrection of this proposed policy.

"There is little doubt that retroactively reallocating obligations would only compound the problems with the RFS. Simply put, a retroactive reallocation of small refinery obligations to other obligated parties is illegal and fundamentally unfair, imposing a financial penalty on refineries that have otherwise been in compliance with the law. By so doing, retroactive reallocation violates the principles of due process and administrative law and is clearly not authorized under the Clean Air Act. Further, retroactive reallocation injects radical uncertainty into the market for compliance credits, hurting the U.S. refining base, its workers, and the communities they serve.

"Retroactive reallocation is also inconsistent with sound energy policy. A robust domestic refining sector is a key element to national security, as administrations of both political parties have found. Refineries are a source of high-paying manufacturing jobs, thousands of which are placed at risk when RFS compliance obligations aren't reasonable and when compliance costs escalate.

"All of this is placed in harm's way if EPA retroactively reallocates the obligations of small refineries, which have received hardship relief."

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

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