Ethanol Blog

Bill Would Require EPA to Reallocate Biofuels Gallons Lost to Waivers

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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While EPA remains in an impasse on requests to reallocate biofuels gallons lost to small refinery waivers of the Renewable Fuel Standard, a bipartisan bill introduced in the U.S. House of Representatives would require the agency to reallocate those gallons.

The EPA granted a total of 49 such waivers for 2016 and 2017 renewable volume obligations. The EPA said in its latest RFS volumes proposal that it waived a total of 2.25 billion gallons those years. EPA Acting Administrator Andrew Wheeler has indicated the agency will continue to consider future waiver requests in the same manner.

Rep. David Young, R-Iowa, and Rep. Collin Peterson, D-Minn., introduced the "Restoring Our Commitment to Renewable Fuels Act" which is a three-page bill that simply states "the administrator of the Environmental Protection Agency shall reallocate (in a manner determined appropriate by the administrator) each gallon of renewable fuel covered by such exemption to refineries, blenders, distributors, and importers subject to a renewable fuel obligation for that calendar year."

In addition, the legislation states refiners and others asking for exemptions would be subject to public disclosure. A number of ethanol and agriculture groups have asked the EPA for information about the waivers, but so far the agency has not responded to those requests.

Young said in a news release on Friday the previous EPA administrator "undercut the Renewable Fuel Standard" in granting waivers to companies that made about $1 billion in profits.

"This legislation will restore our commitment to renewable fuels and keep the promise made by the government to our farmers, producers, and businesses," Young said. "It will also end the secretive practice the EPA has used to issue these waivers behind closed doors with no transparency for the American people."

Peterson said in a news release the agency continues to undermine the RFS.

"The EPA continues to chip away at the RFS by granting unjustified waivers to refineries," he said. "This bill will keep EPA accountable for maintaining the renewable volume obligations set each year, and shed a light on secret deals that are hurting corn and soybean farmers in my district."

On Friday, the University of Missouri's Food and Agriculture Policy Research Institute's published an update to its March 2018 U.S. baseline outlook for agricultural and biofuel markets.

Economists at FAPRI, conclude the industry could lose about 4.6 billion gallons of domestic demand and almost $20 billion in lost sales revenue in the next six years, if the agency continues to grant waivers at its current rate.

U.S. ethanol consumption drops by an average of 761 million gallons annually between 2018 and 2023, or a total of 4.6 billion gallons during the six-year period. That is the equivalent of 1.64 billion bushels of corn demand lost, or nearly 300 million bushels per year, according to FAPRI's numbers.

Read the bill here: https://davidyoung.house.gov/…

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

Follow me on Twitter @toddneeleyDTN

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