EPA approves five more hardship waivers for 2017

March 14, 2019 |

In Washington, the Environmental Protection Agency approved five more 2017 Small Refiner Exemptions to the Renewable Fuel Standard (RFS) and noted that two more petitions have been received for 2018 exemptions, bringing the total to 39.

The backstory

Under the RFS, refineries producing transportation fuel must demonstrate each year that they have blended certain volumes of renewable fuel into gasoline or diesel fuel or acquired credits from others called “RINs” representing all of part of those volume obligations. The RFS allows certain “small” refineries – those with a throughput of less than 75,000 barrels per day – to petition EPA for a temporary extension of an exemption from the renewable fuel volume requirements for a given year if they can show that compliance would impose a “disproportionate economic impact” on them. EPA is required to consult with the Department of Energy to determine whether to grant an exemption.

To date, EPA has yet to provide the public with any information regarding how it assesses small refinery exemption petitions and it has resisted release of almost all information regarding recent exemptions that have been granted, including: (1) the fact that it has granted an exemption; (2) the name of the exempted refinery; (3) the volume of renewable fuel exempted; (4) the years covered by the exemptions; (5) EPA’s analysis of whether the small refinery would be subject to disproportionate economic harm if it had to comply with the RFS.

In 2018, Growth Energy and allied organizations also filed a lawsuit in the D.C. Circuit Court of Appeals and a related administrative petition with EPA on the misuse of small refiner exemptions.

Additionally, Growth Energy and Renewable Fuels Association filed another lawsuit in federal district court in August on 2018, alleging that the Environmental Protection Agency (EPA) and Department of Energy (DOE) have improperly denied agency records requested by Growth Energy, RFA, and others under the Freedom of Information Act (FOIA).

Industry reaction

Renewable Fuels Association CEO Geoff Cooper:

“It’s extremely disappointing and outrageous to see EPA once again allow oil refiners to undermine the RFS and hurt family farms, ethanol producers and our environment by exploiting and abusing a statutory provision that exempts them from their obligations to blend renewable fuels. The RFS was created to preserve the environment, protect America’s energy security and give Americans more affordable options at the pump. These exemptions undercut those goals, and today’s exemptions mean more than 2.6 billion gallons of RFS blending obligations have been erased with the stroke of EPA’s pen. RFA will continue to fight these exemptions through the courts and urge EPA to adopt a more judicious and restrained decision-making process on refiner exemptions, as well as restore lost volume obligations from previous years.”

Growth Energy CEO Emily Skor:

“EPA’s decision to grant five more small refinery exemptions is a slap in the face to rural communities, where farmers have lost a key market for their crops and biofuel plants have shut down or idled production,” said Skor. “EPA continues to hand out exemptions to unidentified refiners, which only strengthens our serious concern that EPA continues to enrich some of the most profitable oil refineries in the world, all in secret.

“Now more than ever, EPA must restore the 2.6 billion gallons of biofuel lost to these small refinery exemptions and ensure that the targets set by EPA are met in earnest, and we will continue to fight tooth and nail to see that happen.”

American Coalition for Ethanol (ACE) CEO Brian Jennings:

“On National Agriculture Day, as farmers are long-suffering from lost market opportunities and low prices, and many farmer-owned ethanol plants across rural America are considering whether to suspend operations or sell out to a bigger company because of limited demand here at home, EPA has further depressed demand for ethanol by rubber stamping five more Small Refinery Exemptions for 2017, and done so without reallocating the blending obligations to other refiners. Any benefit of selling E15 year-round will be wiped-out until and unless EPA gets back to the rule of law when it comes to these refinery waivers under the Renewable Fuel Standard. That’s why ACE has joined with others to petition EPA to reallocate waived gallons and to litigate certain SREs in court.”

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Category: Policy

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