EPA confirms it will deny ‘gap year’ small refinery exemptions from RFS
In a decision for both the presidential and Senate campaigns in Iowa, the Environmental Protection Agency confirmed Monday the reports from anonymous sources last week that it will not grant oil companies exemptions from the Renewable Fuel Standard for previous years.
The decision won praise from Sen. Chuck Grassley, R-Iowa, and Sen. Joni Ernst, R-Iowa, who is in a close re-election race. Pro-ethanol groups also praised it, but some of the leaders noted there are still other pending decisions on ethanol that are even more important. And the oil industry was furious.
The confirmation came in the form of a notice posted to EPA’s Renewable Fuel Standard Program’s News, Notices and Announcements web page by EPA Administrator Andrew Wheeler.
Wheeler wrote that he was rejecting the petitions from what he described as small refineries because they had not demonstrated that they experienced “disproportionate economic hardship from compliance” with the RFS program, which sets the volumes of ethanol that must be used each year.
Wheeler said that the decision was “nationwide in scope.” He also noted that in January the 10th Circuit U.S. Court of Appeals ruled that EPA had exceeded its authority when it granted three small refineries an exemption for all previous years. Ethanol groups have been pushing EPA to follow that ruling on a national basis.
“This decision follows President [Donald] Trump’s promise to promote domestic biofuel production, support our nation’s farmers, and in turn strengthen our energy independence,” Wheeler said in a news release. “At the EPA, we are delivering on that promise by following the rule-of-law and ensuring 15 billion gallons are blended into the nation’s fuel supply.”
Grassley said that he and Ernst “have long called for ending so-called hardship exemptions for big oil companies.”
“I’m glad the EPA is listening to our feedback and common sense from farmers and biofuel producers,” Grassley said. “The rejection of these exemptions come after a thorough review process from both the EPA and the Department of Energy. I’m proud to partner with Sen. Ernst who has been a relentless advocate in calling for these exemptions to be rejected. She has demonstrated effective leadership holding the EPA accountable on renewable fuels.”
Grassley added, “I applaud President Trump for keeping his word and supporting our farmers and biofuel producers. This is an important step that will allow more gas stations to provide E15 to Iowans year-round without significantly changing their infrastructure. I’m glad to work with Sen. Ernst, who has been a steadfast advocate for our biofuels community and called on the EPA to make this change earlier this year.”
Ernst added, “I’ve been calling for these ‘gap year’ waivers to be thrown out since they were announced. Now, the administration has listened to our calls for action.”
“Today’s announcements will help provide more certainty to our biofuel producers, who have for too-long been yanked around by the EPA, and help increase access to E15, which drives up demand for corn and ethanol.” Ernst said.
“The fight for Iowa’s renewable fuel industry, and our farmers, is not over. I’ll never stop being a relentless advocate for Iowa agriculture — holding EPA to their commitments and making sure the RFS is the law of the land.”
But Theresa Greenfield, Ernst’s Democratic opponent, tweeted, “This delayed, election year announcement does nothing to erase the damage [Joni Ernst] did by voting for a fossil fuel lobbyist to run the EPA, which issued 85 RFS waivers, devastating our farmers.”
“Unlike Ernst, I’ll always put our farmers first, not Big Oil donors,” said Greenfield, who grew up in a farming family.
Rep. Cheri Bustons, D-Ill., the chairwoman of the Democratic Congressional Campaign Committee, said in a statement, “From the very beginning, this administration’s misuse of small refinery exemptions has led to the loss of billions of gallons of biofuel demand and increasingly worsened an already difficult time for America’s farmers. It is deeply disappointing that it took the threat of an upcoming election for this administration to follow the law.
“In the wake of years of broken promises, this administration does not deserve praise for respecting the 10th Circuit Court’s ruling, but after three and a half years of undercutting biofuels demand, I’m glad to see President Trump at least commit to not causing further harm.”
Renewable Fuels Association President and CEO Geoff Cooper said he was pleased EPA officially denied the 54 gap-year petitions, but noted that there another 14 pending petitions under consideration by the Energy Department and said “we look forward to EPA similarly denying” those petitions.
“Rejecting the petitions is simply the right thing to do, and today’s decision marks a big step forward toward fully restoring integrity to the Renewable Fuel Standard,” Cooper said.
“This should serve as the final nail in the coffin of these gap-year petitions, and we are eager to put this dark and sordid chapter in the history of the RFS behind us once and for all.”
“The petitions were never anything more than an absurd and bizarre attempt by the refineries to circumvent the 10th Circuit Court’s decision in the Renewable Fuels Association v. EPA case,” Cooper continued.
“We wholeheartedly agree with EPA’s conclusion that ‘these small refineries did not demonstrate then or now that they experienced a disproportionate economic hardship from compliance with the RFS,’ as such a demonstration would be impossible for these refineries to make. EPA is correct that these refineries ‘do not warrant an exemption’ and we are pleased to see Administrator Wheeler acknowledge that Congress did not intend to exempt small refineries ‘that already successfully complied with their RFS obligations.’”
“We sincerely thank President Trump for stepping in to prevent the oil industry from running roughshod over the RFS and ensuring that blending requirements are not further eroded by unwarranted exemptions. We also extend our heartfelt gratitude to the many members of Congress who led the fight against these illegitimate waivers. We thank them for their dedication to protecting and defending the RFS against baseless attacks.”
National Farmers Union President Rob Larew said, “The fact that EPA has decided not to entertain the unreasonable whims of oil corporations is certainly welcome news for the family farmers and rural Americans whose livelihoods depend on a strong biofuels sector.”
“However, this announcement should have been made many months ago, just after the 10th Circuit Court decision,” Larew said.
“By waiting so long to come to this obvious conclusion, EPA bruised an industry that’s already experiencing reduced demand due to deliberate efforts to undermine the Renewable Fuel Standard and the coronavirus pandemic.
“While today’s decision will offer some much-needed security and relief for family farmers, they are still enduring a great deal of uncertainty and financial pressure. EPA should take additional steps to address these concerns, starting with releasing next year’s RVOS.”
Growth Energy CEO Emily Skor said, “Today’s action lifts a cloud of uncertainty that has been hanging over America’s farmers and biofuel producers since June,. We’re grateful to farm state champions like Sen. Ernst, who has led a bipartisan coalition of lawmakers in the House and Senate and governors across the heartland in speaking out against oil-backed efforts to dodge the law, circumvent the courts, and upend markets.”
American Coalition for Ethanol CEO Brian Jennings said, “We are pleased EPA is heeding the industry’s calls and president’s directive to reject the gap-year petitions.”
“The next logical step is for EPA to once and for all nationally apply the precedent set by the 10th Circuit Court, which likely means denying most of the pending refinery waivers for 2019 and 2020.”
Oil company leaders had told Trump that there are more oil worker voters in the country than farm and ethanol plant workers, and on Monday, the oil industry expressed its displeasure with the announcement.
Chet Thompson, president and CEO of American Fuel & Petrochemical Manufacturers, said in a news release, “The notion that this administration is ‘following the rule of law’ through its latest betrayal of U.S. refinery workers is laughable.”
“We hope the president and Administrator Wheeler feel a sense of responsibility when RFS compliance costs become even more untenable for refineries of all sizes.” Thompson said.
“The legacy of this administration’s handling of RFS will be fewer union refining jobs, facility closures, reduced U.S. refining capacity, and increased imports of foreign biodiesel.
“Telling ethanol interests everything they want to hear in a press release is not going to increase the amount of ethanol that gasoline can absorb or do anything to help farmers and ethanol producers,” Thompson said.
“EPA knows this. And now they need to answer how they plan to correct the 2020 RFS volumes artificially inflated because of small refinery exemptions that will no longer be granted and how they will protect consumers and U.S. energy security by ensuring 2021 standards are achievable.”
Addressing Trump’s tweet last week that gas stations will be allowed to use E10 pumps for E15, a higher blend, Thompson added, “Where E15 is concerned, this administration does not have authority to edit Congress and grant environmental waivers to fuels not expressly allowed in statute.”
“But they are doubling down and choosing to undermine critical consumer and environmental protections at the pump in an attempt to encourage more ethanol sales. Millions of consumers, boaters, motorcyclists, and environmental groups vehemently oppose this and stand to be hurt by the illegal action.”
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