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- DTN Headline News
Senators Turning Up RFS Heat
Wednesday, April 18, 2018 6:22AM CDT

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Sen. Charles Grassley, R-Iowa, didn't mince words on Tuesday when talking about EPA granting waivers to the Renewable Fuel Standard while at the same time apparently slow-walking the approval of year-round E15 sales. He said he puts the blame squarely on EPA Administrator Scott Pruitt.

Grassley told agriculture journalists he believes President Donald Trump is firmly behind the RFS but has an EPA administrator acting to the contrary.

"I believe that Pruitt is a loose cannon who is not carrying out the president's wishes," Grassley said.

The president last week indicated his support for allowing year-round E15 sales. Yet the EPA told DTN it had not made a decision on whether to move forward on rulemaking to allow unfettered sales of the 15% ethanol-85% gasoline blend.

EPA's approach has drawn concern from U.S. Secretary of Agriculture Sonny Perdue and biofuel and agriculture interests who fear what they say is ethanol demand destruction.

On Tuesday, Grassley and Sen. Amy Klobuchar, D-Minn., led a bipartisan group of senators in writing a letter to Pruitt, calling on the EPA to stop issuing waivers and to provide more transparency on those waivers. Also signing the letter were Sens. Joni Ernst, R-Iowa; Debbie Stabenow, R-Mich.; Deb Fischer, R-Neb.; Dick Durbin, D-Ill.; John Thune, R-S.D.; Tina Smith, D-Minn.; Roy Blunt, R-Mo.; Claire McCaskill, D-Mo.; Tammy Duckworth, D-Ill.; Heidi Heitkamp, D-N.D.; and Joe Donnelly, D-Ind.

The 13 senators asked Pruitt to provide a full list of refiners receiving the waivers dating back to 2016, as well as a detailed report to Congress describing the justification for the waivers. In addition, the senators asked Pruitt to provide information about EPA's plan on how it will approach future requests.

The EPA has drawn fire for a seeming lack of transparency on waivers dating back to 2016 as well as details about the companies receiving waivers and the amount of biofuel blending excluded.

The agency granted nearly 40 RFS waivers to so-called small refiners since 2016, including about 25 in 2017 alone. Included in last year's total is a request by Andeavor, which posted a $1.5 billion profit last year. Also, the New York Times reported last week that oil giants Exxon and Chevron have requested waivers for 2018.

Estimates are that, to date, the waivers issued could have resulted in more than 1 billion gallons of ethanol not being blended.

In the letter to Pruitt, the senators said waivers were not meant to be for larger refiners.

"Such action would represent a clear violation of your commitments and clearly undermine the president's long-standing support of the RFS," they wrote. "These waivers fall well outside the bounds of the letter or spirit of this provision in the law, which sought to provide flexibility for the smallest of U.S. refiners, and only in cases of genuine hardship. Worse, EPA's actions are already hurting biofuel producers and farmers across the United States at a time when farm income is at the lowest levels since 2006 and retaliatory trade measures from China threaten to deepen the crisis."

The waivers have effectively pushed more 2016 renewable identification numbers, or RINs, biofuel credits back onto the market. The senators argued that has cut demand for actual biofuel gallons to be blended.

"This further reduces incentives for blending, slashing demand for biofuels and feedstocks, and hurting farmers and biofuels companies," they said in the letter. "These waivers could cripple the market for years to come, holding back homegrown biofuels while creating windfall profits for large oil refiners -- the exact opposite of this administration's promise to voters."

They continued, "Perhaps most concerning, these lucrative waivers have reportedly been issued behind closed doors, outside of the public process, while the EPA has simultaneously been working with refineries to pressure President Trump to sign off on a RIN cap that would wreak further havoc on the RFS."

The senators reminded Pruitt of what he said during his confirmation hearing regarding the RFS, "Any steps that the EPA administrator takes need to be done in such a way as to further the objectives of Congress in that statute, not undermine the objectives of Congress in that statute."

Biofuel interests have said the agency should be considering waivers at the time it updates renewable volume obligations (RVO) each year.

The senators asked Pruitt to respond in writing, "describing your commitment and plan to consider future small-refinery waivers only during the annual RVO rulemaking process and commitment to provide full notice and opportunity for comment on any future small-refinery waiver requests."

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

Follow him on Twitter @toddneeleyDTN

(AG/BAS)


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