Congressional Biofuels Caucus urges EPA to account for SREs

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Wednesday, September 25, 2019

A bipartisan group of 25 members of the U.S. House of Representatives sent a letter to U.S. EPA Administration Andrew Wheeler on Sept. 20 urging the agency to account for small refinery exemptions (SREs) when setting annual Renewable Fuel Standard blending obligations.

“We are concerned over EPA’s continued abuse of small refinery exemption authority, the uncertainty involved in a possible reset of statutory volumes, and negative economic implications these realities are having on our rural communities,” the representatives wrote.

“The EPA’s recently announced decision to grant 31 [SREs] continues to cast serious doubt on the agency’s ability to administer the RFS consistent with Congressional intent,” they continued. The letter references the 85 SREs the EPA has granted since early 2018, which equals more than 4 billion ethanol-equivalent gallons of renewable fuel. The representatives note these conditions cause caused three ethanol plants to permanently close, with another 14 currently idle.

The biodiesel industry is also experiencing severe impact from the SREs. The letter notes SREs approved over the past three years have caused demand destruction and nearly $7.7 billion in economic losses to the biodiesel and renewable diesel industry. At least eight biodiesel plants have already shut down this year.

The representatives stress that the SREs greatly outweigh the EPA’s proposed 120 million increase contained in its proposed rule to set RFS renewable volume obligations (RVOs) for 2020 and the 2021 RVO for biomass-based diesel. They also state they are troubled the proposed rule does not address a court order to restore 500 million gallons of blending obligations that were inappropriately waived in 2016. “These facts diverge form Congressional intent of the RFS to build a robust domestic biofuels industry that supports rural America,” the representatives wrote.

“There is also unease among our constituents about how the EPA will handle the RFS reset rule, which is currently under review by the Office of Management and Budget,” they wrote. “As EPA considers several environmental factors, the agency needs to incorporate [USDA’s] updated 2018 lifecycle analysis which shows corn-based ethanol results in 43 percent lower greenhouse gas emissions than gasoline when produced at a natural gas-powered ethanol plant.”

The letter is signed by Reps. Collin Peterson, D-Minn.; Roger Marshall, R-Kan.; Dave Loebsack, D-Iowa; Rodney Davis, R-Ill.; Jim Hagedorn, R-Minn.; Cheri Bustos, D-Ill.; Cindy Axne, D-Iowa; Abby Finkenauer, D-Iowa; Angie Craig, D-Minn.; Adrian Smith, R-Neb.; Mike Bost, R-Ill.; Mark Pocan, D-Wisc.; Dusty Johnson, R-S.D.; James Comer, R-Ky.; Darin LaHood, R-Ill.; Don Bacon, R-Neb.; Emanuel Cleaver, D-Mo.; Steve King, R-Iowa; Steve Watkins, R-Kan.; Vicky Hartzler, R-Mo.; Ann Wagner, R-Mo.; James R. Baird, R-Ind.; Jeff Fortenberry, R-Neb.; Adam Kinzinger, R-Ill.; and Ron Kind, D-Wisc.

The Renewable Fuels Association has spoken out to thank the lawmakers for their letter. “We appreciate Chairman Peterson and the other members of the Biofuels Caucus for their continued support of American farmers and ethanol producers, and for recognizing EPA’s legal obligation to account for the impact of refinery waivers in determining annual renewable volume obligations,” said Geoff Cooper, president and CEO of the RFA. “These elected leaders understand that the Renewable Fuel Standard is an important tool for economic growth, energy security and greenhouse gas reduction. They also know that for these benefits to be enjoyed, EPA must faithfully enforce the law as written.”

A full copy of the letter can be downloaded from the RFA website.