Governors' Biofuels Coalition

Sen. Chuck Grassley (R-Iowa) and other corn-state senators today urged EPA to stop granting waivers from ethanol mandates to refiners that claim economic hardship.

While the waivers are intended for small refineries most affected by the renewable fuel standard, EPA has granted waivers to some of the nation’s biggest petroleum companies, and in numbers far greater than a few years ago (E&E Daily, April 10).

“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,” the lawmakers said in a letter to EPA Administrator Scott Pruitt. “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 emerged as the top issue in recent weeks as Congress, the Trump administration and industry groups grapple with the finer points of biofuel policy. President Trump has repeatedly said he supports the renewable fuel standard, but ethanol industry groups say Pruitt’s actions seem to undermine that position.

Industry groups have been on edge in recent weeks, as the administration alternates between actions and statements that seem to support ethanol mandates and others that don’t. Last week, Trump said he would direct EPA to allow sales of higher-ethanol fuel year-round, lifting summer restrictions (E&E News PM, April 12).

Refining industry sources say the flood of waiver requests EPA has received for small refineries indicates the RFS law needs to be revamped.

Other lawmakers signing the letter were Sens. Amy Klobuchar (D-Minn.), Joni Ernst (R-Iowa), Debbie Stabenow (D-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 senators asked Pruitt to stop issuing waivers and to provide a list of all waivers granted in 2016, 2017 and 2018. They also asked for a detailed report on the agency’s justifications for the waivers and whether the affected volumes of ethanol were distributed to other parties — a move that would indicate how much the total biofuel volumes might have fallen short of targets.

EPA said it granted about 25 waivers since 2016, which is sharply more than in a typical year. Large refiners such as Chevron Corp. and Exxon Mobil Corp. have been reported to be possibly seeking waivers, which EPA grants in secret because of business privacy concerns.

The Renewable Fuels Association called the possibility of waivers for such large, profitable companies “downright offensive and insulting” to farmers and ethanol producers.

Congressional critics of the RFS say the waivers recognize a burden placed on small refineries, which can be subject to high costs of renewable fuel credits if they don’t actually blend biofuel. EPA is required by law to grant hardship waivers if a review by the agency and the Energy Department supports a hardship claim, Senate Environment and Public Works Chairman John Barrasso (R-Wyo.) said in a statement.

“They must look at each small refinery on an individual basis whether or not it is part of a larger company,” Barrasso said. “I applaud Administrator Pruitt and [Energy] Secretary [Rick] Perry for recognizing the burdens of this program. They know that we can’t allow it to hurt our nation’s small refineries.”

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