Dems seek answers from Pruitt before more waivers

Source: Marc Heller, E&E News reporter • Posted: Thursday, June 21, 2018

A dozen members of Congress yesterday asked EPA Administrator Scott Pruitt to stop granting small refineries exemptions from biofuel blending requirements until the agency answers extensive questions about how it’s implementing the renewable fuel standard.

The lawmakers, all Democrats, accused Pruitt in a letter of undermining the RFS by waiving biofuel blending requirements for an increasing number of small refineries, a complaint that’s also been lodged by Republicans from ethanol-producing states.

In their letter, the members asked Pruitt to provide answers to 13 questions, including the number of refineries granted “hardship” exemptions from 2013 through 2017 and the names of all 59 facilities that were granted exemptions from 2011 to 2013.

In addition, they asked Pruitt for details on EPA’s coordination with the Department of Energy on granting the waivers; EPA is required to consult with DOE as part of the process.

Lawmakers complained that EPA’s increased use of waivers, granted to refiners that demonstrate economic hardship, has hurt farmers and rural economies by cutting into ethanol demand, and they asked whether EPA consulted with Agriculture Secretary Sonny Perdue about the potential effect on farmers.

Pruitt has said EPA is required by law to grant waivers when small refineries can show they’d be hurt economically by meeting the RFS requirement — such as by buying renewable fuel credits that rose sharply in price until several months ago.

And while the lawmakers complained that EPA doesn’t identify which refineries receive them, the agency said that’s considered confidential business information — an assertion the lawmakers also questioned.

An exception is for publicly traded companies, which have revealed when they received EPA waivers.

The agency has sent mixed messages on another aspect of the waivers — whether the agency would consider assigning waived biofuel requirements to other refineries, in order to preserve overall volumes. Pruitt seemed to indicate on a visit to Kansas earlier this month that the agency could do so, then backtracked, saying the law wouldn’t allow it.

That sentiment was echoed yesterday by Scott Segal, an attorney at Bracewell LLP representing refiners.

In an email, Segal said, “Just a few days ago, EPA made a clear statement: dealing with reallocation of small refiner exemptions on a retroactive basis is illegal. Period. EPA would be imposing a penalty on refineries that do not qualify for a small refiner exemption but have otherwise been complying with the law.”

Reassigning biofuel volumes to others, Segal said, “inflicts damage on refineries in states that are critical to energy security and that provide significant industrial jobs in states of great concern to the president.”