EPA details broad expansion of biofuel waiver program

Source: By Chris Prentice, Jarrett Renshaw, Reuters • Posted: Friday, September 21, 2018

NEW YORK (Reuters) – The U.S. Environmental Protection Agency (EPA) published new data detailing how it drastically expanded a biofuels waiver program for oil refiners since President Donald Trump’s administration took office, responding to pressure from the corn lobby to boost transparency over the opaque program.

The details published on the EPA’s website on Thursday showed the agency issued exemptions for 29 small refineries for 2017, freeing them from their requirement under the Renewable Fuel Standard to blend biofuels into gasoline and diesel, according to agency data released on Thursday.

That was up from 19 waivers granted for 2016 and 7 in 2015, the EPA said.

The data provides the most complete picture of the EPA’s expansion of the controversial small refinery waiver program to date. The waivers save the oil industry money, but biofuels groups worry they also cut into the nation’s demand for ethanol and other biofuels, and have criticized Trump’s EPA for over using the exemptions.

“Increasing transparency will improve implementation of the RFS and provide stakeholders and the regulated community the certainty and clarity they need to make important business and compliance decisions,” EPA Acting Administrator Andrew Wheeler said in a statement.

The data showed that the number of gallons exempted from the RFS under the 29 waivers granted in 2017 amounted to 13.62 billion, nearly double the 7.8 billion exempted in 2016. More details of the gallons waived are available here: [L2N1W61A7].

The EPA is still considering five waiver requests for 2017, and has received a total of 11 requests for 2018, all of which are also still pending, according to the data.

EPA had previously been more stingy with its waivers. It granted 19 of the 20 waivers requested for the 2016 compliance year – with some of those decisions made in 2017 – but only seven out of 14 requests for 2015.

The RFS requires oil refiners to blend increasing amounts of biofuels like ethanol into their fuel each year, or purchase credits from those that do.

Small refineries can apply for and receive waivers if they demonstrate that compliance with their requirements would cause them financial hardship.

The EPA does not divulge information on who applies for or receives the waivers, arguing the information is business-sensitive, and until now it has been sparing with details on the numbers of waivers and quantities of fuel exempted.

FILE PHOTO: Flags fly outside the U.S. Environmental Protection Agency (EPA) at EPA headquarters in Washington, U.S., July 11, 2018. REUTERS/Ting Shen/File Photo


The expansion of the program occurred mainly under former EPA Administrator Scott Pruitt, who left the post in July. His management of the program had prompted calls from biofuels supporters that the agency release more detail on the waivers.

Pressure mounted after Reuters reported that large refining companies including Chevron, Exxon Mobil, Marathon and Andeavor all had applied for the exemptions, which can be granted based on the size of an individual refinery unit rather than the whole company.

Renewable Fuels Association President and Chief Executive Officer Bob Dinneen described the EPA’s new data release as a “step in the right direction.”

But he said more was needed.

“Market participants and the public deserve to know exactly who is receiving small refinery exemptions and what criteria is being used by EPA in making the decision to grant or deny a waiver request,” he said in an emailed statement.

Prices of blending credits, known as Renewable Identification Numbers (RINs), have plunged as a result of policy uncertainty and expansion of the waiver program. They fetched around 18 cents each on Thursday, traders said, little-changed from the previous session and matching a near 6-1/2-year low struck in June.

After Pruitt’s exit, Wheeler said he would follow up on the work of his predecessor to overhaul the RFS in a way that would satisfy both the oil industry and the biofuels sector.

Additional reporting by Michael Hirtzer in Chicago; Editing by Susan Thomas and Chizu Nomiyama