France’s largest oil company mulled asking EPA for a ‘hardship’ waiver

Source: By John Siciliano, Washington Examiner • Posted: Wednesday, June 27, 2018

The fourth-largest oil company in the world contemplated asking the Environmental Protection Agency for a “hardship” waiver exempting it from having to blend ethanol into the U.S. gasoline supply, according to a top company official.

Patrick Pouyanne, CEO of French energy giant Total, told reporters on the sidelines of the World Gas Conference in Washington that he sent an email to company lawyers asking, “Why don’t you apply for an exemption?”

The answer he got was “No. Our refinery is too big,” Pouyanne said.

The global oil and natural gas company owns a refinery in Texas, which Pouyanne said has been affected by the high prices of Renewable Identification Number credits, or RINs, which refiners must buy to comply with EPA’s biofuel mandate called the Renewable Fuel Standard.

EPA Administrator Scott Pruitt has come under attack by ethanol supporters for quietly exempting over two dozen oil refineries from having to pay millions of dollars to purchase the credits.

Some of the companies that were granted waivers included very large refinery companies like Andeavor. Large oil companies Exxon and Chevron have also asked for waivers. Many of the companies being granted the waivers do not meet the 75,000 barrel-per-day standard under the program to receive a “hardship” waiver, say critics of EPA’s refinery waiver program under Pruitt. The ethanol industry, biofuel groups, and farmers are suing EPA over what they argue is the illegal use of its authority.

Nevertheless, the waivers that EPA has issued have had a “positive impact” by lowering the RIN prices for all refiners, even those like Total that did not apply for a waiver, Pouyanne said.

The French CEO is no fan of ethanol, renewable fuels, and EPA’s Renewable Fuel Standard.

Pouyanne said the U.S. renewable fuel program was “a mistake done by the Congress some years ago.” He said Congress erred by basing the standard on reaching “some volumes as an absolute number and not as a percentage.” The current target is 36 billion gallons by 2022, instead of setting it as 10 percent of the nation’s fuel market, for example.

He said Europe’s renewable fuel program was based on enacting a percentage.

“The decision was much smarter, for once,” Pouyanne added. “It was enacted as a percentage of the fuel you put into the market.”

In the U.S., there was “not enough volumes put into the market, and so we see the certificates going from 20 cents to 80 cents and refiners suffered,” he explained.

It’s also not great when considering climate change and the need to cut carbon dioxide emissions from fossil fuels, which are blamed for raising the Earth’s temperature.

“To be honest with you, we don’t consider biofuels the best policy,” he added. “Biofuels are not the best way to eliminate CO2 emissions. It’s not possible.”

|