GAO to review Trump admin’s waivers for small refineries

Source: By Marc Heller, E&E News reporter • Posted: Monday, January 13, 2020

The Government Accountability Office will review the Trump administration’s decisions to let certain small refineries sidestep biofuel blending requirements under the renewable fuel standard.

In a letter to Rep. Cindy Axne (D-Iowa) and other lawmakers who urged an investigation, GAO said the request falls under its authority as the investigative arm of Congress.

At issue is whether EPA overstepped in granting exemptions to small refiners. Those exemptions have multiplied during the Trump administration, allowing refineries that demonstrate economic hardship to avert the mandate to blend biofuels into petroleum-based fuels.

Last year, EPA granted 31 such exemptions, drawing criticism from the ethanol industry. With so many exemptions, biofuel groups said, it’s not clear that refineries will blend the annual minimum of 15 billion gallons of conventional ethanol called for under EPA regulations and the RFS law.

“The number of waivers approved has grown exponentially with major corporations like ExxonMobil and Chevron among those that received these economic hardship exemptions,” Axne’s office said in a news release. “This raises real questions about the review process and what other factors that the EPA is considering in approving the waivers.”

Among other concerns, the lawmakers said in an August letter requesting the inquiry, is apparent disagreement between EPA and the Department of Energy over some of the exemptions. EPA has sole authority to grant them but consults with DOE before doing so.

Petroleum groups and others critical of biofuel mandates say EPA is bound by the Clean Air Act to grant exemptions when small refineries can show that the requirement would cause economic hardship and that the Obama administration was too restrictive in agreeing to them.

The American Fuel & Petrochemical Manufacturers said the allowance for exemptions reflect lawmakers’ belief that small refineries are an important part of the fuel supply and that ever-growing volumes of biofuels put a strain on the nation’s fuel supply system. Ethanol blending and consumption are higher than ever, the group said, thanks in part to blending at small refineries.

“Congress understands their importance and exempted all small refineries in the early years of the program,” the AFPM said in a statement today. “It’s no surprise that as RFS mandates have grown to exceed the infrastructure blend wall, small refineries have needed to continue to seek relief from compliance costs that, for some, have exceeded their total payroll. Economic hardship protections are critical for America’s small refineries.”