Governors Ask EPA to Reject Retroactive Refinery Exemptions

Source: By Governors' Biofuels Coalition • Posted: Monday, June 29, 2020

Governors Ask EPA to Reject Retroactive Refinery Exemptions

South Dakota, Minnesota, Iowa and Nebraska Governors Say Petroleum Refiners’ Exemptions will cause Further Harm

      Today, South Dakota Governor Kristi Noem and Minnesota Governor Tim Walz sent a letter to EPA Administrator Andrew Wheeler asking that he reject 52 applications for retroactive small refinery exemptions (SREs) from the Renewable Fuel Standard (RFS) for past compliance years. Governor Noem and Governor Walz are the chair and vice chair of the Governors’ Biofuels Coalition. Iowa Governor Kim Reynolds and Nebraska Governor Pete Ricketts, former Coalition chairs, also joined the letter.

“We are concerned that EPA is considering exemptions for prior years that were specifically submitted to evade the court of appeal’s decision by allowing refineries with lapsed SREs to establish a continuous chain of exemptions.  Approving prior-year SREs in this manner ignores the court’s decision and congressional intent and will severely impact farmers and rural communities that support the biofuels industry,” the governors wrote.

Since 2017, EPA has granted 85 SREs, undermining farmers and biofuel producers throughout the nation.  In January, the U.S. Court of Appeals for the Tenth Circuit ruled that EPA could not legally award exemptions to refiners that did not receive waivers in previous years and had failed to demonstrate hardship in any way related to the RFS. If all 52 applications are approved, the market will lose more than two billion gallons of biofuel blending requirements.

“Even before the coronavirus pandemic,” the governors wrote, “the misuse of small refinery waivers under the RFS caused a significant number of plants to partially or fully shut down. The resulting job losses, decreases in commodity purchases and prices, and shortages of co-products affect rural America every day. Your approval of these SRE ‘gap filings’ would only worsen unprecedented economic challenges facing the renewable fuels industry and rural communities.”

“We strongly urge you to reject these applications and work with us to uphold the spirit and intent of the RFS by ensuring a role for biofuels in the nation’s energy future,” the governors concluded.