Grassley Points to Need to Change RFS Waivers Language

Source: By Todd Neeley, Progressive Farmer • Posted: Wednesday, May 23, 2018

Sen. Charles Grassley, R-Iowa, would like to see administrative changes made to how EPA hands out Renewable Fuel Standard waivers to small refiners, estimated by one ethanol industry study to have resulted in about 1.5 billion gallons of lost ethanol blending since 2016.

Though the White House in recent weeks reportedly called on the EPA to examine the waiver program, Grassley told agriculture journalists on Tuesday there continues to be a disconnect between an agency that issues hardship waivers to some companies reporting more than $1 billion in profits, and the intent of the waiver program.

Clearly, language attached to appropriations bills during the past three years states that company profitability is not to be considered when making waiver determinations.

Here is the language in part, “In response to petitions in prior years, the secretary determined that the RFS program would impose a disproportionate economic and structural impact on several small refineries. Despite this determination, the secretary did not recommend, and EPA did not provide, any RFS relief because it determined the refineries were profitable enough to afford the cost of RFS compliance without substantially impacting their viability. The secretary is reminded that the RFS program may impose a disproportionate economic hardship on a small refinery even if the refinery makes enough profit to cover the cost of complying with the program.

“Small refinery profitability does not justify a disproportionate regulatory burden where Congress has explicitly given EPA authority, in consultation with the secretary, to reduce or eliminate this burden.”

The senator was asked about the possibility of changing the language that may be the impetus for EPA’s expansion of the number of waivers handed out in the past two years. Estimates are the agency granted at least 40 waivers total for 2016 and 2017.

“To the extent this goes beyond what really is a hardship case in the language,” he said, “the program has been administered differently. We have to concentrate on how it’s administered. We need to make clear to Pruitt he can’t go down that road. It’s either administered in the spirit of the law or we need to get it changed in the appropriations bill.”Grassley said it may be difficult to push changes to the language through the Senate.

Also on Tuesday, Sen. Joe Donnelly, D-Ind., called on President Donald Trump to take immediate action on approving a waiver to allow year-round sales of E15.

In particular, Donnelly said in a letter to the president that he’s concerned rising gasoline prices will hurt an improving economy in his state.

“According to the U.S. Energy Information Administration, average gas prices are expected to reach almost $3 a gallon next month,” he wrote, “while averaging at least $2.90 a gallon during the April to September summer driving season. That is a 20% increase in fuel costs over last summer’s average of $2.41 a gallon.

“One step that would help mitigate the circumstances causing an increase in gas prices would be to lift the current restrictions on the year-round sale of fuels containing higher blends of biofuels. Currently, in spite of lower evaporative and tailpipe emissions that come with a switch from fuel with 10% ethanol to fuel with 15% ethanol, an Environmental Protection Agency regulation regarding the Reid vapor pressure of fuel prevents retailers in most areas of the country from selling fuels like E15 from June 1 to Sept. 30 each year.”

Donnelly said lifting the restriction would help lower prices at the pump.

Read Donnelly’s letter here: https://www.donnelly.senate.gov/…

 

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