Groups blast RFS waivers, urge reversal from Biden admin

Source: By Marc Heller, E&E News reporter • Posted: Wednesday, January 20, 2021

EPA granted three more biofuel-blending waivers to small refineries yesterday, irking industry groups that believed the agency would hold off pending a Supreme Court ruling on the issue.

As is customary, EPA didn’t say which refineries received the one-year exemptions, but biofuel groups slammed the decision as a favor to oil companies on the Trump administration’s last full day in office. They vowed to challenge the waivers.

Together, the three exemptions amount to around 260 million gallons of biofuel, industry groups said. In addition to two exemptions for the 2019 compliance year, the agency appeared to have reversed a denial from 2018, accounting for 110 million gallons of the total, according to the Renewable Fuels Association.

EPA awards exemptions when refineries demonstrate economic hardship from meeting the requirements, although critics say the companies involved often are highly profitable.

“With just hours remaining in his shameful term as EPA Administrator, Andrew Wheeler couldn’t stop himself from doling out a few more Clean Air Act compliance exemptions to his well-connected friends,” said RFA President and CEO Geoff Cooper in a news release.

Calling the move a “sucker punch” to the industry, Cooper predicted the decision won’t stand as the Biden administration takes a more skeptical approach to refinery exemptions. Biofuel groups had come to believe EPA wouldn’t act on the exemption requests, after Wheeler said he wouldn’t decide until legal appeals were resolved.

“We are confident it will be a hollow victory for the politically connected oil companies receiving today’s waivers, as the new Biden Administration will most certainly act quickly to restore the volumes erased by these waivers,” Cooper said.

The exemptions revealed last night bring the 2018 total to 32. The agency issued 35 for 2017.

Many petitions for exemptions remain pending, including 30 for 2019 and 13 for 2020.

Advocates for exemptions suggested EPA’s moves were modest and possibly held back by political considerations.

“The outgoing Administration seems to have taken minimal actions to address the lingering legal and administrative issues surrounding small refiner exemptions, or SREs,” said the Fueling American Jobs Coalition, representing oil refiners, gas stations and unionized refinery workers.

The group added, “We believe experts within the EPA understand the necessity of adequate safety valves for the renewable fuels program and wanted to go further but were turned back by the White House.”

As the Biden administration takes hold, groups on each side of the renewable fuel standard are watching for how the program evolves. The administration may put new emphasis on advanced biofuels such as renewable diesel, according to the coalition.

The fate of small refinery exemptions depends in large part on a case the Supreme Court will hear this spring involving three exemptions granted to refineries in Utah, Wyoming and Colorado. The 10th U.S. Circuit Court of Appeals threw out those exemptions and said EPA could only extend waivers granted earlier in the program, not issue new ones (Greenwire, Jan. 11).

The National Farmers Union said EPA’s action wasn’t surprising, given the Trump administration’s generosity with waivers in the past few years, and the organization accused officials of indulging the oil industry’s “every whim.”

In addition to the legal entanglements, industries on both sides of the debate are looking to Biden’s nominee for EPA administrator, Michael Regan, to boost mandated biofuel volumes to make up for refinery exemptions. The regulations establishing those volumes are months overdue, and EPA has given refineries more time to comply with RFS requirements for 2020 and small refineries more time to meet 2019 requirements (Greenwire, Jan. 15).

The three extensions granted may be fewer than the “significant” number biofuel advocates had said they feared. Expecting such an action, the American Coalition for Ethanol on Jan. 12 asked EPA Inspector General Sean O’Donnell to preserve agency documents related to the issue.

“We encourage you to ensure that all communications from Administrator Wheeler and any other correspondence of President Trump’s political appointees about the pending SRE waiver petitions be preserved,” the group said. “This should include communications among Trump appointees and EPA career staff with trade groups and law firms who represent oil refineries with waiver petitions pending, as well as with officials or lobbyists of these companies directly.”