Iowa Democrats call for probe of EPA biofuel waivers

Source: By JAMES Q. LYNCH, Journal Des Moines Bureau • Posted: Thursday, August 22, 2019

CEDAR RAPIDS — Democratic U.S. Reps. Abby Finkenauer and Dave Loebsack are calling for a review of the Environmental Protection Agency’s granting of waivers that exempt small oil refineries from complying with the nation’s biofuel law.

Finkenauer and Loebsack want the Government Accountability Office to investigate how the waiver program is being applied under the Renewable Fuel Standard, which generally requires refineries to blend renewable sources — including corn-based ethanol — into the nation’s fuel supply or to buy credits instead.

“Our concerns stem from the economic consequences to our rural communities created by exempting nearly 4 billion gallons of fuel from the RFS, a standard intended to expand the nation’s renewable fuels sector,” they wrote in a letter to Gene Dodaro, the U.S. comptroller general. “By 2016, the ethanol industry has grown to support over 339,000 U.S. jobs and driven $41 billion in economic activity by supporting corn and soy markets and reducing gasoline prices.”

Finkenauer, Loebsack and other members of the bipartisan House Biofuels Caucus, including Iowa Democratic U.S. Rep. Cindy Axne, have joined Republican U.S. Sens. Joni Ernst and Chuck Grassley in criticizing the waivers they say hurt the renewable fuel industry in the state.

That is how Iowa’s senior U.S. senator feels about the federal government’s 31 exemptions to oil companies, allowing them to circumvent the federal ethanol mandate.

 “They screwed us,” Grassley said last week when asked about the latest round of waivers — 31 — granted by the EPA. In addition to the number of waivers, “it’s that it is being granted to people that really aren’t (experiencing) hardship, and that is where it ought to be identified.”

The fuel standard allows the EPA to provide waivers to small refineries that demonstrate compliance with the rule would create significant economic hardship for the facility. Between 2013 and 2015, the EPA granted no more than eight waivers in a year, according to Loebsack and Finkenauer. But the EPA retroactively approved 19 waivers for 2016, then proceeded to grant 35 waivers in 2017, which is equal to removing a total of 1.82 billion gallons of renewable fuel in 2017 alone.

“With the recent approval of 31 waivers for 2018, it is imperative that we fully understand how EPA is reaching these conclusions despite (the Department of Energy’s) viability analysis,” wrote Finkenauer, who represents the 20-county northeast Iowa 1st District. Loebsack represents the 24-county southeast Iowa 2nd District.

Sen. Joni Ernst added her support to the call for an investigation. After speaking to employees at Dupont Nutrition & Biosciences in Cedar Rapids, which produces enzymes used in biofuels, Ernst said the investigation might increase transparency on how the EPA defines small refinery.

“To me it looks like some of those small refineries are associated with larger refineries like Exxon or Chevron. We do need to get to the bottom of that,” Ernst said.

Illinois Democratic U.S. Sen. Tammy Duckworth asked the inspector general’s office to launch an independent investigation into whether top EPA officials violated the law by inappropriately exempting a number of oil refineries from having to use legally required levels of biofuel.

In granting waivers, EPA Administrator Andrew Wheeler has suggested that the EPA follows the recommendations of the Energy Department. However, a letter from the department to Grassley admitted that the EPA granted at least one waiver in conflict with the agency’s recommendation.

Due to the process used by the EPA to review waiver applications, it’s unknown how many of the recent 31 exemptions are being granted to large and profitable oil companies.

ExxonMobil and Chevron are among those that received these economic hardship exemptions.

 

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