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Governors' Biofuels Coalition
NEWS UPDATE May 8, 2020

Governors Ask EPA to Reject Request to Waive RFS

South Dakota Governor Kristi Noem and Minnesota Governor Tim Walz Call the Request Unconscionable

Today, South Dakota Governor Kristi Noem and Minnesota Governor Tim Walz sent a letter to Administrator Wheeler asking that the U.S. Environmental Protection Agency reject a recent request from five oil state governors to waive the Renewable Volume Obligation under the Renewable Fuel Standard (RFS) due to severe economic hardship.  Governor Noem and Governor Walz are the chair and vice chair of the Governors’ Biofuels Coalition.

“The economic fallout from the coronavirus pandemic has hit every sector of our nation’s economy, not just refineries and oil producers.  Before the outbreak, farm income was down over 30 percent compared to 2013 because of small refinery waivers which removed four billion gallons of biofuels from the market,” the governors wrote.

Governor Noem and Governor Walz pointed out that the economic downturn was exacerbated by a pandemic that sent commodity markets into a tailspin.  These circumstances have devasted farmers and destroyed the market for biofuel producers, closing and idling 70 of the states’ ethanol facilities. These shutdowns have had an enormous impact on the rural communities in which these plants are located.

The financial pressure oil refiners are now facing is the result of stay-at-home orders leading to a decrease in driving and the oil price war between Russia and Saudi Arabia ­— not the RFS.  “Granting the requested waiver,” the governors wrote, “would only worsen the economic harm that biofuel producers and agricultural producers are experiencing and would do nothing to improve the refiners’ financial health.”

Courts have ruled that a waiver request must demonstrate the RFS is the direct cause of severe economic harm.  In fact, oil companies have admitted that biofuel credits do not impose a real cost on refiners, and EPA has repeatedly stated that the cost of RINs are passed down the supply chain.

“Undermining the RFS when rural America is struggling economically, farmers are fighting to stay in business, and the biofuels plants are closing is unconscionable,” the governors concluded.

Contacts

  • Larry Pearce (Coalition) 402-651-2948
  • Margaret Hart (Walz) 651-201-6131
  • Kristin Wileman (Noem) 605-290-6493

Note: News clips provided do not necessarily reflect the views of coalition or its member governors.