Oil, biofuels groups urge U.S. EPA deny refiner requests to tweak RFS program | Reuters

Source: By Chris Prentice, Reuters • Posted: Friday, March 3, 2017

A coalition of trade groups representing oil, biofuels and other interests pressed the U.S. government on Thursday to deny requests to tweak the country’s biofuels program, the latest in a series of political maneuvers that have roiled markets.

Some 15 trade groups including the American Petroleum Institute (API), Biotechnology Innovation Organization and the Association of American Railroads wrote a letter urging the U.S. Environmental Protection Agency’s (EPA) new chief Scott Pruitt to deny requests to tweak the program. Those requests came from groups including Valero Energy Corp and Delta Air Lines Inc’s Monroe Energy LLC.

Some industry groups have been concerned that the Trump administration may be reviewing potential changes in the program to shift the onus of blending biofuels into gasoline away from refiners further down the supply chain to gasoline marketers.

The change could require companies such as retailers who sell gasoline to shoulder that load, which would provide relief to refiners including Valero and CVR Energy Inc. The change is opposed by biofuels companies and integrated oil companies, which say it will complicate the program.

The letter came from a broad coalition of groups that have otherwise been at odds over the country’s Renewable Fuel Standard (RFS), the controversial program that requires fuel companies use increasingly volumes of renewable fuels each year.

“The one issue that brings us all together is our belief that the Environmental Protection Agency (EPA) should deny petitions to change the point of obligation for RFS compliance,” the groups said in the letter.

Speculation has mounted that the new administration under Republican President Donald Trump would consider the change, after Trump named billionaire and RFS critic Carl Icahn as a special advisor on regulations. Icahn has been advocating for this change. He owns a majority stake in CVR Energy, which has to comply with the program as it’s currently designed.

The EPA’s public comment period on the so-called “point of obligation” closed last week. A regulatory change from the agency on the issue could take years and cause delays in announcing annual volume requirements, say critics of the change.

Proponents say it would reduce costs for merchant refiners, which do not have capacity to blend biofuels and have to buy paper compliance credits from companies that have.

(Reporting by Chris Prentice; Editing by David Gregorio)