Oil industry seeks reduced biofuels obligations; Iowa Sens. Chuck Grassley, Joni Ernst resist

Source: By Omaha World Herald • Posted: Tuesday, April 21, 2020

Oil-state governors want the Environmental Protection Agency to waive refineries’ obligations to comply with the nation’s biofuels policy, arguing that the coronavirus pandemic is causing the industry economic hardship.

The governors’ request reflects the long-standing tension between oil states and farm states that have benefited the most from the Renewable Fuel Standard, which requires refineries to add plant-based fuels such as corn ethanol and biodiesel from soybeans into the nation’s motor fuels.

The oil industry and its backers in government have resisted the policy from the onset because it eats into their profits. The demands for reduced renewable fuel obligations precede the coronavirus.

The letter sent last week was signed by Republican Govs. Greg Abbott of Texas, Gary Herbert of Utah, Kevin Stitt of Oklahoma and Mark Gordon of Wyoming. Louisiana Gov. John Bel Edwards, a Democrat, also separately requested the exemptions.

Any EPA action to aid the refiners would spark backlash from ardent biofuel allies such as Iowa Republican Sens. Chuck Grassley and Joni Ernst. A spokesman for Grassley said, “Any attempt by EPA to rewrite the RFS statute would be illegal.”

Geoff Cooper, president of the Renewable Fuels Association, said the EPA has no authority to grant relief when the RFS itself is not the cause of the severe economic harm. In this case, the refiners are arguing that the harm is coming from the coronavirus crisis.

The same factors are hurting the ethanol industry, he said.

“A general waiver at this point would only serve to close more ethanol plants and kill more jobs across rural America,” Cooper said.