Oil state senators ask EPA to undermine the RFS

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Sunday, October 25, 2020

A group of 15 oil state senators sent a letter to U.S. EPA Administrator Andrew Wheeler on Oct. 21 urging the agency to undermine the Renewable Fuel Standard and set the 2021 renewable volume obligations (RVOs) below the so-called E10 blend wall. They also ask that the 2021 RVOs for advanced and cellulosic biofuels and the 2022 RVO for biomass-based diesel “be set at levels of demonstrated domestic production to ensure compliance feasibility.”

The senators argue the move is needed to account for the unprecedented drop in demand for transportation fuels during the COVID-19 pandemic, and said a general waiver of blend requirements is needed because the maintenance or expansion of the current RVO would impose severe economic harm.

The senators also request that the EPA not reallocate any volumes associated with granted 2021 small refinery exemptions (SREs), nor of prior year volumes—including the 2016 remand. They said that reallocation would “exacerbate market distortions and add to the substantial burdens of compliance.”

The Renewable Fuels Association blasted the senators’ request. “It looks like the focus of the oil industry’s RFS avoidance strategy is shifting from ‘small-refinery waivers’ to ‘all-refinery waivers,’” said Geoff Cooper, president and CEO of the RFA. But this letter from a handful of refinery-state Senators comes nowhere close to satisfying the high standard required to grant a general waiver of the RFS volumes—and EPA knows that. By asking Administrator Wheeler to undercut the 2021 RFS standards to avoid the so-called ‘blend wall,’ these Senators are unashamedly encouraging EPA to ignore clear-cut court decisions and established case law.”

According to the RFA, the U.S. Court of Appeals for the D.C. Circuit in 2017 ruled that EPA had illegally abused its general waiver authority by attempting to lower 2014-2016 RFS volume requirements below the so-called “E10 blend wall,” despite ample availability of renewable fuels to meet the statutory volumes. The court found that the statute “…does not allow EPA to consider…demand-side constraints” when deciding general waiver requests. Yet, that is exactly what the oil-state Senator letter recommends, Cooper said.

The statute also requires petitioners to conclusively demonstrate that compliance with the RFS would cause “severe harm” to the economy of a state, region, or the country, Cooper added. “This flimsy letter makes no such demonstration,” Cooper said. “Instead, the Senators cite COVID-19 as the source of the economic challenges facing the refining sector. But the financial hardship caused by COVID-19 is not unique to the refining sector; the ethanol industry and farmers were hit even harder by the pandemic and are still struggling to recover. All Americans are still hurting from the impacts of COVID-19, but the refiners are opportunistically using the pandemic as an excuse to pursue their long-term objective of tearing down the RFS.”

Producers of renewable fuel have already lost more than 4 billion gallons of RFS requirements in the past three years due to illegally granted small refinery exemptions, and EPA still has not complied with the D.C. Circuit Court’s 2017 order to restore 500 million gallons of illegally waived volume from 2016.

“Enough is enough. EPA should immediately reject this attempt to further undermine the RFS with unjustifiable and unlawful waivers,” Cooper said. “The Senators’ letter should go straight to EPA’s dumpster, which is already littered with other baseless waiver petitions and ridiculous RFS complaints from oil state politicians and refiners.”

The letter is signed by Sens. Shelley Moore Capito, R-W.V.; Michael Enzi, R-Wy.; Mike Crapo, R-Idaho; John Cornyn, R-Texas; John Barrasso, R-Wy.; Roger Wicker, R-Miss.; James Risch, R-Idaho; Pat Toomey, Pa.; Mike Lee, R-Utah; Ted Cruz, R-Texas; Bill Cassidy, R-La.; James Lankford, R-Okla.; Steve Daines, R-Mont.; John Kennedy, R-La.; and Cindy Hyde-Smith, R-Miss.

A full copy of the letter can be downloaded from the RFA website.