Oil states seek relief from biofuel mandate

Source: By Josh Siegel, Washington Examiner • Posted: Thursday, April 16, 2020

The coronavirus pandemic creates “extraordinary circumstances” in which depressed demand for fuel is hurting oil refiners, the governors of Texas, Oklahoma, Utah, Wyoming, and Louisiana wrote EPA Administrator Andrew Wheeler on Wednesday. This year’s obligations under the Renewable Fuel Standard “risk transforming the current severe economic harm to existential harm for some of the refineries in our state,” the governors said.

The governors are seeking a waiver from the EPA to exempt refineries from the RFS mandate, which requires a certain amount of biofuels to be blended into the nation’s fuel supply. They note that prices for Renewable Identification Numbers (RINs), credits refiners can purchase to help them comply, have tripled, even as demand for transportation fuel has declined sharply.

Counterpoint: Ethanol producers slammed the governors’ claims as outrageous, arguing the RFS program requirements already “adjust in tandem” with changes in fuel consumption. Depressed fuel demand is hurting the biofuels industry “to an even greater extent: Nearly half of the nation’s ethanol production capacity has been idled as a result of falling gasoline demand,” said Geoff Cooper, president and CEO of the Renewable Fuels Association.