Senators ask EPA for guidance on monitoring production credit

Source: Jason Plautz, E&E reporter • E&E  • Posted: Friday, December 2, 2011

A pair of senators is pushing U.S. EPA to explain the agency’s oversight of a biofuels production credit program after tens of millions of fraudulent credits were sold.

The letter from Sens. James Inhofe (R-Okla.) and Mark Pryor (D-Ark.) concerns the agency’s monitoring of renewable identification numbers (RINs), the 38-digit numbers corresponding to the production of a volume of renewable fuels that can be sold to oil companies. The credits can then be used as offsets to help companies comply with the renewable fuel standard.

However, industry groups and observers have raised questions about the “buyer beware” policy on the credits, since that could leave oil and gas companies on the hook for civil penalties if the credits are fraudulent.

“The effectiveness of [the existing renewable fuel standard] is premised upon RINs reliability,” wrote Inhofe and Pryor. “More importantly, obligated parties that attempt to comply in good faith should not be penalized for doing so.”

The letter to EPA Administrator Lisa Jackson also points out that small businesses and small biofuels producers could be hurt by civil penalties and a “lack of faith in the RIN market.”

The letter includes a list of questions for EPA, including seeking details about how the agency monitors RINs and whether other groups could be pulled in on the effort.

Industry groups last month sent a letter to EPA officials asking for a meeting to address fake RINs (E&E Daily, Nov. 4). The push comes after details emerged about a Maryland man who sold $9 million in fake claims to purchase luxury cars and jewelry.

Click here to read the letter.