Senators ask EPA to end SRE approvals, reallocate waived volumes

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Friday, June 14, 2019

A dozen democratic senators, led by Sens. Amy Klobuchar, D-Minn., and Tammy Duckworth, D-Ill., sent a letter to U.S EPA Administrator Andrew Wheeler June 11 urging the agency to end approval of unjustified small refiner exemption (SRE) applications and reallocate waived volumes.

Within the letter, the senators say they are extremely concerned about the EPA’s recent actions to continue to improperly grant SREs under the Renewable Fuel Standard. “EPA’s continued manipulation and misuse of the small refinery waiver authority is undermining the integrity of the RFS and disadvantaging farmers,” they wrote.

The letter stresses that biofuels are decarbonizing the transportation sector while lowering gas prices, driving economic growth and creating jobs. “Every gallon of biofuels we use displaces a gallon of oil and cuts carbon emissions,” the senators wrote, noting that competition provided by biofuels helps reduce fuel prices.

“Yet, rather than follow congressional intent in the [RFS] and follow through on the promises made to rural America, the EPA and the administration are providing waivers, in secret, to help some of the largest oil companies and refiners evade their compliance obligations under the Clean Air Act,” the senators continued.

The letter notes ethanol prices have fallen to their lowest prices in more than a decade, while renewable identification number (RIN) prices are down more than 80 percent when compared to last year, providing massive relief to refiners that choose to buy credits to comply with the RFS. The letter sites one oil refiner that re-allocated its savings from lower RIN prices and purchased three ethanol plants, noting that transaction calls “into question why refineries really needed these savings if they were not being used to lower expenses or pay employees.”

Within the letter, the senators stress that SREs have increased since 2017, in clear benefit of the oil industry. More than 50 SREs have been approved in the past two years, with 39 SRE applications currently awaiting EPA action. “If these are granted, it will only exacerbate this problem,” the senators wrote, noting every SRE granted negatively impacts the rural economy.

The senators also cites recent news reports that indicate the EPA’s proposal to make the names of refineries receiving SREs public may be in question due to White House interference in the regulatory process on behalf of refiners.

“The small refiner waiver provision was not intended to undermine the RFS to the benefit of the most profitable oil companies in the world,” the senators wrote. “We request that you cease issuing any further small refinery exemptions, immediately reallocate the remaining gallons, and make public the information regarding any recipients of these exemptions.”

The Biotechnology Innovation Organization issued a statement in support of the letter. “The senators in this letter are right to call on EPA to end its practice of granting unjustified RFS waivers,” said Stephanie Batchelor, acting executive vice president of BIO’s industrial and environmental section.” The current policy undercuts American farmers and biofuels producers, generates market uncertainty, and negates the benefits of the agency’s past clean air actions. If the United States is to significantly reduce its transportation sector’s harmful greenhouse gas emissions and bolster U.S. energy security, then we must embrace a renewable fuel future and promote the development of new, innovative biofuels. Reversing the unprecedented rate of waivers, in addition to allowing the year-round use of 15 percent biofuels in gasoline, will put our country on a more sustainable path and uphold the Trump administration’s commitment to our nation’s farmers and biofuels producers. We thank the senators who signed this letter, and BIO will continue to engage with Administrator Wheeler on this important issue.”

In addition to Klobuchar and Duckworth, the letter was signed by Sens. Mazie K. Hirono, D-Hawaii; Richard J. Durbin, D-Ill.; Tina Smith, D-Minn.; Ron Wyden, D-Ore.; Michael Bennet, D-Colo.; Tammy Baldwin, D-Wisc.; Jeffrey A. Merkley, D-Ore.; Debbie Stabenow, D-Mich.; Sherrod Brown, D-Ohio; and Kristen Gillibrand, D-N.Y.

A full copy of the letter can be downloaded from BIO’s website.