Swamp politics is threatening the nation’s refineries

Source: By Rep. Chip Roy, Washington Examiner • Posted: Thursday, July 23, 2020

While refineries across the nation work overtime to produce the fuels that make us go, and more recently, even the hand sanitizers we use to fight COVID-19, politics surrounding the 15-year-old Renewable Fuel Standard threaten to shut them down.

The RFS was put in place in 2005 amid rising fuel costs, war in the Middle East, and uncertainty about our domestic energy future. A lot has changed. The United States now leads the world in energy production, surpassing all expectations at that time. The RFS is, therefore, obsolete policy, propped up only by regional politicos and agribusiness lobbyists who benefit from its inflexible mandates. But the swamp does not easily surrender a good deal.

The RFS requires refiners to blend corn-based ethanol into the nation’s fuel supply at levels set each year by bureaucrats at the Environmental Protection Agency. This annual determination is called the Renewable Volume Obligation. If a refinery cannot blend ethanol, it is required to buy EPA-created compliance credits called RINs, whose price is being run up by Wall Street speculators and hoarders. This is throttling refineries across the country, causing many to spend more on compliance with an obsolete policy than they do on payroll. This issue, coupled with COVID-driven reduced demand, puts refineries in a no-win situation made all the worse by failure to adjust this government mandate.

If elected officials take anything away from the pandemic response, I hope we learn that it is not in the U.S. national security or economic interest to depend on China and other foreign governments for essential goods. To ensure against this, we need robust domestic manufacturing. But if a wave of refineries across the country become uncompetitive because of government mandates like the RFS, it will undermine our independence from gasoline price shocks and raw material availability.

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Holly Frontier, a Dallas-based company, recently announced the closure of their Cheyenne, Wyoming, refinery — a warning of what is to come if we do not change course.

There are options on the table moving forward. The coronavirus outbreak revealed weaknesses in our federal regulatory framework — namely excessive dependence on international supply chains and unnecessary regulations that burden businesses in times of crisis. Fortunately, the Trump administration and numerous state and local governments waived or modified roughly 400 regulations to free up businesses and communities to respond in real time to the pandemic.

I recently introduced H.R. 6691, the Coronavirus Regulatory Repeal Act, to sunset every regulation that was waived during this time, from telemedicine to HIPAA reform, to facilitate a leaner regulatory environment after the pandemic. If these regulations were not needed during a time of crisis, it raises the question of why they were needed in the first place. Along these lines, the Renewable Fuel Standard, the so-called ethanol mandate, deserves the immediate attention of the Trump administration and Congress.

Directly and indirectly, refineries employ tens of thousands in states such as Texas and Pennsylvania — states with the very sort of industrial workers Trump promised to fight for in Washington. It is unconscionable to continue to let federal regulations like the RFS cause so much damage to a nationally important industry. Congress, with the support of the Trump administration, should take up legislation that will fix the RFS. The federal government, and especially the unelected bureaucrats within it, should not be in the business of picking winners and losers.

Chip Roy represents Texas’s 21st Congressional District in the U.S. House of Representatives.