Bipartisan group of senators urge EPA to stop issuing RFS waivers

A bipartisan group of 13 senators, led by Sen. Amy Klobuchar, D-MN, and Sen. Chuck Grassley, R-IA, are urging Environmental Protection Agency Administrator Scott Pruitt to cease issuing so-called “hardship” waivers exempting obligated parties from the Renewable Fuel Standard.

The senators also requested that the agency provide topline information about the waivers already issued, disclose whether or not the agency redistributed the waived volume obligations among the non-exempted obligated parties and outline the agency’s plan to make the waiver process more transparent. Sen. Tina Smith, D-MN, joined Klobuchar and Grassley in an April 18 letter to Pruitt.

“We are writing to you regarding the actions the Environmental Protection Agency has taken to undermine commitments President Trump made on the Renewable Fuel Standard to our constituents,” the senators wrote.

“Recent reports indicate dozens of small refiner waivers have been secretly granted to large, multibillion-dollar companies under the guise of the small refinery hardship exemption provision in section 211(o)(9) of the Clean Air Act. This is extremely concerning to us.”

In their letter, the senators cited the confirmation hearing testimony of Pruitt, in which he stated, “Any steps that the EPA administrator takes need to be done in such a way as to further the objectives of Congress in that statute, not undermine the objectives of Congress in that statute.”

The senators also noted Pruitt’s October 2017 letter, in which he stated, “I reiterate my commitment to you and your constituents to act consistent with the text and spirit of the RFS. I take seriously my responsibility to do so in an open and transparent manner that advance the full potential of this program…”

News reports indicate that EPA has already issued 25 “hardship” waivers to large, multibillion-dollar refining companies making billions of dollars in profits since 2016. The senators state that such action would “represent a clear violation of your commitments and clearly undermine the president’s long-standing support of the RFS.

“These waivers fall well outside the bounds of the letter or spirit of this provision in the law, which sought to provide flexibility for the smallest of U.S. refiners, and only in cases of genuine hardship. Worse, EPA’s actions are already hurting biofuel producers and farmers across the United States at a time when farm income is at the lowest levels since 2006 and retaliatory trade measures from China threaten to deepen the crisis.”

In 2015, 37 senators wrote to the EPA requesting that the agency issue a strong Renewable Volume Obligation, citing the RFS’s success in driving economic development, strengthening agriculture markets, and creating hundreds of thousands of clean energy jobs in rural communities.

The senators said early reports indicate that the small refinery waivers Pruitt granted could effectively cut biofuel demand by 1.5 billion gallons, thus effectively lowering President Trump’s commitment to seeing 15 billion gallons of ethanol blended to 13.5 billion. Additionally, once these select refiners are no longer responsible for complying with these 2016 requirements, they are able to sell excess Renewable Identification Numbers back into the market, increasing supply and lowering the price.

“This further reduces incentives for blending, slashing demand for biofuels and feedstocks, and hurting farmers and biofuels companies. These waivers could cripple the market for years to come, holding back homegrown biofuels while creating a windfall profits for large oil refiners—the exact opposite of this administration’s promise to voters,” the letter said.

“Perhaps most concerning, these lucrative waivers have reportedly been issued behind closed doors, outside of the public process, while the EPA has simultaneously been working with refineries to pressure President Trump to sign off on a RIN cap that would wreak further havoc on the RFS.”

The senators requested Pruitt take the following actions immediately:

• Cease issuing any refinery waivers under the RFS;

• Provide a full list of the refiners that have received a refinery waiver in 2016, 2017 or 2018;

• Provide a detailed report to Congress describing EPA’s justification for providing the waivers and if the volumes were redistributed to other obligated parties; and

• Describe EPA’s commitment and plan to consider future small refinery waivers only during the annual RVO rulemaking process and commitment to provide full notice and opportunity for comment on any future small refinery waiver requests.

Klobuchar, Grassley and Smith were joined in the letter by Sens. Joni Ernst, R-IA; Debbie Stabenow, R-MI; Deb Fischer, R-NE; Dick Durbin, D-IL; John Thune, R-SD; Roy Blunt, R-MO; Claire McCaskill, D-MO; Tammy Duckworth, D-IL; Heidi Heitkamp, D-ND; and Joe Donnelly, D-IN.

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In 2016, the former administration released a stronger final rule for 2017. The new standard required a record amount of biofuel to be mixed into our transportation fuel supply next year.

In March, a bipartisan group of senators urged the administration to oppose any changes that would undermine the objectives of the RFS and hinder the growth of rural economies. In October, Klobuchar and Grassley led a bipartisan group of senators in a letter to the EPA calling for a strong RFS as the agency worked toward finalizing its rule on biofuels volume requirements for 2018 under the RFS.

In the letter, the senators urged the continued implementation of the RFS as intended by Congress and the release of a strong final rule that would give consumers more choices at the pump, strengthen the economy, and make the country more secure.

Larry Dreiling can be reached at 785-628-1117 or [email protected].