EPA proposes E15, RIN regulation changes

The Environmental Protection Agency March 12 proposed regulatory changes to allow gasoline blended with up to 15 percent ethanol—E15—to take advantage of the 1-pounds per square inch Reid Vapor Pressure waiver for the summer months that has historically been applied only to E10.

EPA is also proposing regulatory changes to modify elements of the renewable identification number—or RIN—compliance system under the Renewable Fuel Standard program to enhance transparency in the market and deter price manipulation.

Last Oct. 11, President Donald Trump directed EPA to initiate a rulemaking to expand waivers for E15 and increase the transparency in the RIN market.

“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes by the summer driving season,” EPA Administrator Andrew Wheeler said in a statement. “We will be holding a public hearing at the end of this month to gather important feedback.”

Under the proposed expansion, E15 could be sold year-round without additional RVP control, rather than just eight months of the year.

Proposed reforms to RIN markets include:

Prohibiting certain parties from being able to purchase separated RINs;

Requiring public disclosure when RIN holdings exceed specified thresholds;

Limiting the length of time a non-obligated party can hold RINs; and

Increasing the compliance frequency of the program from once annually to quarterly.

EPA said it welcomes public comment on the proposal and intends to hold a public hearing on March 29. Additional details on the comment period and public hearing will be available shortly.

“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes by the summer driving season,” Wheeler said. The comment period ends on April 29, leaving the EPA a month to review comments from the public and issue a rule before June 1, the traditional cutoff for E15 sales.

Reaction to the proposed regulation set off a chain of statements from many interested parties.

Sen. Chuck Grassley, R-IA, said, “I’m still reviewing the proposed rule, and while I have some concerns about certain details, this is a significant step in the right direction and puts E15 on track for approval by summer driving season. Ending the nonsensical ban on summertime sales of higher blends of ethanol is a no-brainer and a big victory for Iowa, Midwest farmers and the country as whole.

“It’s also a promise made and a promise kept by President Trump and Administrator Wheeler. Consumers should be able to choose what kind of fuel they want to use. Allowing year-round sales of higher blends of ethanol fits in well with President Trump’s mission to end bureaucratic red tape, create jobs in rural America and establish American energy dominance through increased domestic production. The final rule should reflect those goals in keeping with President Trump’s commitments.”

House Agriculture Committee Chairman Collin Peterson, D-MN, said, “I applaud the EPA’s release of this proposed rule. It is long overdue and the result of much hard work on the part of U.S. farmers, the ethanol industry and the Congressional Biofuels Caucus.

“The efforts to bring transparency to the RIN system are needed, but I’m afraid that connecting these two issues in one rule is going to bog down moving forward on both. This would affect the E15 timeline and I would want to make sure it’s done by summer driving season.

“And while I applaud the efforts in this rulemaking, it doesn’t lessen the damage caused by the administration’s misuse of the small refinery exemption.

“I encourage the administration to consider all options to advance the viability of our domestic biofuels industry, including a more efficient pathway process at EPA and ensuring access for biofuels in export markets.”

Renewable Fuels Association President and CEO Geoff Cooper said the proposed rule, “means EPA is one step closer to making good on President Trump’s promise to allow year-round sales of E15. With just 80 days left before the start of the summer driving season, finalizing and implementing the E15 regulatory fix remains a tall order.

“That is why we have urged EPA to separate the year-round E15 provisions from the RIN reform provisions, and move forward as quickly as possible to finalize a practical and defensible year-round E15 solution. With ethanol plants shutting down or idling and farmers experiencing the worst conditions in more than a decade, removing the summertime ban on E15 once and for all would send a desperately needed signal to the marketplace.

“We are carefully reviewing the details of the proposed rule and look forward to providing EPA with extensive technical and legal comments to support an expeditious and legally sound resolution of this decades-old red tape barrier. RFA and its member companies will also testify in support of year-round E15 at the upcoming public hearing.”

National Corn Growers Association President Lynn Chrisp, a Hastings, Nebraska, farmer, said “Today’s proposed rule is great progress to getting the rulemaking completed by the start of the summer driving season, June 1. NCGA appreciates EPA’s efforts to meet this deadline, and we look forward to fully reviewing the content of the proposed rule. We will be providing comments to EPA and urging our membership to provide input during the comment process as well.

“Allowing year-round sales of higher blends of ethanol not only grows a domestic market for farmers, but E15 gives consumers more choice at the pump, a lower price option and greater environmental benefits from a cleaner fuel. It’s time to remove the barrier to all of these benefits.”

The American Petroleum Institute, meanwhile, called EPA’s proposal a lose-lose for U.S. consumers.

“The administration needs to scrap this anti-consumer policy that exacerbates problems with the failed Renewable Fuel Standard,” said API Vice President of Downstream and Industry Operations Frank Macchiarola. “This proposal is a bad deal for consumers.

“Extending the sale of E15 gasoline to the summer months makes no sense. Studies have shown that E15 gasoline can damage vehicle engines and fuel systems—potentially leaving Americans to pay expensive car repair bills due to bad policy out of Washington. In fact, nearly three out of four vehicles on the road today were not designed for E15.

“This decision is also contrary to the law as this waiver is in conflict with the clear language of the Clean Air Act. Further, EPA has agreed numerous times that the agency does not have the authority to extend the Reid Vapor Pressure waiver to E15.

“To make matters worse, the agency’s proposed changes to the RINs market, could increase costs for fuel producers and lead to higher prices for consumers. Additionally, the proposed changes move the goal posts for U.S. energy companies that have already made capital investments and business decisions based on the current RFS program.

“The president asked the EPA to give him a ‘win-win’ deal on the RFS, but this so-called deal only helps the ethanol industry, while exposing the driving public and owners of small power equipment to mis-fueling. Our industry plans to aggressively pursue all available legal remedies to protect consumers from this flawed policy.”

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