Biofuel backers incensed as more small refinery waivers are issued

The Environmental Protection Agency March 14 released information indicating five small refinery exemptions, or SREs, from the federal biofuel mandates have been added to a list of waivers refiners receive. The action waives 366 million gallons of biofuels from Renewable Fuel Standard compliance

The five refineries receiving the exemptions produced approximately 3.4 billion gallons of gasoline and diesel fuel in 2017.

The waivers, ironically announced on National Ag Day, allow small refineries—those with daily output of less than 75,000 gallons of fuel daily—to be exempt from the requirements of the Renewable Fuel Standard.

The announcement grows the number of waivers granted from 2016 and 2017 RFS obligations to 53, amounting to 2.61 billion ethanol-equivalent gallons. Before 2016, SREs totaled less than 300 million gallons per year, according to a release from the National Corn Growers Association.

“This action continues to chip away at the RFS and corn demand, hurting America’s corn farmers. NCGA has called for EPA to account for these lost volumes and disclose which refineries receive these waivers and why the waivers are justified, the release said.

“Currently, EPA has two remaining refinery exemption petitions for 2017. Refineries have also submitted 39 petitions for 2018 exemptions that EPA has yet to make decisions on,” the NCGA said.

Currently, EPA has two remaining refinery exemption petitions for 2017. Refineries have also submitted 39 petitions for 2018 exemptions that EPA has yet to make decisions on.

NCGA is a part of legal actions against the EPA for their abuse of small refinery waivers and will continue to stand up for farmers and a strong RFS.

The NCGA’s missive was one of many negative reactions from the biofuels industry and Sen. Chuck Grassley, R-IA, over EPA’s actions. The National Sorghum Producers said in a statement it was disappointed by the announcement and would continue to advocate for realistic, fair policies that benefit sorghum producers and rural Americans.

“The EPA’s decision to administer extensions to profitable, undisclosed refiners is a concern for biofuel plants and rural communities. Renewable fuels help lower the price of each gallon of gasoline and contribute to America’s energy independence,” NSP said.

Growth Energy CEO Emily Skor said, “EPA’s decision to grant five more small refinery exemptions is a slap in the face to rural communities, where farmers have lost a key market for their crops and biofuel plants have shut down or idled production.

“EPA continues to hand out exemptions to unidentified refiners, which only strengthens our serious concern that EPA continues to enrich some of the most profitable oil refineries in the world, all in secret Now more than ever, EPA must restore the 2.6 billion gallons of biofuel lost to these small refinery exemptions and ensure that the targets set by EPA are met in earnest, and we will continue to fight tooth and nail to see that happen.”

Renewable Fuels Association President and CEO Geoff Cooper said, “It’s extremely disappointing and outrageous to see EPA once again allow oil refiners to undermine the RFS and hurt family farms, ethanol producers and our environment by exploiting and abusing a statutory provision that exempts them from their obligations to blend renewable fuels.

“The RFS was created to preserve the environment, protect America’s energy security and give Americans more affordable options at the pump. These exemptions undercut those goals, and (they) mean more than 2.6 billion gallons of RFS blending obligations have been erased with the stroke of EPA’s pen. RFA will continue to fight these exemptions through the courts and urge EPA to adopt a more judicious and restrained decision-making process on refiner exemptions, as well as restore lost volume obligations from previous years.”

American Coalition for Ethanol CEO Brian Jennings said, “On National Agriculture Day, as farmers are long-suffering from lost market opportunities and low prices, and many farmer-owned ethanol plants across rural America are considering whether to suspend operations or sell out to a bigger company because of limited demand here at home, EPA has further depressed demand for ethanol by rubber stamping five more Small Refinery Exemptions for 2017, and done so without reallocating the blending obligations to other refiners.”

“Any benefit of selling E15 year-round will be wiped-out until and unless EPA gets back to the rule of law when it comes to these refinery waivers under the Renewable Fuel Standard. That’s why ACE has joined with others to petition EPA to reallocate waived gallons and to litigate certain SREs in court.”

National Biodiesel Board Vice President of Federal Affairs Kurt Kovarik said, “EPA Administrator Andrew Wheeler is unfortunately following in the footsteps of Scott Pruitt, undercutting demand for biodiesel and renewable diesel by handing out retroactive small refinery exemptions to every refinery that asks for one.”

“It appears to be business-as-usual at EPA, with no effort to ensure that renewable volume obligations are made whole following the exemptions. America’s farmers, biofuel producers, and the environment are directly harmed.

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“The 2017 volumes for biomass-based diesel were set at 2 billion gallons, well below the industry’s proven ability to produce fuels. Now, the retroactive small refinery exemptions for 2017 have cut the obligation by a total of 240 million gallons or 12 percent.

“Because they’re retroactive exemptions, the reduced demand for biomass-based diesel will hit our industry throughout 2019. This is just another action by EPA to put big oil interests over America’s soy farmers and biodiesel producers.”

“The five new small refinery exemptions reduced the 2017 Renewable Volume Obligation for biomass-based diesel and biodiesel by an additional 48 million gallons. Previously granted exemptions had reduced the 2017 RVO by 192 million gallons. EPA’s small refinery exemptions for 2015, 2016 and 2017 have now reduced biomass-based diesel demand by more than 360 million gallons.”

National Farmers Union President Roger Johnson in his statement, noted that for the first time in two decades, ethanol consumption declined in the United States from 2017 to 2018 due to the SRE waivers, which have destroyed demand for at least 2.6 billion gallons of ethanol.

“U.S. farmers and ethanol producers are struggling through the most difficult economy in years while this administration undermines its own promises to support the ethanol industry,” Johnson said.

“The actions on the part of the Trump administration to subvert the will of Congress, undermine the positive growth of the U.S. biofuels industry, and destroy demand for U.S. farm products are appalling. The president has promised family farmers for well over two years now to advance the biofuels industry, and thereby expand markets for American grown farm products. Yet his actions, including these by his EPA, are to blame for significant markets being taken away from American family farmers.”

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