With just four days remaining in the Trump administration, the U.S. Environmental Protection Agency today announced four actions related to the Renewable Fuel Standard (RFS) and E15.
First, in next Tuesday’s Federal Register, EPA will announce it is seeking public comments on requests from refiners and oil state governors to provide a general waiver from 2019 and 2020 RFS renewable volume obligations due to COVID-19. In a detailed letter to EPA in April 2020, RFA urged the agency to deny these requests, as they fail to meet the criteria previously set forth for granting a waiver. RFA President and CEO Geoff Cooper offered the following remarks on EPA’s solicitation of comments on the general waiver requests:
“This is nothing more than one last desperate attempt by the refiners to undermine the RFS and protect their chokehold on the nation’s fuel markets. But it cannot succeed because EPA has no authority to waive RFS volumes unless the petitioners show that the RFS itself is the cause of the ‘severe economic harm’ to a state, region, or the nation. Such a showing would be impossible, especially because the renewable fuel blending requirements have already adjusted lower in tandem with COVID-related changes in gasoline and diesel consumption. In reality, the general waiver requests submitted to EPA come nowhere close to satisfying the well-defined statutory criteria and requirements established for requesting a waiver.
“The parties requesting these waivers admit that the problems facing refiners today are driven by COVID-19 and a volatile crude oil market, not the RFS. These same factors are impacting the ethanol industry as well, and to an even greater extent: at the height of the COVID-19 lockdowns, nearly half of the nation’s ethanol production capacity was idled as a result of falling gasoline demand. The ethanol industry has already lost $4 billion in revenue due to the pandemic, and producers continue to struggle from COVID-related market disruptions as 2021 begins. A general waiver at this point would only serve to close more ethanol plants and kill more jobs across rural America.
“The governors and refiners asking for a waiver also apparently have forgotten about the record supply of banked compliance credits (RINs) available to refiners. COVID-19 is exactly the sort of market disruption that EPA had in mind when it developed the RIN credit trading market mechanism.”
Second, EPA has announced in today’s Federal Register a final determination that no additional measures are necessary to mitigate “potential adverse air quality impacts” associated with the Renewable Fuel Standard. RFA’s Cooper responds:
“We agree with EPA that no additional ‘fuel control measures’ are necessary to mitigate ‘adverse air quality impacts’ from the RFS, because there are no ‘adverse’ impacts! The scientific evidence demonstrates that increasing the concentration of ethanol in gasoline improves air quality, meaning EPA should be focused on enforcing the full statutory RFS volumes rather than wasting time on the oil industry’s endless RFS waiver requests.”
Also in today’s Federal Register, EPA has proposed to extend compliance deadlines for 2019 and 2020 renewable volume obligations. RFA’s Cooper responds:
“EPA’s proposal to extend compliance deadlines is based on the premise that the Agency should await direction from the Supreme Court with regard to small refinery exemptions before deciding what to do with the pending 2019 and 2020 annual standards. While we don’t agree that EPA needs to wait as long as it is proposing, particularly for the 2020 compliance year, we do agree with EPA that the outgoing administration should refrain from any further action on the pending small refinery petitions. To that end, we see EPA’s statement in this proposal that it is not taking a position on 2019 SREs as a good sign, and we’re hopeful it means EPA will not attempt to unlawfully grant midnight-hour SREs in the last five days of the Trump administration.”
Finally, next Tuesday’s Federal Register will also include a proposal from EPA for removing certain barriers to expanded sales of E15, a gasoline blend containing 15% ethanol. RFA’s Cooper responds:
“RFA is pleased to see that EPA is finally issuing its long-awaited proposal to remove unnecessary barriers to E15 expansion in the marketplace. We have long supported reforms and changes to the E15 pump label, which has deterred American drivers from using the lower-carbon, lower-cost, more-efficient E15 blend. We also agree that EPA’s current regulations regarding the compatibility of underground storage tanks should be revisited and we are pleased to see that issue being addressed in this proposal. We continue to analyze the E15 proposal and are working with the retail sector to understand how these proposed changes may affect the marketplace.”
RFA will be providing comments on all of these matters and testifying at the public hearings scheduled on several of these proposed actions.