The U.S. Environmental Protection Agency (EPA) granted every small oil refinery that requested it a full hardship waiver for the 2018 compliance year, allowing them to forego having to blend ethanol into their products or purchase credits to avoid doing so, under a waiver program allowed in biofuels regulations, despite the Department of Energy’s (DOE) recommendation some small refineries only receive partial exemptions.
The U.S. corn lobby was not pleased by the Trump administration’s August decision to grant 31 full exemptions to refineries, allowing them to escape from the sometimes costly program forcing them to blend a legally established set amount of ethanol into the fuel products they produce.
According to an August 9 memo, signed by Anne Idsal, EPA’s acting assistant administrator for the Office of Air and Radiation, EPA granted “full exemptions for those 2018 small refinery petitions where DOE recommended 50 percent relief.”
Waivers: No Harm, Some Benefit
The U.S. Renewable Fuel Standard (RFS) was intended to help farmers and cut U.S. dependence on foreign oil. The latter rationale was largely undercut by the fracking revolution, which produced an abundance of domestic oil, lowered prices, and reversed years of growing dependence on imported oil. Critics of the biofuel mandate point out it damages small machinery engines and marine engines, can damage engines in older cars and fuel tanks at older gas stations, and reduces automobile fuel economy.
Congress established a loophole in the RFS allowing EPA to grant waivers to small refining facilities producing 75,000 barrels per day or less if they can prove compliance would cause them economic hardship. Refiners point out requiring them to blend biofuels, such as corn-based ethanol, into their fuel or purchase credits from those that do, creates shortages during required seasonal shifts in fuel blends and costs them a great deal of money in a segment of the industry with among the lowest profit margins.
Under President Trump, EPA has greatly increased the number of waivers, with this is not being first time Trump’s EPA disregarded DOE recommendation concerning which small refineries are granted full waivers.
EPA says there is zero evidence small refinery waivers reduce ethanol demand, and that its expanded use of waivers protects refining jobs.
A spokesperson for the American Fuel and Petrochemical Manufacturers (AFPM) refining group told Reuters exemptions to the RFS are a critical to the continued operation of small refineries across the United States.
“Small refinery exemptions are a critical lifeline for small refineries across the U.S.,” AFPM’s unnamed spokesperson said.
Kenneth Artz ([email protected]) writes from Dallas, Texas.
Artz has more than 20 years’ experience in nonprofit organizations, publishing, newspaper reporting, and public policy advocacy.
