52 Petitions Filed by Refineries Seeking RFS Exemptions

June 19, 2020

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(Renewable Fuels Association/National Biodiesel Board/Farm Progress) Renewable Fuels Association, National Biodiesel Board critical of these petitions, say refiners are trying to circumvent court ruling. -- The U.S. Environmental Protection Agency today disclosed that 52 new petitions have been received from small refineries seeking retroactive exemptions from their Renewable Fuel Standard requirements in 2011-2018.

According to the Renewable Fuels Association, refiners are filing these “gap year” waiver petitions as part of a cynical scheme to circumvent the recent Tenth Circuit Court decision. In its January decision, the court overturned three exemptions and set a precedent for significantly curtailing the waivers going forward.

“Just when we thought we’d seen everything, the refiners have come up with another new scam to undermine the RFS. This ‘gap year’ waiver ploy is as surreal as it is appalling, and certainly the courts would frown upon EPA flouting another unequivocal decision,” said RFA President and CEO Geoff Cooper. “It is beyond absurd that refiners who didn’t even ask for an exemption or claim hardship in the past are now asking for waivers dating all the way back to 2011. EPA should swiftly deny these waiver requests and immediately adopt the Tenth Circuit decision nationwide. The agency should stop trying to rewrite history and start trying to follow the law.”

"EPA's consideration of small refinery exemption petitions going back to 2011 flies in the face of the recent 10th Circuit decision," said Kurt Kovarik, National Biodiesel Board vice president of federal affairs. "By rolling back the clock, there appears to be no length EPA won't go to help refiners undermine the RFS. Make no mistake – this handout to the oil industry comes at the expense of biodiesel producers and soybean farmers across the country, and particularly the Midwest. Allowing these gap filings renders the program completely unpredictable for renewable fuel producers. The agency must immediately reject these petitions to restore confidence that it will abide by the law in administering the RFS."

'Gap year' petitions

In ruling on a petition filed by the Renewable Fuels Association, National Corn Growers Association, National Farmers Union, and American Coalition for Ethanol, a panel of Tenth Circuit Court judges unanimously found on January 24 that EPA had exceeded its authority in granting certain exemptions. The court ruled that EPA may only consider granting waivers to refiners who have received continuous extensions of their exemptions each compliance year. The judges also said EPA may only grant waivers to refiners who demonstrate the RFS itself is the cause of “hardship,” not some other factor, and noted that EPA’s own analysis shows that refiners pass compliance costs on to their customers. EPA’s own data show that no more than seven small refineries could have possibly received continuous extensions of their exemptions. Yet, EPA has recently granted as many as 35 exemptions in a single year.

Now, in a brazen attempt to get around the court decision, refiners are requesting exemptions for past years so that they may claim they are eligible for future waivers because their exemption was “continuously extended” by EPA. RFA first exposed the “gap year” plot in a letter to Administrator Wheeler on May 22, and called on EPA to reject the secretive waiver requests outright. The Tenth Circuit petitioners—RFA, NCGA, NFU and ACE—and other groups sent another letter to EPA later, requesting specific information about the “gap year” petitions.

Refiners are apparently attempting to justify the “gap year” waivers by suggesting the statute allows them to file a petition “at any time.” However, the Tenth Circuit said the phrase “at any time” does not open the door for EPA to grant a petition regardless of when it is received. The court stated that “even if a small refinery can submit a hardship petition at any time, it does not follow that every single petition can be granted.” The court noted the absurdity of a broader interpretation of “at any time,” explaining that “[b]y that logic, the EPA could grant a 2019 petition seeking a small refinery exemption for calendar year 2009 – more than a decade after the fact.”

Approving “gap year” waiver petitions would also contradict EPA’s long-held position that “…petitions be submitted as soon as possible to enable the EPA to conduct its evaluation and issue a decision prior to the…compliance deadline…”

Cooper said granting the “gap year” waivers “would be akin to a principal changing a high school senior’s freshman biology grade from an ‘F’ to an ‘A’ four years later so the student can get into college. It’s cheating—plain and simple. Farmers and biofuel producers in states throughout the Heartland are likely to view the granting of any ‘gap year’ waivers as the last straw in an increasingly tenuous relationship with the administration.”

He also noted a recent comment by Iowa Sen. Chuck Grassley, who said “If the EPA ends up accepting these petitions, not only will they lose again in court, they will risk President Trump’s support in Iowa and other Midwestern states.” READ MORE

TAKING A GAP YEAR: (Politico's Morning Energy)

RFA’S CEO CALLS 52 SMALL REFINERY EXEMPTION PETITIONS “ABSURD” (Brownfield Ag News)

Biodiesel Board Urges EPA to Reject Gap Waivers (Energy.AgWired.com) June 1, 2020 letter

EPA reports new biofuel waiver requests back to 2011 (Argus Media)

U.S. EPA receives 52 new petitions for retroactive biofuel blending waivers (Reuters)

IN NEW FUEL CLASH, OIL REFINERS ASK FOR 52 RETROACTIVE ETHANOL EXEMPTIONS (Successful Farming)

RFA Says EPA Ignoring Court By Considering 52 New Small Refiner Waivers (WNAX)

EPA’s updated list of small refinery exemptions shows that small refiners have filed 52 “gap year” petitions (KFGO)

Farm group calls EPA a 'barrier' for emissions reduction in biofuels (The Hill)

Ethanol industry wants Big Oil to follow rules (Aberdeen News/South Dakota Corn)

Senators Call on EPA to Reject Gap-Year Refinery Waivers ‘Outright’ (Renewable Fuels Association)

U.S. SENATORS URGE EPA TO REJECT “GAP-YEAR” RFS WAIVERS (Brownfield Ag News)

Senators urge EPA to reject 52 ‘gap year’ SRE petitions (Ethanol Producer Magazine)

Senators urge EPA to reject retroactive biofuel blending -- Approval of SREs for past compliance years could worsen unprecedented economic challenges for biofuel industry. (Feedstuffs)

Senators Urge EPA to Reject Retroactive Waivers (Energy.AgWired.com)

Sen. Joni Ernst tells EPA director to 'trash' small refinery waivers (The Gazette)

Governors to EPA: Drop the Gap-Year Waivers (Renewable Fuels Association)

Iowa’s Joni Ernst blocks Trump EPA nominee in scuffle over biofuels mandate (Washington Examiner)

Ernst sinks vote on Trump EPA nominee (The Hill; includes VIDEO)

Bipartisan Senators Urge EPA's Wheeler to Reject 52 Retroactive SREs (OPIS)

Ernst, Grassley join flared-up fight over ethanol (Iowa Capital Dispatch)

AgLines: Fischer, Sasse among senators urging EPA to reject retroactive biofuel blending waiver (Grand Island Independent)

Senators Urge EPA to Reject Biofuel Blending Waivers (KRVN)

National Biodiesel Board Thanks Senators For Urging EPA to Reject Exemption Petitions (Grain Net)

Sens Joni Ernst, Amy Klobuchar, Charles "Chuck" Grassley, Tammy Duckworth Urge EPA to Reject Retroactive Biofuel-Blending Waivers (River Cities' Reader)

Ernst, Klobuchar, Grassley, Duckworth Urge EPA to Reject Retroactive Biofuel Blending Waivers (Office of Senatory Chuck Grassley R-IA)

GOVERNORS’ BIOFUELS COALITION URGES EPA TO DROP “GAP YEAR” RFS WAIVERS (Brownfield Ag News)

Ag Policy Blog: Governors Warn EPA's Wheeler Against Approving Retroactive SREs (DTN Progressive Farmer)

EPA consideration of oil refinery waivers key topic in Ernst-Greenfield race (Radio Iowa)

Ernst, Greenfield spar over which candidate best supports ethanol, agriculture (Iowa Capital Dispatch)

U.S. Senator Grassley backs plan to block EPA nomination over biofuel waivers (Reuters)

Coronavirus levels 'devastating' impact on Iowa ethanol industry (The Gazette)

EPA Holding Up on RFS Volumes: EPA Chief Discusses SREs, Touts USMCA Environmental Provisions (DTN Progressive Farmer)

Wheeler points to ‘a number of issues’ with gap year SREs (Agri-Pulse)

EPA's Wheeler Sees Potential "Issues" With Retroactive SRE Petitions (OPIS)

EPA Administrator Gives Update on Retroactive SREs (Energy.AgWired.com)

32 House members urge Trump to reject gap year SREs (Ethanol Producer Magazine)

House Members Oppose “Gap Year” Waivers (Energy.AgWired.com)

OTHER VOICES: EPA should reject latest 'anti-farm maneuver' by oil companies (Sioux City Journal)

Ernst has a history of backing biofuels (The Gazette)

Approving gap SREs would deal ‘devastating blow’ to soy farmers (Biodiesel Magazine)

RFA Thanks House Members for Opposing Gap-Year Refinery Waivers (Renewable Fuels Association)

Excerpt from Politico's Morning Energy: TAKING A GAP YEAR: Oil refineries have filed 52 new, so-called gap year petitions to EPA seeking economic hardship designations from the Renewable Fuel Standard for years going back to 2011, Pro's Eric Wolff reports. The retroactive petitions mark an effort by companies to make them eligible to receive waivers freeing them from current biofuel blending requirements.

EPA's small refinery exemption dashboard was updated Thursday to show petitions that go back to the beginning of the program in 2011. The agency had issued a blanket waiver for all small refiners in 2011 and 2012, but observers have said the six applications for each of those years may be for refineries that were not eligible at that time.

The dashboard also shows 10 petitions for 2013, 11 for 2014, 10 for 2015 and a handful of additional requests for more recent years. READ MORE

Excerpt from Renewable Fuels Association: Echoing the grave concern expressed by the Renewable Fuels Association and others, a bipartisan group of 16 Senators today called on U.S. Environmental Protection Agency Administrator Andrew Wheeler to outright reject the 52 retroactive “gap-year” RFS waivers newly requested by oil refiners. Leading the effort were Sens. Amy Klobuchar (D-MN), Joni Ernst (R-IA), Tammy Duckworth (D-IL) and Chuck Grassley (R-IA).

...

The Senators also posed specific questions to the EPA, related to granting of waivers to large companies like Chevron and Exxon, the nationwide application of the recent Tenth Circuit decision rejecting waivers that are not extensions of prior ones, and general waiver requests from the Renewable Fuel Standard due to the COVID-19 pandemic. Click here for the Senators’ letter. READ MORE