API Urges EPA Not to Exempt Small Refiners from US Biofuel Mandate

by Meghan Gordon (Platts) The American Petroleum Institute has come out against a campaign by small refineries to avoid their obligations under the US biofuel mandate, according to a letter released Tuesday.

More than two dozen refineries with throughput of less than 75,000 b/d have reportedly petitioned the Environmental Protection Agency to get out of the Renewable Fuel Standard's blending requirements based on a provision in the law allowing the agency to make exemptions based on "severe economic harm."

Frank Macchiarola, API's downstream group director, said in the letter to the EPA that the oil industry lobby also disagrees with arguments by the governors of Delaware, Pennsylvania, New Mexico and Texas, who said that refiners in their states are facing severe economic harm from the RFS. The governors pressed EPA for a nationwide waiver to the biofuel mandate.

"Any RFS volume reductions contemplated by the agency must maintain a level playing field in the marketplace, and must apply equally across the whole refining sector," Macchiarola said in the letter to Assistant EPA Administrator William Wehrum.

"The ongoing issues with the RFS program are structural in nature, apply to all regulated parties, and need to be addressed on a nationwide basis. API recommends that EPA should deny the state waivers and should not approve any small refinery exemptions." READ MORE

Excerpts from Environmental and Energy Study Institute: To quote Yogi Bera, it’s like déjà vu all over again. As longtime readers of SBFF will remember, PES’s troubled financial situation and Philadelphia area lawmakers looking for an easy scapegoat for the refiner’s woes is what sent the RFS, and consequently, the biofuels industry, into a tailspin in 2014.

But the refiner’s troubles go back to 2011, when the Carlyle Group bought two struggling Philadelphia refineries from Sunoco that produce 330,000 barrels of oil per day. Around the same time, Delta Air Lines purchased a struggling 185,000 barrel per day plant in suburban Philadelphia. Later, these refineries became PES.

Executives from both companies and Philadelphia area Representatives Robert Brady (D-PA) and Patrick Meehan (R-PA) worked with the White House to save the refineries and the hundreds of jobs they support. The White House helped accelerate environmental reviews for the refineries, secure $25 million in taxpayer-funded subsidies, and the EPA waived a prior Clean Air Act violation for the new owners. The deal secured 1,200 jobs in the Philadelphia area and headed off gas price spikes -- just before President Obama won Pennsylvania in his 2012 re-election campaign.

Fast-forward to late-January, when PES files for bankruptcy and blames the RFS for its financial situation. Over the past year, tensions between the two industries that President Trump has publicly supported have led to a number of public spats between biofuels supporters and oil backers. READ MORE