Midterm Elections, RVO Decisions, and Lame Duck Tax Relief

by Michael McAdams (Advanced Biofuels Association) ... When testifying recently before the Senate Environment and Public Works Committee, the acting administrator was judicious in answering questions about EPA’s small refinery exemptions (SREs). He has publicly stated that there should be more transparency in the process for granting SREs, and that it would be difficult to find the “disproportionate economic hardship” described in the statute, given currently low RIN prices. These are both positive signs for our industry. Positive signs long overdue, given the storms we have weathered over the past several months—calls to permit RINs for exported biofuels, handing a free pass on compliance for PES, and EPA granting 48 SREs from compliance with the RFS.

On the plus side, House Energy and Commerce Environment Subcommittee Chairman John Shimkus, R-Ill., continues to hold substantial congressional hearings on the state of the RFS program. These hearings have investigated potential changes that could address the disagreements between corn ethanol and the oil industry. On the Senate side, Majority Whip John Cornyn, R-Texas, continues to thoughtfully engage with stakeholders, and encourage the development of solutions that will help move the RFS program forward for everyone. These are not easy tasks, but I truly appreciate the leadership both men are providing in their endeavors.

As for the mess Pruitt left behind at EPA, the agency is now facing at least three lawsuits challenging its determinations in granting the 48 SREs for compliance years 2016 and 2017. These suits challenge the manner in which the SREs were granted, the criteria used to grant them, EPA’s failure to provide information on the determinations in response to numerous Freedom of Information Act requests, and specific determinations.

On the tax front, I expect the earliest we will see meaningful tax extenders conversations materialize will be during the lame duck session after the midterm elections. A change in majority control of at least one of the chambers could further complicate the conversation on tax, teeing up a January timeline for clarity on extenders much like we saw in 2017. Recently, trade associations including ABFA and the National Biodiesel Board joined coalitions from the trucking and fuel marketing sectors in calling for a straight extension of the biodiesel blenders’ credit. This unified effort makes it far more likely that we can negotiate a good path forward for the biodiesel and renewable diesel industries—hopefully, a longer-term agreement negotiated as quickly as possible. We are all working toward this goal.

As always, we have much to do this fall. Stay engaged, and be sure to vote this November to remind our public servants about the importance of the RFS and its broad impact on America. READ MORE

Excerpt from Politico's Morning Energy: While legislative action has largely fizzled this year around reforming the Renewable Fuel Standard, oil refiners' allies on Capitol Hill say they are not giving up the fight. "We're still talking," Sen. John Cornyn (R-Texas) told reporters Wednesday. "We think we need a permanent solution and I also think there's a high likelihood there will be litigation, so we think a legislative solution would be more appropriate." A spokesman for Rep. John Shimkus, who has been leading the House effort on reform, said Shimkus hopes to get a draft bill out later this year. READ MORE