Time for EPA to Clean up the Mess It Made of the RFS

August 01, 2018

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by Timothy J. Rudnicki (Minnesota Bio-Fuels Association) ... Let’s be clear here. There are legitimate complaints from the biofuel industry because (acting Environmental Protection Agency Administrator Andrew) Wheeler’s predecessor turned over the agency to Big Oil. How else can you explain the 2.25 billion gallons of ethanol that were lost via the EPA’s RVO waivers to refineries in the last two years?

But more importantly, it’s not Wheeler’s job to set policies and promulgate laws. That responsibility lies with Congress. So with respect to the RFS, his sole job is to implement the law.

Simply put, that means increasing the RVOs to push biofuel producers to make more biofuels, including from greater amounts of cellulosic biomass, and for petroleum refiners and the entire fueling infrastructure to blend increasingly greater amounts of biofuels. That’s his job.

Perhaps he’s doing just what his boss wants: advance the use of more fossil fuels. While the President gives mixed signals as to whether he actually supports the use of ethanol, the White House Energy Plan is crystal clear - promote fossil fuels with no mention of renewable energy or biofuels.

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Wheeler might, however, be challenged to get more biofuels into the marketplace. One of the simplest first steps to rectify that problem is to give E15 RVP parity with E10. While I recognize some thought leaders have already weighed in on this matter, here are a few general ideas about how the RFS actually supports the EPA in granting an RVP waiver to E15.

Starting with 42 USC § 7545, Regulation of Fuels, there is a pathway for the E15 RVP waiver. Subsection (h)(4) specifically addresses the RVP waiver for E10 and has three subparts the EPA uses to determine whether “a distributor, blender, marketer, reseller, carrier, retailer, or wholesale purchaser-consumer shall be deemed to be in full compliance.” One of those parts, (B), goes to the blend of ethanol not exceeding its waiver condition.

What is that singular waiver condition? In 2012, the EPA granted a partial waiver for E15 whereby it was approved for use in all cars 2001 and newer. Keep in mind, approval for E15 was issued seven years after the RFS became law.

Another pathway to obtain RVP parity for E15 is through a Congressional act - an amendment to only the Clean Air Act provision dealing with RVP. Although one party in Washington controls all three branches of government, the Consumer and Retailer Choice Act (Senate 517 and House Resolution 1311) appears to be stalled.

Lastly, the EPA could initiate a rulemaking process. An agency has at least nine factors it may consider to do so and here are a few factors:

New technologies or new data on existing issues: E15 is new relative to E10 when the RFS was signed into law.
Petitions from interest groups, corporations, and members of the public: Ethanol trade associations fall into this category. The rulemaking, however, should be narrowly tailored to specifically address RVP parity for E15. This could be the opportunity to also “fix” section (h)(4) so as to include anticipated higher blends going forward.
Presidential directives: The President could direct the EPA to begin rulemaking. While efforts may have been made in this direction, perhaps this avenue should be reviewed and pushed more aggressively.

By failing to comply with and enforce the law, the EPA has weakened the RFS and created unnecessary confusion and uncertainty for the biofuels and agriculture industries. The agency must take immediate steps to get the RFS back on track. That means holding Big Oil accountable for compliance as well as fixing the RVP problem so greater volumes of ethanol can be used by consumers throughout the year. READ MORE

PRUITT 2.0? (Minnesota Bio-Fuels Association)

Andrew Wheeler must reverse damage to American heartland (The Hill)

LAWMAKERS ASK WHEELER TO ADDRESS REFINERY WAIVERS, RVP-RELIEF FOR E15 (Minnesota Bio-Fuels Association)

GRASSLEY BLASTS EPA'S 'NON-ANSWER' OVER WAIVERS (E&E News/Minnesota Bio-Fuels Association)

SOME QUESTIONS FOR THE NEW EPA ADMINISTRATOR (Minnesota Bio-Fuels Association)

New EPA chief faces first test on Capitol Hill (The Hill)

SD Senator Mike Rounds Questions EPA Chief on Ethanol Rules (WNAX; includes AUDIO)

EPA Must Live up to its Promise to Provide Certainty to Farmers (Capital Journal)

Wheeler: EPA to create public ‘dashboard’ on RFS waivers (Ethanol Producer Magazine)

Congressman Blum says he told President Trump farmers need a win on trade (Radio Iowa)

New US EPA chief defends small refinery waivers to biofuel mandate (Platts)

Wheeler Promises Waiver 'Transparency'-- Despite Trump's Desire to Approve E15, EPA's Head Remains Uncommitted (DTN The Progressive Farmer)

New EPA head says he aims to implement Trump's agenda "posthaste" (Houston Chronicle)

Acting EPA Chief on RFS Concerns (Energy.AgWired.com; includes AUDIO)

Unwinding the Perverse Arithmetic of Scott Pruitt’s Small Refinery Exemptions to the RFS (Union of Concerned Scientists)

Excerpt from Energy.AgWired.com: Senators Joni Ernst (R-IA), Mike Rounds (R-SD), Deb Fischer (R-NE), and Tammy Duckworth (D-IL) all spent questioning time on Renewable Fuel Standard issues, but many answers from Wheeler were vague and noncommittal. Wheeler clearly believes the waivers should be granted under the law, but he expressed no clear direction on how, or even whether, the waived gallons should be reallocated.

Wheeler said several times that EPA intends to publicize a “dashboard” to provide more transparency about the circumstances around why refineries receive exemptions from RFS compliance. “We’re developing a dashboard so the whole public can see what we’re doing and when and how we are granting the waivers,” said Wheeler.

The acting administrator served on the Senate EPW committee from 2003-2009 and actually helped to write parts of the RFS dealing with the refinery exemptions and he told Sen. Rounds, “I wish we had spent a little more time on some of the details of it now that I’m helping to implement it.”

Sen. Ernst pointed out that if the traditional ethanol statutory requirement is 15 billion gallons, and EPA has effectively waived 10 percent of that, the agency is not implementing the RFS in a manner consistent with the original intent of Congress. “Part of the original intent of Congress was also to grant the waivers and there was not a provision to reallocating that,” said Wheeler. “I agree we have to figure out a reallocation strategy, but we are confined by the law.”

“And the law does require 15 billion gallons,” Sen. Ernst responded.

Ernst also pressed Wheeler on allowing E15 to be sold all year. “We can certainly start that process,” said Wheeler. “There are certainly people that don’t believe we have that authority.”

Wrapping up his questioning, Sen. Rounds told Wheeler, “You’ve taken care of the small refineries, but you haven’t taken care of the small farmers.”

Listen to the senators’ questions and Wheeler’s answers below: READ MORE/LISTEN

A full recording of the hearing can be viewed on the Senate Committee on Environment and Public Works website. https://www.epw.senate.gov/public/index.cfm/hearings?ID=E88AA992-3DF3-40E2-AE8F-351B3D885B06