By Jarrett Renshaw
The Trump administration’s Environmental Protection Agency has consistently ignored recommendations from the Department of Energy to reject or limit waivers to oil refiners seeking exemptions from nation’s biofuels law, according to five sources familiar with the matter.
The U.S. Renewable Fuel Standard requires the firms to cover costs of blending corn-based ethanol into gasoline. But the EPA, after consulting with the energy department, can exempt small refineries in cases where compliance presents a “disproportionate economic hardship.”
The waivers can save refiners tens or even hundreds of millions of dollars a year.
Under EPA chief Scott Pruitt, an appointee of President Donald Trump, the agency has issued more than two dozen such exemptions in recent months – about triple the usual number granted under past administrations.
During that time, EPA has consistently granted full waivers in cases where the energy department recommended only partial exemptions, and, at least once, granted a full approval when the energy department advised an outright rejection, according to two sources familiar with the decisions.
That approach marks a sharp break from Obama administration’s EPA, which had often either adopted energy department recommendations or, when it didn’t, ruled against exempting oil refiners, the sources said.
The shift between the Democratic and Republican administrations shows how political ideologies and constituencies can steer bureaucratic interpretation of a law that never changed – with major impacts on industry.
The waivers save refineries money by freeing them from their obligation to blend ethanol into their gasoline or to purchase compliance credits from those who do. The broad use of waivers lately has angered the powerful corn lobby, which argues they threaten corn demand.
The Renewable Fuels Association, which represents U.S. ethanol makers, last month estimated that the waivers have reduced the amount of ethanol refiners are required to blend by 1.6 billion gallons. The law currently requires refiners to blend 15 billion gallons of the biofuel per year.
The surge in waivers has sent the price of biofuels compliance credits to five-year lows, saving refiners such as Valero Energy Corp and PBF Energy hundreds of millions of dollars.
Until now, it was not known if the EPA gave the waivers on the basis of the energy department recommendations or despite them. The EPA has denied public records requests seeking information on the waivers, which it considers proprietary company information.
Biofuel groups have asked the U.S. Court of Appeals for the 10th Circuit in Washington to review legality of the waivers – arguing the EPA is “methodically destroying the demand for renewable fuels” – and to force the EPA to disclose them.
EPA spokeswoman Molly Block declined to comment on the pending litigation or on whether the agency has approved waivers that the energy department recommended rejecting.
Click here to see more...