The Trump administration is out with a plan to address concerns over the use of biofuel mandate waivers, ending one chapter of the saga but setting the stage for new battles in the ever-turbulent debate.
The plan, announced Friday morning, would launch a rulemaking effort to allow the Environmental Protection Agency to reallocate gallons of biofuel production waived through Small Refinery Exemptions to the Renewable Fuel Standard. But absent from the announcement were rumored additional volumes for the biofuels industry or language to refund or rebate refiners if the price for biofuel mandate credits exceeds a certain threshold.
EPA Administrator Andrew Wheeler hailed the news as “the latest in a series of steps we have taken to expand domestic energy production and improve the RFS program that will result in sustained biofuel production to help American farmers." Ag Secretary Sonny Perdue said the deal “promotes economic growth and supports our producers.” But the forthcoming details will likely shape how the biofuel and oil sectors ultimately view the deal.
An EPA official told reporters Friday that the action is “we expect this action to be signed in the next week or so, which will facilitate issuing the final volumes for 2020 later this year.”
The official said the administration plans to seek public comment on “how to and at what levels to address small refinery relief in the 2020 compliance year.
“These ranges are informed by the last three compliance years at the statutory direction provided to EPA by Congress,” the official added.
Sources tell Agri-Pulse the plan as relayed on a White House stakeholder call Thursday night includes reallocating volumes on a three-year rolling average of waived volumes. The EPA official also clarified the proposed rulemaking will account for future exemptions, not the exemptions already granted by the Obama and Trump administrations.
The plan also allows the administration to continue issuing the waivers to eligible refineries.
Nevertheless, the administration says the action will allow the 15-billion-gallon conventional biofuel mandate set by Congress through the RFS to be met.
A release on the subject discusses additional efforts the administration plans to take, including “a rulemaking process to streamline labeling” of E15, continuing to “evaluate options for IRN market transparency and reform,” continuing to “work to address ethanol and biodiesel trade issues,” and USDA seeking “opportunities through the budget process to consider infrastructure projects to facilitate higher biofuel blends.” No additional details were provided as to how the administration plans to achieve those goals.
Biofuel champions on Capitol Hill were quick to cheer the news.
Sen. Joni Ernst, R-Iowa, said the steps outlined in the announcement “will help increase demand for our biofuels, provide certainty for farmers and producers for years to come, and ensure that EPA is implementing the RFS as it was written.”
To that point, fellow biofuel stalwart and Iowa Republican Chuck Grassley said he would “hold EPA’s feet to the fire so that they do as President Trump committed.”
“The one thing the (biofuels industry) wanted is to make sure 15 billion gallons was 15 billion gallons regardless of the number of waivers,” Grassley told reporters. “The industry got together, and the president has agreed to what the industry wanted.”
The issue also proved to be a politically dicey one for a president hoping to keep the support of rural voters in his upcoming reelection bid. National Corn Growers Association President Kevin Ross brought up the subject during a celebratory event to announce year-round E15 sales earlier this year. In a statement released after the news, Ross said producers were feeling a pinch from previously allocated SREs.
“Corn farmers weren’t shy in telling the president that the impact of these waivers would lead to significant consequences for farmers, folks working at ethanol and biodiesel plants, and the countless other rural jobs that depend on this market,” he said in a statement. “The president is finally telling the EPA that enough is enough, they must follow the law, and we appreciate that.”
But some were more measured in their comments. American Coalition for Ethanol CEO Brian Jennings said because the plan “is short on details and the final outcome is dependent upon a new rulemaking process, it’s unrealistic and premature for me to conclusively praise it at this stage.”
Oil-state senators were critical of the plan. Texas Republican Ted Cruz said the move would endanger the jobs of refinery employees.
“Despite clear commitments made by administration officials to pursue policies to contain costs, today’s announcement will hurt blue-collar refinery workers whose jobs are threatened by high RINs prices,” he said.
Wyoming Republican John Barrasso said the plan “will do more harm than good.”
“No one should be surprised if it leads to closed refineries, lost jobs, and higher fuel prices. Refineries — both large and small — employ millions of Americans nationwide,” said Barrasso, who chairs the Environment and Public Works Committee, which has over the EPA.
Since taking office, the Trump administration has granted 85 SREs, a move that exempted more than 4.2 billion RINs.
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