Pruitt 2.0?

  • Wednesday, 25 July 2018 12:59

EPA’s Acting Administrator Andrew Wheeler’s comments in a Reuters report yesterday suggests he plans on following his predecessor’s policies on the RFS.

The Good

Very few things Wheeler said in the report could be construed as positive. Nonetheless, he did say that the agency is looking at ways to make up for the gallons of ethanol lost as a result of the EPA’s small refinery waivers.

The EPA’s own data shows that it granted waivers for a total of 2.25 billion gallons in 2016 and 2017 and Wheeler said the agency is looking at requiring other refiners to blend more gallons of ethanol to compensate for those gallons lost.

Wheeler also said he expects there will be fewer small refinery waivers in the future as the cost of RINs have fallen, thus minimizing “hardship” for small refiners. Is this an indication as to how the EPA will evaluate future waiver applications or just wishful thinking on Wheeler’s part?

The Bad

Wheeler was scant on details as to how the EPA would reallocate those gallons and when it would happen. It should be noted that the EPA under Scott Pruitt was also considering a similar plan before ditching it following pressure from Big Oil’s champion, Sen. Ted Cruz.

Moreover, Wheeler suggested in the report that a plan to reallocate volumes to other refiners would be part of a “package deal.”

And this package deal, while including a RVP-waiver for E15, would also include Big Oil’s wish to include ethanol exports into the RVOs.

As it’s been said on numerous occasions, including ethanol exports into the RVOs goes against the very essence of the RFS which is to increase biofuel consumption DOMESTICALLY.

Besides, using exports to fulfill the RVOs is just a means for the oil industry to avoid blending more ethanol into this nation’s fuel supply and greatly minimizing the impact of an RVP-waiver for E15.

Speaking of exports, it should be noted that the ethanol export market has already been caught in the crossfire of the Trump Administration’s trade war with China.

Ethanol gallons to China totaled zero in April after China imposed a 15 percent tariff on US ethanol (on top of its existing 30 percent tariffs). And as the trade war has intensified, China slapped a further 25 percent on US ethanol this month.

Wheeler’s comments on the RFS to Reuters yesterday were his most extensive since replacing Pruitt at the helm of the EPA. And while he didn’t provide more details on the EPA’s “package deal” for the RFS, one thing was clear : he seems intent on following the Pruitt (read: Big Oil) pathway for the RFS.