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Congressional Biofuels Caucus Urges EPA to Address Gallons Lost from SREs

  • Monday, 23 September 2019 14:07

Last Friday, members of the Congressional Biofuels Caucus – which includes Minnesota Reps. Collin Peterson, Angie Craig and Jim Hagedorn – sent a letter to the EPA urging Administrator Andrew Wheeler to address the damage caused by the agency’s issuance of small refinery exemptions (SREs).

In the letter, the Congressional Biofuels Caucus asked the EPA to reallocate the gallons of ethanol waived by the SREs when setting the Renewable Volume Obligations (RVOs).  

Read the full letter here:

Dear Administrator Wheeler:

We write you regarding the Environmental Protection Agency' s (EPA) proposed rule dated July 5, 2019 which proposed Renewable Volume Obligations (RVOs) for 2020 and 2021 as required by the Renewable Fuel Standard (RFS). We are concerned over EPA's continued abuse of small refinery exemption authority, the uncertainty involved in a possible reset of statutory volumes, and the negative economic implications these realities are having on our rural communities.

EPA's recently announced decision to grant 31 small refinery exemptions (SREs) continues to cast serious doubt on the agency's ability to administer the RFS consistent with Congressional intent. Since early 2018, EPA granted 85 blending exemptions to refineries which equals more than 4 billion ethanol-equivalent gallons of renewable fuel being taken out of the marketplace. These conditions have caused three ethanol facilities to close pe1manently and another fourteen to idle, affecting nearly 3,000 jobs and hundreds of millions of corn bushels on an annual basis.

For the biodiesel industry, the damage from SREs is also severe. Approved exemptions over the last three years have caused demand destruction and nearly $7.7 billion in economic losses to the biodiesel and renewable diesel industry. To date, at least eight biodiesel facilities have shut down this year, which represents 6,800 jobs and 215 million gallons of annual production.

Furthermore, these exemptions greatly outweigh the proposed rule's slight 0.12-billion-gallon increase in advanced biofuel and steady hold of 15-billion gallons for conventional ethanol, meaning the effective RFS blending obligation will actually decrease. We are also troubled that the proposed rule did not address the D.C. Circuit Court order to restore 500 million gallons of blending obligations which were deemed inappropriately waived in 2016. These facts diverge from Congressional intent of the RFS to build a robust domestic biofuels industry that supports rural America.

There is also unease among our constituents about how the EPA will handle the RFS reset rule, which is currently under review by the Office of Management and Budget. As EPA considers several environmental factors, the agency needs to incorporate U.S. Department of Agriculture's updated 2018 lifecycle analysis which shows corn-based ethanol results in 43% lower greenhouse gas emissions than gasoline when produced at a natural gas-powered ethanol plant.

Again, we ask that EPA account for small refinery exemptions by reallocating waived gallons when promulgating RVO obligations as required by 42 U.S.C. 7545(o)(3)(C)(ii). We urge the agency to stop the practice of rubber-stamping small refinery exemptions which are hurting farmers during one of the worst rural economic times in recent history. We also request that EPA update its analysis on the benefits of renewable fuels on greenhouse gas emissions, corn and soybean farmers, and consumer demand for biofuels before reaching conclusions on the RFS reset rule.

Our farmers and rural communities are hurting and need the EPA to stop undermining the RFS. Thank you for considering our requests and we look forward to hearing back from you.