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U.S. EPA Revives Provision That May Name Refiners Applying for Biofuel Waivers

  • Monday, 15 April 2019 10:28


April 12, 2019

By Humeyra Pamuk

The U.S. Environmental Protection Agency on Friday took the first step to revive part of a rule that could, if finalized, reveal the names of oil refineries which applied for exemptions from the nation’s biofuel laws.

The move is seen as a win for the corn industry, which has criticized the waiver program due to its lack of transparency. The EPA only in 2017 first began releasing the number of waiver petitions it has received and granted but the names have been kept confidential so far.

Under the federal Renewable Fuel Standard (RFS) program, refiners are required to blend biofuels into the nation’s gasoline pool, but small operations can apply for exemptions. The Trump administration made extensive use of such waivers in the last two years, saving refiners money but angering the corn lobby, particularly after major companies like Exxon Mobil Corp received exemptions for certain facilities.

The issue is a battlefield between the rival oil and corn industries. The ethanol industry claims the exemptions have been overused, threatening demand for corn-based ethanol at a time when farmers are already struggling.

The oil companies have long complained that speculation in the biofuels credit market has inflated prices and complying with cost them hundreds of millions of dollars - one of a long list of complaints by the industry about U.S. biofuel policy.

On Friday, the EPA signed a Federal Register notice saying it is reopening the comment period for a provision in a rule related to the small refinery exemption program that was first introduced in 2016.

That provision from 2016 proposed to establish a determination that basic information related to EPA actions on petitions for RFS small refinery and small refiner exemptions may not be claimed as confidential business information, according to a document on the provision on EPA’s website.

“With respect to each decision on a small refinery/refiner exemption request, we would release to the public the petitioner’s name, the name and location of the facility for which relief was requested, the general nature of the relief requested, the time period for which relief was requested, and the extent to which EPA granted or denied the requested relief,” the document said.

While ethanol groups mostly hailed the move, oil industry representatives were largely critical. Fuelling American Jobs Coalition said the proposal, if finalized, would do more harm than good.

“The data underlying Small Refinery Exemption requests reflects the underlying financial health of facilities in the highly competitive refining sector. Such information can affect access to capital for marginal refineries and can make them attractive targets of acquisition, literally moving markets,” it said in a statement.

To obtain a waiver, refineries with a capacity of less than 75,000 barrels per day (bpd) have to prove that compliance with RFS would cause them significant financial strain. They submit information about the company’s financial health while doing that, although the EPA’s provision does not include revealing that.

EPA Administrator Andrew Wheeler, in an interview with Reuters on Thursday, hinted there could be fewer exemptions under his leadership due to the lower price of biofuel credits that have reduced economic hardship, which is one of the conditions for the exemption.

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