Questions over waiver authority

Jul 5, 2019  | 2 min  | Ep4446

On Friday, the EPA proposed an increase in the amount of biofuels that must be blended by refiners in 2020. The new rule increases the mandate to just over 20 billion gallons but holds conventional ethanol use at 15 billion gallons.

The news brought the ire of farm trade groups looking for an increase in the predominately corn-based fuel. The news piled on top of complaints about blending waivers granted to refiners.

Peter Tubbs has more. Producer contact

A turf war has broken out in Congress over who has input over issuing Small Refiners Exemptions, or SREs, that are issued by the Environmental Protection Agency.

A dozen Senators from oil producing states sent a letter to the White House arguing that Secretary of Agriculture Sonny Perdue’s involvement in the SRE issue is potentially illegal.

Letter quote: “The Clean Air Act authorizes only “the Administrator [of the Environmental Protection Agency], in consultation with the Secretary of Energy,” to act on petitions from small refineries.”

The White House appeared ready to dial back the exemptions after an appearance by President Trump at a June 11th ethanol plant event in Iowa. Major oil refirners like Chevron and Exxon-Mobil have received flack for gaining SRE’s to cover their smallest refineries.

The ethanol industry has been pressing both Secretary Perdue and President Trump to stop issuing exemptions, as it reduces the demand for ethanol. Oil interests want an increase in the exemptions, claiming that requiring the blending of ethanol into gasoline puts small refineries at economic risk when margins are tight.

According to Emily Skor, CEO of the ethanol trade association Growth Energy, the issuing of small refinery exemptions has reduced ethanol consumption by 2.6 billion gallons.

Speculation the Trump Administration will reduce the number of SRE waivers has driven the price of Renewable Identification Numbers, or RINs higher. One RIN is generated for each gallon of biofuels that is created. RINs can be purchased by crude oil refiners to allow them the ability to eliminate their obligation to mix ethanol into their ouput of the nation’s gasoline supply. 

For Market to Market, I’m Peter Tubbs.

Grinnell Mutual Insurance