June 11, 2019

Duckworth, Durbin & Klobuchar Urge Trump Administration to Stop Undermining Renewable Fuel Standard (RFS) By Abusing ‘Hardship’ Waivers

Trump Administration’s misuse of ‘hardship’ waiver program exempting refineries from the Renewable Fuel Standard (RFS) has hurt farmers & will limit benefits of E15

 

[WASHINGTON, D.C.] — Today, U.S. Senators Tammy Duckworth (D-IL), Dick Durbin (D-IL), and Amy Klobuchar (D-MN), along with 9 of their colleagues, demanded Environmental Protection Agency (EPA) Administrator Andrew Wheeler stop abusing so-called “hardship” waivers that exempt oil refineries from having to use legally required levels of biofuel as required by the Renewable Fuel Standard (RFS). These waivers are intended to help small refineries, but the EPA has undermined the original intent of the RFS by issuing dozens of waivers, including to some large and profitable oil companies like Exxon and Chevron as well as an oil refinery owned by former Trump White House Advisor and billionaire Carl Icahn. In their letter, the Senators also asked the EPA to immediately make information about the recipients of these exemptions and the dozens of companies currently applying for waivers available to the public.

“We are extremely concerned about the EPA’s recent actions to continue to improperly grant small refinery hardship waivers under the Renewable Fuel Standard. EPA’s continued manipulation and misuse of the small refiner waiver authority is undermining the integrity of the RFS and disadvantaging farmers,” the Senators wrote. “Rather than follow through on the promises made to rural America, the EPA and the Administration are providing waivers, in secret, to help some of the largest oil companies and refiners evade their compliance obligations under the Clean Air Act.”

“The small refiner waiver provision was not intended to undermine the RFS to the benefit of the most profitable oil companies in the world. We request that you cease issuing any further small refinery exemptions, immediately reallocate the remaining gallons, and make public the information regarding any recipients of these exemptions,” the Senators continued.

Duckworth and Durbin have been long-time advocates for the Renewable Fuel Standard and for changing policy to allow drivers to fuel up with gasoline that is blended with up to 15 percent ethanol (E15) throughout the year. Ahead of President Trump’s visit to Iowa today to tout the benefits of E15, the Senators have pointed out how his administration’s misuse of the small refinery exemption program has hurt farmers and will limit the benefits of E15 for American farmers.

Duckworth, Durbin and Klobuchar were joined on this letter by Senators Tammy Baldwin (D-WI), Michael Bennet (D-CO), Sherrod Brown (D-OH), Kirsten Gillibrand (D-NY), Mazie Hirono (D-HI), Jeff Merkley (D-OR), Tina Smith (D-MN), Debbie Stabenow (D-MI), and Ron Wyden (D-OR).

Duckworth has previously asked the EPA Office of Inspector General to launch an independent investigation into whether top EPA officials violated the law by inappropriately exempting a number of oil refineries from having to use legally required levels of biofuel, which has driven down prices of Renewable Identification Numbers (RINS) to multi-year lows. Duckworth has also called attention to how Trump friend and former Trump White House advisor Carl Icahn may have violated federal law by trying to use his White House position to influence the application of the Renewable Fuel Standard to benefit a refinery he owns and she has previously asked the FBI and Department of Justice to launch an investigation.

The full text of the letter can be found below:

Dear Administrator Wheeler:

We are extremely concerned about the Environmental Protection Agency’s (EPA) recent actions to continue to improperly grant small refinery hardship waivers under the Renewable Fuel Standard (RFS). EPA’s continued manipulation and misuse of the small refiner waiver authority is undermining the integrity of the RFS and disadvantaging farmers.

Biofuels are a key pathway toward decarbonizing the transportation sector while lowering gas prices, driving economic growth, and creating jobs. Every gallon of biofuels we use displaces a gallon of oil and cuts carbon emissions. The U.S. Department of Agriculture (USDA) found that first generation biofuels cut greenhouse gas emissions by 43 percent, and Argonne National Lab reports that cellulosic biofuels cut GHG emissions between 70 percent and 126 percent.

Competition also helps to reduce prices, and the gasoline market is no exception. As of June 7, 2019, the price of gas with 10 percent ethanol is 20 cents cheaper than gas without ethanol.

Yet, rather than follow congressional intent in the Renewable Fuel Standard (RFS) and follow through on the promises made to rural America, the EPA and the Administration are providing waivers, in secret, to help some of the largest oil companies and refiners evade their compliance obligations under the Clean Air Act.

Ethanol prices have fallen to their lowest levels in over a decade. Renewable Identification Numbers (RIN) prices are down more than 80 percent as compared to last year, providing massive relief to refiners choosing to buy credits to comply with the RFS rather than produce renewable fuels. In fact, one oil refiner re-allocated its savings from lower RIN prices and purchased three ethanol plants, calling into question why refineries really needed these savings if they were not being used to lower expenses or pay employees. 

Since 2017, refinery waivers have increased to the clear benefit of the oil industry. Over the last two years, more than 50 small refinery waivers have been issued, eliminating demand for more than 2.6 billion gallons of biofuels. There are 39 waiver applications currently awaiting action at EPA. If these are granted, it will only exacerbate this problem.

Every waiver granted negatively impacts the rural economy. At a time when farm family incomes are at their lowest levels since 2006, the improper issuance of small refinery waivers is hurting biofuel producers and farmers across the United States. In fact, Secretary of Agriculture Perdue described these waivers as “demand destruction.”

Finally, recent news reports indicate that the EPA’s proposal to make the names of refineries receiving the exemptions public may be in question due to White House interference in the regulatory process on behalf of refiners.

The small refiner waiver provision was not intended to undermine the RFS to the benefit of the most profitable oil companies in the world. We request that you cease issuing any further small refinery exemptions, immediately reallocate the remaining gallons, and make public the information regarding any recipients of these exemptions. Thank you for your attention to this critical issue.

Sincerely,

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