The EPA Gets an Earful from the Renewable Fuels Industry

Nov 1, 2019  | 2 min  | Ep4511

The White House says they are searching for a new place to sign Phase 1 of the U.S.-China trade deal. Their first choice, the Asia-Pacific Economic Summit in Chile’, was cancelled due to political unrest in Santiago.

Many U.S. farmers agree it was time to hold China accountable over trade but their domestic focus has turned to the loss of ethanol market share.

John Torpy has the story. ---

   The Environmental Protection Agency got an earful this week from both the renewable fuels industry and petroleum refiners. At a public hearing in Michigan, ethanol advocates, oil industry representatives, farmers and politicians voiced their opposing opinions on a recently proposed EPA rule concerning Small Refinery Exemptions or SREs. 
Patrick Kelly, American Petroleum Institute: “The final standards must recognize it as simply not possible to go back in time and induce demand for a prior year. Increasing the implied ethanol mandate above 10% of the gasoline pool does not equate to more ethanol consumption."
 
 
Monty Shaw, Iowa Renewable Fuels Association: ”And that's not how the law is supposed to work. Those gallons are supposed to be redistributed to the remaining refiners that don't get exemptions. So in other words, 15 billion gallons is supposed to be 15 billion gallons. Even when you account for exemptions."
 
     The bulk of the complaints focused the impact SRE’s have had on the ethanol industry. Exemptions are given to small oil refiners who declare a monetary hardship if they have to blend a certain number of federally mandated gallons of biofuels into their gasoline. 
 
Pat Kelly, American Petroleum Institute: “The final standards must recognize it as simply not possible to go back in time and induce demand for a prior year. Increasing the implied ethanol mandate above 10% of the gasoline pool does not equate to more ethanol consumption."
 
     In early October, after enduring numerous complaints from ethanol industry and farm state political leaders, a deal was struck with President Trump to restore the gallons lost over the past two years to SREs.  However, the rule presented by EPA in late October leaves nearly a third of the unblended 1.6 billion gallons on the table. 
Emily Skor, CEO Growth Energy: For the past three years, EPA has granted 78% more exemptions than the department of energy has recommended. So that gives us very little confidence that EPA is going to follow through on this commitment."
 
 
     Officials in corn producing states argue refiners have had ample time to adapt to working with ethanol.
 
Sec. Mike Naig, Iowa Secretary of Agriculture:"Well, look, first of all, the renewable fuels standards been around for a few years. And so this is not something new for any of us to be, to be dealing with, including the petroleum industry and the refiners, right? So I would argue that by now some 15 years into this, uh, that, that the industries need to have figured out how to incorporate ethanol and biodiesel into our transportation fuel system."
 
     Since President Trump took office, 85 hardship waivers have been granted to oil refiners. During the Obama Administration, only 23 SREs were granted between 2013 and 2015.
For Market to Market, I’m John Torpy.
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