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Midwest Senators Push To Reform Biofuel Waivers Program

Ethanol plant

A Republican and a Democrat Senators from farm states have introduced a bill to tweak the biofuel waivers program and increase its transparency in a bid to help ethanol demand and producers who, they say, are currently disadvantaged at the expense of oil refiners who are being granted waivers from blending biofuels in gasoline.   

Under the federal Renewable Fuel Standard (RFS), oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel. Refiners that don’t have the infrastructure to blend biofuels must purchase tradeable blending credits known as Renewable Identification Numbers, or RINs. The Environmental Protection Agency (EPA) has the authority to grant waivers from the RFS to refineries whose oil processing capacity is below 75,000 bpd and who can prove that blending biofuels would hurt them financially to an unsustainable level.

This policy has long pitted the agriculture lobby against the oil refining lobby.

In a recent blow to the ethanol industry in the farming vs. oil refining battle, a federal appeals court has denied a renewable fuel group’s attempt to block the EPA from issuing small refinery exemptions (SREs) to the Renewable Fuel Standard.

Now U.S. Senator Tammy Duckworth (D) of Illinois and Deb Fischer (R) of Nebraska said on Friday that they had introduced a bill that would require oil refiners to apply for waivers by June 1 in order to have their application processed in time and in a transparent manner for the next year. The bill also requires the EPA to report to lawmakers how it decides which refiner gets the so-called ‘hardship’ waiver from blending biofuels into gasoline.

Related: Goldman: No One Knows What’s Going On In Oil Markets

“Farmers across Illinois and throughout the Midwest are hurting and ethanol plants are idling while this administration is abusing the small refinery exemption program to undermine the bipartisan Renewable Fuel Standard,” Reuters quoted Senator Duckworth as saying in a statement.

Earlier this week, Duckworth and other Senators urged the Trump Administration and EPA Administrator Andrew Wheeler in a letter to “stop abusing so-called ‘hardship’ waivers.”

“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 wrote in the letter.  

By Tsvetana Paraskova for Oilprice.com

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