Senator Says Trump Administration Plan to Abandon Promised Transparency Rewards Oil Companies at Expense of Nation’s Renewable Fuel Producers

Senator Tina Smith

May 2, 2019

Press Release

U.S. Senator Tina Smith (D-Minn.) said today the Trump Administration’s plan to go back on its promise to name which U.S. oil refineries are allowed to avoid requirements to blend renewable fuels into the nation’s fuel supply could ultimately contribute to job losses across rural America and strike another blow to the nation’s struggling farm economy.

Sen. Smith, who has been an outspoken advocate to expand the use of renewable fuels, said hiding the identity of refineries that receive special Environmental Protection Agency (EPA) waivers to the nation’s biofuels laws will help big oil companies at the expense of the nation’s renewable industry.

The waivers cut the amount of corn-based ethanol and other renewables that is blended into the nation’s gasoline and diesel supply, reducing demand for agriculture products at a time when farmers have already been hit hard by low farm prices and trade disruptions.

“The EPA promised to increase transparency and publish the names of refineries that get exemptions from our nation’s renewable fuels laws. Now it’s abandoning that promise,” said Sen. Smith.

“The transparency is necessary because last year EPA granted a ‘financial hardship’ waiver to an oil refinery owned by billionaire Carl Icahn, saving him tens of millions of dollars. Such waivers have also gone to refineries owned by profitable oil companies like Exxon-Mobil and Chevron. In 2018, the waivers cut demand for ethanol by more than a billion gallons, according to the Minnesota Biofuels Association. That’s just wrong and it’s hurting Minnesota’s economy.” Sen. Smith said the EPA’s plan to be more transparent was eliminated after the White House and the oil industry pushed to end it.

She said she also remains skeptical of a reported White House-brokered “compromise plan” between the oil industry and corn industry. “I’ll be watching to ensure that any compromise coming out of the Administration does not further hurt Minnesota’s ethanol and renewable fuels industry,” she said.

Read the original article: U.S. Sen. Tina Smith Says EPA Plan to Hide Which Refineries Are Allowed to Stop Blending Renewable Fuels Would Hurt Farmers, Rural Communities

Ethanol Producer Magazine

April 23, 2019

By Lisa Gibson

The 2019 Ethanol Producer Award winners have been selected. Following a nomination period and voting process that included Ethanol Producer Magazine editorial staff and editorial board members, EPM is proud to announce this year’s winners. They are as follows:

Project of the Year: Flint Hills Resources Fairmont in Fairmont, Nebraska. Flint Hills installed Fluid Quip Process Technologies’ Maximized Stillage Coproduct system.

Collaboration of the Year: Homeland Energy Solutions in Lawler, Iowa, and Lallemand Biofuels & Distilled Spirits. The companies implemented a fermentation project together.

Board of the Year: Heartland Corn Products, Winthrop, Minnesota

Workplace of the Year: Arkalon Ethanol, Liberal, Kansas.

Good Neighbor Award: Marquis Energy-Wisconsin, Necedah, Wisconsin.

Read the original article: 2019 Ethanol Producer Award Winners Announced

Ames Tribune

April 12, 2019

By Robbie Sequeira

In order to battle the tough Friday afternoon winds, presidential candidate and Minnesota senator Amy Klobuchar donned a lime-green hard hat and thick pea coat as she toured the Lincolnway Energy Plant in Nevada.

But for the presidential hopeful, battling the wind isn’t the issue, it’s battling major oil companies and Environmental Protection Agency (EPA) small-refinery waivers on behalf of ethanol companies.

The waivers grant a small refinery temporary exemption from its annual Renewable Volume Obligations, which determine how many gallons of biofuel refineries will add to the motor fuel mix.

Following her tour of the ethanol plant, Klobuchar held a roundtable discussion with local ethanol plant producers and ethanol experts to hear the concerns and challenges the ethanol industry is facing.

Ethanol producers stated that small-refinery waivers issued by the EPA are “taking three billion gallons of demand or 20 percent of demand from the ethanol industry.”

“I think part of (this discussion) is taking on the oil companies and blatantly talking about it,” Klobuchar said. “Yeah, they have their market, but (ethanol) has their market, too, and they are trying to stomp on us and we need to speak out or we don’t have a chance.”

In terms of policy, Klobuchar said, “replacing the gallons lost” in the industry is important, as well as promoting cellulosic ethanol, ethanol produced from the fiber of a plant as a means to help recoup losses suffered in the past years.

Klobuchar also vouched for protecting and addressing how the waivers affect the Renewable Identification Numbers (RIN) market and the year-round sale of gasoline with up to 15 percent ethanol, also known as E15.

RIN is a serial number assigned to a batch of biofuel that act as credits of compliance or a type of currency of the Renewable Fuel Standard Program.

One of the concerns expressed Friday was that that small refinery exemptions issued by former EPA Administrator Scott Pruitt eroded demand for ethanol in 2018 and created the RIN market for ethanol.

?(One of the things we can do) is the RIN market, and making sure it’s functioning and addressing whatever the problems are,” Klobuchar said. “We know that people are going to mess around with it, and those waivers mess around with it, too.”

In 2018, President Trump directed the Environmental Protection Agency (EPA) to consider reforming the RIN market, and to allow the year-round sale of E15.

However, many at the roundtable said that the EPA small refinery waivers and exemptions have been overused, threatening demand for corn-based ethanol at a time when farmers are already struggling.

“We don’t make a fraction of a cent on RINs,” said Blair Picard, Commercial Manager of Lincolnway Energy. “Our RINs go out the door free with our ethanol,so you could say on one hand, we’re not as concerned with the price of RINs as we are with the price of ethanol and our margin, which both have deteriorated as a direct example of these small refinery exemptions.”

Klobuchar blended the concerns of ethanol producers with the “immediate need” to address climate change and environmental issues.

The senator said she would address climate change on day one by entering the United States back into the international climate change agreement, bringing back the clean power standards adopted under the Obama Administration, and re-implementing gas mileage standards.

“I’m a strong believer that we have to do something about climate change on day one,” Klobuchar said following the roundtable discussion. “Those are rules so they are easier to put (out for a vote), and you may have comment periods, but you can get those done in the first year.”

Klobuchar also shared her visions to get to universal health care through a public health insurance option.

Read the original article: Klobuchar Talks Ethanol Challenges at Nevada Plant

Senator Chuck Grassley

April 11, 2019

Press Release

U.S. Sen. Chuck Grassley of Iowa sent a letter to Department of Energy (DOE) Secretary Rick Perry asking for clarity about the department’s review process concerning Renewable Fuel Standard (RFS) hardship exemptions, submitted by small refineries. The DOE provides recommendations on exemption requests to the Environmental Protection Agency (EPA). 

“EPA has granted an unprecedented number of small refinery hardship exemptions for 2016 and 2017 and even more small refineries are seeking exemptions from the RFS for 2018,” Grassley wrote. “With Renewable Identification Numbers (RINs) at multi-year lows, it’s hard to comprehend the alleged disproportionate economic hardship that any refinery could face.”

Grassley is a leader in the fight to maintain a strong Renewable Fuel Standard (RFS). He led efforts to put pressure on the EPA to stop issuing “hardship waivers” to obligated refiners as well as make the waiver process more transparent and highlight the importance of the RFS to President Trump and his administration.

Full letter is available here and below.

The Honorable Rick Perry

Secretary

United States Department of Energy

1000 Independence Ave., SW

Washington, DC 20585

Dear Secretary Perry:

U.S. Environmental Protection Agency (EPA) Administrator Wheeler has informed me and my colleagues in Congress recently that EPA is waiting on recommendations from the Department of Energy (DOE) regarding a record number of 39 applications submitted by small refineries seeking disproportionate economic hardship exemptions from the Renewable Fuel Standard (RFS) for the year 2018. EPA has granted an unprecedented number of small refinery hardship exemptions for 2016 and 2017 and even more small refineries are seeking exemptions from the RFS for 2018. With Renewable Identification Numbers (RINs) at multi-year lows, it’s hard to comprehend the alleged disproportionate economic hardship that any refinery could face. I am writing to seek clarity regarding the DOE’s review of requests to exempt certain small refineries from their obligations to comply with the RFS provisions of the Clean Air Act.

As you know, Section 211(o)(9)(B)(ii) of the Clean Air Act requires the EPA to consult with DOE in evaluating the small refinery hardship exemptions. EPA makes the final decision on granting such exemptions but Administrator Wheeler also suggested that EPA simply follows the recommendations of DOE. If this is the case, I would like to understand what has changed in DOE’s approach to evaluating such requests that would explain the sudden surge in the number of exemption extensions granted to small refineries over the last two years.   

The criteria by which DOE is supposed to evaluate small refinery exemption extensions have not changed since 2011, when DOE created a scoring methodology for such requests as part of a congressionally-mandated study. DOE’s methodology requires an evaluation of the structural impacts that compliance with the RFS might cause, such as limited access to capital and credit, as well as an evaluation of how RFS compliance would significantly impair refinery operations viability. Although DOE maintains it hasn’t changed these criteria, the number of small refinery exemption applications and approvals inexplicably has soared in the last two years.

Recent litigation in the D.C. Circuit has revealed that out of 48 applications for small refinery exemptions to EPA for compliance years 2016 and 2017, DOE had given the applicant a viability score of zero in at least half of those cases. This seems to indicate that compliance costs with the RFS had little to no impact on the small refinery’s ability to stay competitive and profitable. Given EPA’s assertion that it’s granting of small refinery exemptions remains based on DOE’s analysis and recommendations, I respectfully seek the following information from DOE:

1. Has DOE changed the criteria, the interpretation of the criteria, the methodology, or any other significant aspect of how it makes its recommendations to EPA for small refinery exemptions?

2. Are you aware of any instances where DOE recommended no small refinery exemption (or only a partial exemption) but EPA granted a small refinery exemption anyway? If so, how many times has this occurred?

3. DOE’s 2011 Small Refinery Study states that DOE would make a recommendation of disproportionate impact if scoring of both indices—Disproportionate Structural Impacts Metrics and Viability Index—were greater than one. How does DOE’s recommendation for a partial exemption to a small refinery with a Viability Index of 0.0 square with the statute’s requirement that the exemption can be extended only if the refinery is subject to a “disproportionate economic hardship” from compliance with the RFS?

I look forward to your response.

Read the original press release: Grassley Questions Hardship RFS Exemption Review Process at DOE