By Chris Clayton
DTN Ag Policy Editor
OMAHA (DTN) — Seven Midwest senators and Iowa’s governor, all Republicans, are pushing back on EPA’s supplemental plan for the Renewable Fuel Standard, stating in comments that EPA’s latest plan continues to kowtow to petroleum industry profits.
EPA is in the middle of a comment period for a plan that would add to 2020 RFS volumes by accounting for small-refinery exemptions and ideally achieve at least 15 billion gallons of renewable fuel volumes in 2020. EPA wants to use a Department of Energy recommendation on waived gallons from 2015 to 2017, or an average of roughly 770 million gallons.
Yet, biofuel advocates maintain the deal struck at the White House back in September calls for factoring in a three-year average of biofuel gallons exempted from 2016 to this year, which comes in closer to 1.35 billion gallons a year.
Iowa Gov. Kim Reynolds submitted public comments in a letter to EPA Administrator Andrew Wheeler, along with fellow Iowa Republicans, Sens. Charles Grassley and Joni Ernst. Reynolds noted EPA had “re-interpreted what was agreed to” at the White House. The proposal, the governor said, “offers no accountability or transparency, and may very well fall short of the 15-billion-gallon blending commitment.” Reynolds added EPA is rejecting hard data provided on actual gallons lost in favor of a theoretical calculation.
CONSIDER REAL-WORLD RAMIFICATIONS
“I write today to implore the EPA to consider the real-world ramifications of these decisions,” Reynolds said. “These rules have a real and tangible impact on the people of Iowa and across the country.”
Ernst said the market will not invest in biofuels if the industry does not trust EPA to implement the proposal approved by President Donald Trump. That will lead to “a dangerous spiral for our industry, which will only lead to more plants closes and jobs lost in the heartland.”
Sen. Deb Fischer of Nebraska pointed out in her letter that the CEO of a major oil refinery “bragged” that small-refinery exemptions were a cash cow for the petroleum industry.
Earlier this week, Uzi Yemin, chairman, president and CEO of Delek US, said in a quarterly call his company limits crude oil production at a plant in Arkansas to under 75,000 barrels a day because if Delek increased production, it would lose access to the small-refinery exemptions. Yemin was quoted saying the refinery waivers were “a real cash flow that we get every year.” (https://www.fischer.senate.gov/…)
Fischer said in her letter that, in recent years, “there has been a noticeable disconnect” between Department of Energy recommendations and EPA’s actions on small-refinery exemptions, with EPA signing off on far more exemptions than recommended.
“Given this track record of not following DOE’s recommendations, biofuel producers, farmers and I cannot have confidence that the RVOs will actually be met,” Fischer said.
CRITICAL IMPORTANCE TO AG
Sen. John Thune of South Dakota wrote that EPA’s plan “lacks safeguards that will assure its intent.” Thune added that the RFS production volumes were a “matter of critical importance to agriculture stakeholders in South Dakota and across the country.” Thune urged EPA to draft language into the rule that would “make certain that all gallons waived” by small-refinery exemptions would be accounted for in RFS volume obligations.
Sen. Roy Blunt of Missouri, Sen. Mike Braun of Indiana and Sen Mike Rounds of South Dakota also each wrote letters.
On Monday, more than 60 corn, soybean and biofuel groups also wrote EPA, stating that its plan failed to protect the farm economy and biofuel plants in rural America.
EPA held a hearing on its proposal in Michigan on Oct. 30, then opened up a 30-day comment period on its plan.
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClayton DTN
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