The Environmental Protection Agency (EPA) needs a transparent process to guide its assessment of small refinery waiver requests to ensure that such exemptions don’t continue to undermine the law’s intent and decrease demand for biofuels, a travel center executive testifying on behalf of NATSO told the agency July 18.
Testifying at an EPA field hearing in Ypsilanti, Michigan, on the 2019 proposed renewable volume obligations (RVOs) under the RFS, Beth Westemeyer, Director of Business Development for Anew Travel and Fuel Centers, the retail arm of Zeeland Farm Services in Zeeland, Mich., said that over the past decade the RFS has succeeded because it allows fuel retailers to offer biofuel blends to consumers at a price that is less expensive than purely petroleum-based products.
Small refinery waivers fundamentally impact the entire intent of the RVO process, however, by lowering demand for biofuels and diminishing the value of the investments the industry has made in response to Congressional policy.
“Without knowing to what extent these exemptions are undercutting the annual mandate, businesses like mine are left in limbo while renewable fuels markets plummet,” Westemeyer testified. “Granting the requests secretly is patently inequitable and comes uncomfortably close to government-sanctioned market manipulation. It was upsetting to learn that in the context of this RVO proposal, [EPA] asked the public not to comment on the small refinery exemptions that have been issued. This is despite the fact that the small refinery waivers fundamentally impact the entire intent of the RVO process.”
Westemeyer urged EPA to develop a transparent, rules-based process to guide the Agency's assessment of small refinery waiver requests.
NATSO, along with the American Petroleum Institute, oppose the use of the exemptions, which undercut investments fuel marketers have made in renewable fuel infrastructure.
EPA has the authority to grant waivers freeing small refineries from their obligations from mixing biofuels under the RFS if they can prove that it would cause them an economic hardship. In recent months, however, EPA issued nearly 50 retroactive waivers -- an unprecedented number -- including to some of the nation’s biggest refineries.
EPA has been under fire for abusing the waivers to quietly undercut the RFS after the agency in early April exempted Andeavor, which posted net profits of $1.5 billion last year, from complying with the U.S. biofuels regulation.
EPA is only allowed to grant waivers for refineries producing less than 75,000 barrels per day that can demonstrate economic hardship, yet the agency exempted Andeavor, which is one of the nation’s largest oil refining companies. The exemption released the company of its obligation to provide EPA with the biofuels credits that show it has complied with the RFS.
Annual renewable fuel volume obligations established under the RFS are designed to create market certainty and encourage fuel retailers to invest in the infrastructure necessary to incorporate and sell biodiesel. Westemeyer said the hardship waivers “contradict the purpose of the RFS of displacing petroleum-based fuels with renewable substitutes that have more favorable emissions characteristics.”
Westemeyer’s full testimony can be found here.
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