Peterson is calling for transparency to be achieved before the 2021 oil refinery renewable volume obligations are released by the EPA.
(Source: Office of Minnesota Congressman Collin Peterson, WNAX, Sept., 2020)
Contact: Office of Minnesota Congressman Collin Peterson, (507) 637-2270, collinpeterson.house.gov
More Low-Carbon Energy News RFS, Refinery Waivers, Biofuel Blend,
In a blatant move to win support and placate the biofuels and refinery interests, Trump has suggested he'd provide $300 million to oil refiners and that those funds would come out of the USDA Commodity Credit Corp. (CCC) which is intended to provide farmers with Market Facilitation Program (MFP) payments.
Commenting on Trump's possible cash payments to refiners scheme, former Agriculture Secretary Tom Vilsack said he "strongly expects that no action will be taken on the remaining waivers until after the election." Vilsack was critical of the reports that the President indicated that he would offer $300 million through the CCC fund in lieu of the waiver approvals, as the CCC is designed specifically to be used by USDA for the purpose of helping farmers.
As previously noted, "hardship waivers" were intended for refineries producing 75,000 bpd or less and suffered "disproportionate economic hardship" from the costs of RFS compliance. The waiver frees the refineries from an obligation to provide the EPA with biofuels credits proving compliance. (Source: EPA, Feedstuffs, 17 Sept., 2020)
More Low-Carbon Energy News Trump, RFS, Refinery Waivers, Biofuel Blend, Tom Vilsack ,
As previously noted, "hardship waivers" were intended for refineries producing 75,000 bpd or less and suffered "disproportionate economic hardship" from the costs of RFS compliance. The waiver frees the refineries from an obligation to provide the EPA with biofuels credits proving compliance. Under the now vanquished administrator Greg Pruitt's direction, the EPA handed out 54 exemptions over two years and not a single request for an exemption was denied.
Interestingly, it is being widely reported that Trump is suggesting cash payments to refineries that have had waiver applications rejected, thus placating the biofuels and oil industries in a thinly-veiled move to win re-election in Nov. (Source: Various Media, OilPrice, 14 Sept., 2020)
More Low-Carbon Energy News Trump, RFS, Refinery Waivers, Biofuel Blend,
The president's could be seen as an effort to shore up his support in the Corn Belt states.
As previously noted, "hardship waivers" were intended for refineries producing 75,000 bpd or less and suffered "disproportionate economic hardship" from the costs of RFS compliance. The waiver frees the refineries from an obligation to provide the EPA with biofuels credits proving compliance. Under the now vanquished administrator Greg Pruitt's direction, the EPA handed out 54 exemptions over two years and not a single request for an exemption was denied.Under the U.S. Renewable Fuel Standard, the nation's oil refineries are required to blend billions of gallons of biofuels such as ethanol into the fuel or buy credits from those that do. But the EPA can waive their obligations if they prove compliance would cause them financial distress. (Source: Chronicle Herald, 10 Sept., 2020)
More Low-Carbon Energy News Trump, RFS, Refinery Waivers, Biofuel Blend,
The agency now lists seven pending requests each for 2011 and 2012, 11 each for 2013 and 2015, 12 in 2014, eight in 2016 and two in 2018, as well as 27 listed for 2019 and one for 2020. The agency granted 85 waivers for the period 2016 to 2018.
As previously noted, "hardship waivers" were intended for refineries producing 75,000 bpd or less and suffered "disproportionate economic hardship" from the costs of RFS compliance. The waiver frees the refineries from an obligation to provide the EPA with biofuels credits proving compliance. Under the now vanquished administrator Greg Pruitt's direction, the EPA handed out 54 exemptions over two years and not a single request for an exemption was denied.Under the U.S. Renewable Fuel Standard, the nation's oil refineries are required to blend billions of gallons of biofuels such as ethanol into the fuel or buy credits from those that do. But the EPA can waive their obligations if they prove compliance would cause them financial distress. (Source: EPA,DTN, 16 July, 2020)
More Low-Carbon Energy News RFS, Hardship Waivers, Biofuel Blend,
"This long-awaited move unlocked the door to future demand growth for ethanol and corn. It also meant consumers would have increased access to cleaner and more affordable fuel options at the pump.
"Just as expected, the marketplace responded quickly. In the year since the red-tape barrier was removed, E15 sales are up 50pct.
"But E15 growth would have been exponentially larger if not for your EPA continuing to excuse oil refiners from their legal obligations to blend renewable fuels. As we told you a year ago, EPA's refinery waivers have caused devastating demand losses for ethanol and corn, and they under mine the expansion of E15.
"Even after a federal court overturned some refinery waivers in January, your EPA continues to receive dozens of exemption requests from oil companies. EPA is now even considering giving retroactive waivers for years that pre-date your administration.
"This needs to stop. It is hurting farmers, costing consumers, and derailing progress on energy and environmental security.
"The economic pain in farm country caused by these refinery waivers was compounded this spring—first by the Saudi-Russia oil price war, and then by the COVID-19 pandemic. As a result of this 'perfect tsunami,' half of the ethanol industry was recently shut down, leading to layoffs across rural America. The ethanol industry and farmers are hurting like never before.
Mr. President, we need your help. We ask that you stand up for the Renewable Fuel Standard. Please direct your EPA to abide by the January court ruling and end the abuse of the refinery waiver loophole.
"You stood by us, farmers, and consumers when you directed EPA to allow year-round E15. Now, we humbly ask that you stand with us again and ensure ethanol demand is not eroded by illegal refinery waivers. Thank you,"
"We are writing to express dismay at your recent decision to grant 31 waivers from the Renewable Fuel Standard (RFS) program. Plainly stated, that decision is putting U.S.biodiesel producers out of business and worsening the year's outlook for soy farmers. And while you have expressed concern to save small petroleum refineries, you should also understand that small U.S. biodiesel producers need a positive signal.
"Within a week of your decision on the 31 waivers, one U.S. biodiesel producer announced plans to close three plants -- in Pennsylvania, Georgia, and Mississippi. Other producers have announced closings and laid off workers. More than 200 million gallons of domestic biodiesel production has been idled this year, due to instability in federal policy. We anticipate that additional facilities will close over the next several months if you do not take quick action to restore RFS volumes for biodiesel and renewable diesel.
"Every small refinery waiver issued by the EPA has the potential to put a U.S.biodiesel producer out of business. A small oil refiner processing 75,000 barrels of oil per day can produce nearly 1 billion gallons of fuel in a year. The RFS program requires that oil refiner blend about 20 million gallons of biodiesel or renewable diesel during the year -- a very small fraction of overall fuel production. However, there are dozens of biodiesel producers who produce 20 million gallons of fuel or less each year; three-fifths of U.S. producers are small, non-integrated facilities.
Small refinery waivers destroy demand for all biofuels across the board, with a significant impact on domestic biodiesel and renewable diesel producers. According to University of Illinois economist Scott Irwin, the exemptions especially harm biodiesel and renewable diesel producers because of the way the RFS is constructed. The 1.4 billion gallons of renewable fuel eliminated from the 2018 RFS through the 31 waivers includes hundreds of millions of gallons of biodiesel and renewable diesel in the biomass-based diesel, advanced and overall volumes.
"The small refinery exemptions are compounding the policy headwinds our industry is facing. Biodiesel producers have waited more than 20 months for Congress to address expired tax incentives. Additionally, your U.S. Department of Commerce is proposing to virtually eliminate countervailing duties on unfairly subsidized Argentine biodiesel. Those duties were put in place to counteract years' worth of unfair trade practices by Argentina. Soy farmers have faced closed markets, depressed crop prices, and weather-related challenges. Those forces have reduced soy planting by 15 percent for the current marketing year. Biodiesel is a value-added market driver for America's soybeans, at a time when markets have been shut or diminished.
"The biodiesel industry continues to rely on the RFS to incentivize growth. Biodiesel and renewable diesel can be used in any existing diesel engine without special equipment for blending or dispensing. Producers therefore rely on a positive signal and support from federal programs to continue opening the transportation market to higher volumes.
"Biodiesel producers and soy farmers rely on the RFS program. Growth in the biodiesel market is the only way to keep domestic producers operating and protect U.S. workers' jobs. Unfortunately, EPA is proposing zero growth for biomass-based diesel. We have asked the agency to do two things: first, properly account for the small refinery exemptions handed out over the past few years and going forward; and second, provide growth in the biomass-based diesel market for 2020 and 2021.
"We ask that you continue to support the RFS and save small biodiesel producers. (signed) National Biodiesel Board (NBB)" (Source: NBB, 9 Sept., 2019) Contact: NBB, Donnell Rehagen, CEO, Kurt Kovarik, VP Federal Affairs, (800) 841-5849, www.biodiesel.org
More Low-Carbon Energy News NBB, Biodiesel, RFS,
Perdue either couldn't or wouldn't say what action the president will or might take, but noted that Trump believes the EPA waivers were "way overdone." Ethanol advocates contend that oil refinery waivers have reduced ethanol production by 2.6 billion gallons since Trump moved into the White House.
When grilled on the Trump administration's biofuels, trade and Renewable Fuel Standard and related policies Perdue replied "EPA will continue to consult with our federal partners on the best path forward to ensure stability in the Renewable Fuel Standard. The president will always seek to engage with stakeholders to achieve wins for the agriculture and energy sectors." So sayeth Sonny!(Source: St. Louis Post-Dispatch, CBS, Various Media, 28 Aug., 2019) Contact: Office of US Sec of Agriculture, Sonny Perdue, (202) 720-2791, email@example.com, www.usda.gov, twitter.com/SecretarySonny
More Low-Carbon Energy News RFS, "Hardship" Waivers, Ethanol, Sonny Perdue, Trump,
"Congress passed the Renewable Fuel Standard (RFS) back in 2007, signed into law by George W. Bush -- a lifelong oil and gas guy. The law was passed to encourage investment in advanced biofuels like biodiesel, renewable diesel and renewable jet fuel. Biodiesel producers responded, making the investments and building an industry that today produces more than 2 billion gallons of transportation fuel each year. This market also provides added value to feedstocks such as soybean oil, used restaurant oil and animal fats.
"The oil industry feverishly insists that the ethanol industry isn't harmed by small refinery exemptions because production has grown. But what about biodiesel? They never mention us because they know that small refinery exemptions disproportionately affect biodiesel because of the way the RFS is constructed.
"We have said again and again -- biodiesel is very different from ethanol. The president (Trump) was instrumental in clearing the path for higher blends of ethanol year-round when he lifted the RVP waiver this summer, which we were supportive of. He and his EPA administrator have mentioned E15 when they have spoken about what they believe to be the minor impact of exempting RFS gallons. It's as though they think we are dumb enough to not understand that they are giving with one hand but taking away with the other.
"Now, back to biodiesel. E15 does nothing to expand demand for biodiesel. Ethanol is not biodiesel. In fact, the RFS recognized this by establishing its own category for biodiesel, separate from ethanol, called biomass-based diesel. Policymakers at the time recognized the need to segment biodiesel and renewable diesel within the bigger RFS pool so that growth in those products could be differentiated in the overall program and we would see advancements of biofuels in both the gasoline and diesel sector.
"Fast forward to 2019 and we now have an EPA that, two months ago, proposed a draft rule to hold the biomass-based diesel category flat for 2020, keeping it at 2.43 billion gallons for the second year in a row and then, just last week, the same EPA grants nearly one-half billion gallons of biomass-based diesel waivers. To highlight the hypocrisy in this action, while filing the draft rule two months ago, the EPA documented, in writing, the fact that they expected to grant zero (that's zero as in none, zilch, nada) gallons of small refinery waivers in 2020. And we're supposed to understand and accept that move?
"Biodiesel and renewable diesel year after year fill more than 90 percent of the RFS volumes reserved for advanced biofuels. But EPA complains that advanced biofuels have not materialized quickly enough to meet the goals of the RFS. Now -- as seen last week -- the agency is holding its thumb on the industry and blocking growth. Not only blocking growth, but helping to reduce demand through small refinery exemptions.
"As the agency continues to hand them out to every refiner that asks, the damage could reach $7.7 billion or 2.54 billion gallons, according to Scott Irwin, an agricultural economist from the University of Illinois. A 'small' oil refinery, by RFS definition -- one that processes 75,000 bpd of oil and produces nearly a billion gallons of fuel a year -- would have an RFS obligation to use just 20 million gallons of biodiesel or renewable diesel. Many U.S. biodiesel producers are smaller than that -- just one small refinery exemption would eliminate their entire market. And the EPA granted 31 of them.
"President Trump vowed to protect and defend American farmers. In fact, he calls them patriots. But his actions will put the biodiesel producers those same farmers depend on for their market, out of business. It's already happening, and it's having a devastating impact on rural communities across the nation.
"President Trump and EPA Administrator Wheeler should clearly know what this means to the workers, producers, farmers and investors in the biodiesel and renewable diesel industry -- their new round of unwarranted RFS exemptions just destroyed jobs and a valuable marketplace for hardworking Americans, including those patriotic soybean farmers who Trump has called on to be his willing allies in the trade dispute with China. If this is how the EPA administrator treats the president’s allies, I'd hate to see how he treats his enemies.
(Source: NBB, 15 Aug., 2019) Contact: NBB, Donnell Rehagen, CEO, Kurt Kovarik, VP Federal Affairs, (800) 841-5849, www.biodiesel.org
More Low-Carbon Energy News NBB, Biodiesel,
"As long as EPA continues to dole out compliance exemptions to oil refiners without reallocating the lost volume, the agency may as well start referring to the annual RFS levels as 'renewable volume suggestions' rather than renewable volume 'obligations'. It is a complete misnomer to call these blending volumes 'obligations' when EPA's small refinery bailouts have essentially transformed the RFS into a voluntary program for nearly one-third of the nation's oil refineries.
"In its announcement today, EPA has proposed a total renewable fuel volume of 20.04 billion gallons, of which 5.04 billion gallons are advanced biofuel, including 540 million gallons of cellulosic biofuel. That leaves, on paper, a 15-billion-gallon requirement for conventional renewable fuels like corn ethanol, unchanged from 2019.
"Most notably, EPA failed to prospectively account for any expected small refinery exemptions in the 2020 proposal, even though it is almost a foregone conclusion at this point that the Agency will continue to grant more exemptions.
"Congress gave EPA the direction and tools necessary to ensure that the statutory RFS volumes are enforced, and that includes prospectively reallocating exempted volumes to non-exempt parties. Instead, EPA has chosen to continue its demand destruction campaign that has been crippling to both ethanol producers and the farmers who supply our industry. Enough is enough.
"EPA approved 54 exemptions for 2016 and 2017 and an additional 38 requests for 2018 exemptions are pending. Not a single exemption request has been denied by EPA since 2015. The exemptions effectively lowered the total RFS requirement for 2017 by 1.82 billion gallons and cut the 2016 requirement by nearly 800 million gallons.
"Making matters worse, EPA's proposal continues to flout the D.C. Circuit Court's 2017 order requiring the Agency to restore 500 million gallons of renewable fuel obligations that it inappropriately and illegally waived from the 2016 RVO. Unbelievably, the Agency is proposing to snub the court's ruling by refusing to restore the 500 million gallons remanded volume. EPA's stubborn refusal to obey a court order to restore lost demand is yet another kick in the teeth to U.S. renewable fuel producers and farmers already facing the worst market conditions in a generation. EPA's suggestion that following the court's directive would place an 'additional burden' on obligated parties is an insult and an affront to the farmers and ethanol producers who trusted this administration would follow the law. The RFS wasn't intended to make oil refiners comfortable; it was intended to change the status quo by guaranteeing renewable fuels would have access to a marketplace otherwise closed to competition.
"EPA appears to be selling out to oil refiners -- again -- at the expense of rural America. The court found in favor of renewable fuel producers in 2017 because it was clear our industry had been harmed by EPA's illegal use of a general waiver -- now EPA is doubling down on that harm to the ethanol industry and farmers.
"Today's proposal undermines the pledge President Trump made to farmers and renewable fuel producers that his administration would enforce the statutory RFS volumes. By failing to prospectively reallocate, failing to commit to a more judicious and restrained approach to refinery waivers, and failing to follow a court's order to restore lost demand, EPA is blatantly undercutting President Trump's commitment to ethanol, which he restated less than a month ago when he visited the Southwest Iowa Renewable Energy ethanol plant. We urge the President to resolve the disconnect between the oval office and EPA and get the RFS back on track." (Source: RFA, PR, 8 July, 2019) Contact: Renewable Fuels Association, Geoff Cooper, (202) 289-3835, www.ethanolrfa.org
More Low-Carbon Energy News RFA, RFS,