NEW YORK (Reuters) – The U.S. Environmental Protection Agency granted 25 small oil refineries hardship waivers from the nation’s biofuel laws in 2017, according to an agency source, representing an expansion of the waiver program.
The EPA’s use of the waivers – meant to help small operations that are struggling to comply with the U.S. Renewable Fuel Standard (RFS) – has long been a source of frustration for the corn industry which argues they hurt farmers by undermining demand for ethanol.
“While the applications continue to come in, EPA has granted roughly 25 so far,” the EPA source told Reuters, asking not to be named.
The EPA, which refuses to disclose the waiver recipients on confidential business grounds, said nothing had changed under the administration of President Donald Trump.
“The criteria used to grant waivers has not changed since previous administrations,” spokesperson Liz Bowman said.
In a typical year, the EPA would receive about 12 to 15 requests for hardship exemptions, which are available to refineries of less than 75,000 barrels per day that can demonstrate financial need, and would grant about half of them, a second source familiar with the program told Reuters.
But refiners, including large ones such as Andeavor, have applied for the waivers in larger numbers after a federal appeals court ruling last year that said the EPA must expand the guidelines for approving them.
Refiners have also been encouraged to apply by the Trump administration’s recent efforts to broker a deal between the oil and corn industries to reduce the costs of the RFS. Those talks have not yielded a deal.
Under the RFS requirements, adopted a decade ago, refiners must blend increasing volumes of biofuels such as ethanol into the nation’s fuel every year, or purchase tradable blending credits from other companies that do such blending.
Refiners granted exemptions win in two ways: They no longer have to blend biofuels or buy credits to comply with the law, and they can sell any credits they had previously purchased to use for compliance.
News that Andeavor had received an exemption, reported by Reuters on Tuesday, drew criticism from biofuel backers, who fear that EPA administrator Scott Pruitt is using the waiver program to gut a program he dislikes.
“Mr. Pruitt is eviscerating a law the president supports – in complete secrecy,” Brooke Coleman, head of the Advanced Biofuels Business Council, said.
Trump campaigned on a promise to support the RFS.
U.S. Senator Chuck Grassley, a Republican who represents Iowa – the nation’s largest corn-growing state, said the expansion of the waiver program raised legal questions.
Giving Andeavor “a free pass when other companies are required to follow the law of the land isn’t just unfair, it may be illegal,” Grassley told Reuters late Tuesday.
Reporting By Jarrett Renshaw; Editing by Chizu Nomiyama and Susan Thomas