Department of Energy Finishes Recommendation on Retroactive RFS Exemption Requests

Reuters writer Stephanie Kelly reported this week that, “The U.S. Department of Energy has recommended that some of the oil refiners that applied for retroactive exemptions from the nation’s biofuel blending law be granted partial relief, two sources familiar with the matter said on Tuesday.

“The move could help bring those refining companies into compliance with a court ruling earlier this year that requires waivers granted since 2010 to take the form of an extension – the latest twist in a long-running battle between the refining and biofuel industries over the program.

At present there are 58 pending requests from refiners for waivers covering the years 2011 through 2018, according to government data. The sources said the DOE recommended to the U.S. Environmental Protection Agency, which has final say on the waivers, that ‘a number’ of those requests be partially granted. The sources, who requested anonymity in order to speak candidly, could not immediately provide further details.

The Reuters article noted that, “Under the U.S. Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into their fuel, or buy credits from those that do. Small refiners that prove the rules would financially harm them can apply for exemptions.

“In January, the Denver-based 10th U.S. Circuit Court of Appeals ruled that waivers granted to small refineries after 2010 had to take the form of an ‘extension.’ Most recipients of waivers in recent years have not continuously received them.”

Ms. Kelly added that, “Senators Chuck Grassley and Joni Ernst, both from Iowa, the top ethanol-producing state, sent a letter to DOE on Tuesday asking for further details on the recommendations and expressing opposition to the waivers.”

Also this week, DTN writer Todd Neeley reported that, “Iowa Sens. Charles Grassley and Joni Ernst, both republicans, voted against the nomination of Mark Menezes as deputy secretary of energy, stating in a letter to Menezes on Tuesday that they need to see more transparency on the U.S. Department of Energy’s evaluation of small-refinery exemptions.

“During a news conference on Tuesday, Grassley said the DOE sent to EPA 58 so-called gap-year requests for exemptions. EPA has 90 days to decide whether to grant them.

“The requests have been made by refiners for retroactive exemptions for years 2011 to 2018. Refiners made the requests to comply with a court ruling from the U.S. Court of Appeals for the 10th Circuit in Denver. The court ruled the EPA mishandled waivers granted to three companies.”

Meanwhile, Ken Anderson reported last week at Brownfield News that, “Iowa Senator Joni Ernst is again calling on EPA Administrator Andrew Wheeler to cut ‘unnecessary’ barriers to increased sales of E15.

“Ernst says Wheeler has failed to follow through on an agreement he made last year to expedite EPA’s process for certifying underground fuel tanks and to eliminate E-15 warning labels.

“In a letter to Wheeler, Ernst requests action on those issues by October 4th.”