WASHINGTON, Oct. 25, 2017 - Just a day after EPA Administrator Scott Pruitt sent a letter aimed at silencing strong concerns voiced by Midwestern U.S. senators and governors about implementation of the Renewable Fuel Standard, a northeastern governor weighed in on behalf of refineries, asking for a waiver.
Last week, Pruitt assured agriculture-focused Midwestern U.S. senators that the agency would not reduce blending requirements, allow exported biofuels to count toward RFS compliance or adopt other changes sought by U.S. refiners.
That prompted Pennsylvania Governor Tom Wolf to ask President Donald Trump to waive RFS Renewable Volume Obligations (RVOs) for Northeast refiners unless or until the prices of Renewable Identification Numbers (RINs) deflate.
“I am concerned that high RIN prices and the volatile market may lead to the closure of one or more of these merchant refiners, which would be devastating to the regional economy,” Wolf wrote. His requests follow similar demands from several members of Pennsylvania’s congressional delegation.
Costs to acquire RINs, which refiners and importers need to demonstrate mandatory volumes of renewable fuels enter the domestic transportation supply, imperil almost 2,000 jobs and threaten to drive up northeastern U.S. fuel prices, the governor said in his Oct. 20 letter to the president.
Renewable Fuels Association President and CEO Bob Dinneen rebutted the argument, saying the governor’s RFS waiver request “doesn’t meet the very high threshold required by the statute and previously utilized by EPA in responding to similar requests.”
Section 211(o)(7) of the Clean Air Act allows a waiver if the EPA administrator determines that implementation of the RFS requirements would severely harm the economy of a state, a region or the United States. Further, for a waiver to be granted, EPA must find that implementation of the RFS itself would severely harm the economy, not just contribute to such harm in one sector of the economy.
“By any measure, the RFS has actually helped, not harmed, the economy,” Dinneen noted. “Since 2005, when the RFS was initially enacted, U.S. ethanol industry jobs grew 121 percent to 339,176 in 2016, and the value of the industry’s output quadrupled to $32.8 billion last year. Meantime, ethanol is currently priced below petroleum, and the RFS allows consumers to take advantage of the cleanest, lowest cost and highest-octane fuel on the planet.”
Dinneen said that the primary driver behind this waiver request is Philadelphia Energy Solutions (PES), owner and operator of the oldest refinery in the nation.
“It is not the fault of the RFS or RINs that PES can’t compete with newer, more efficient refineries that have better access to lower-priced, lighter crude oil sources," he said. "PES could entirely eliminate its RIN costs by investing in ethanol blending infrastructure – as other merchant refiners have done – rather than continuing to throw good money after bad in a PR and legal crusade against the RFS.”
In the midst of a drought that destroyed many corn fields in 2012, governors in 10 states also petitioned EPA for a waiver. But the EPA rejected those requests.