A bipartisan group of 18 senators wants to know how the Trump administration will approach a regulatory fix to allow summer sales of E15 as news of waivers granted to small refineries continues to frustrate renewable fuel organizations.
According to Reuters, the latest waiver to be made public was issued to CVR Energy, a company owned by former Trump adviser Carl Icahn. The news is the latest in a string of reported exemptions from the Renewable Fuel Standard, which totaled 1.12 billion gallons of “direct demand destruction,” Ag Secretary Sonny Perdue told the Senate Agriculture Committee last week.
Emily Skor, CEO of Growth Energy, said the news of CVR’s waiver is further evidence that “Congress and the White House need to rein in the EPA and return the agency to serving the president’s promised agenda.”
“This is just one more example of the EPA taking money out of the pockets of American farmers and undermining President Trump’s promises to rural communities,” she said. “The EPA is giving refineries everything they want, at the expense of rural families, while refusing to move forward on the President’s pledge to lift barriers against year-round sales of E15.”
Renewable Fuels Association President and CEO Bob Dinneen said the exemptions have been issued “at an unprecedented and alarming rate.”
“The result of these secret waivers is a windfall for Fortune 500 companies who are not the truly 'small refiners' for whom the exemption was originally intended, and who are clearly not suffering 'economic hardship.'"
While other waivers have been previously reported, the connection to Icahn could add an additional layer of controversy. Icahn was reportedly behind a push last year to shift the RFS point of obligation - that is, responsibility for blending renewables into the fuel supply - from refiners to retailers. That effort was ultimately unsuccessful. Icahn, in his capacity as a presidential adviser, also is said to have interviewed prospective EPA administrators, including former Oklahoma Attorney General Scott Pruitt, who eventually got the job.
A refining industry source disputed that the waiver was offered as a favor to Icahn.
“Refineries that qualify for hardship treatment do so based on specific facts related to their operations and economics; it isn’t based on a popularity contest for their investors,” the source said in an email to Agri-Pulse, also pointing out the role of the Department of Energy in the process.
The waivers can be granted to small refineries – with production capacity of less than 75,000 barrels per day – that can prove “disproportionate financial hardship” if forced to comply with the RFS. Pruitt has defended EPA’s use of the waivers, saying the agency is working to comply with a court ruling that said the Obama administration was too stingy in awarding the exemptions.
The letter from the senators does not mention the hardship waivers, but does press Pruitt for details on how he plans to fulfill Trump’s “recent commitment to allow for 15 percent ethanol blends to be sold year around.” Earlier this month, Trump said before the start of a meeting with farm state lawmakers that “we’re going to raise it up to 15 percent … We’re going to go to 12 months, which makes a lot of farmers very happy.”
Now, a host of senators from ethanol-producing states want to know how – and when – Pruitt plans to achieve the goal of E15 parity.
“First, we ask you to provide an expected timeline of the rulemaking process to clarify how the agency will make this change to allow higher ethanol blends access to the market place,” the letter reads. “Additionally, we ask that you provide immediate clarity to allow higher ethanol blends to be sold in the interim while the outdated regulation is being changed.”
While the letter doesn’t directly mention the use of hardship waivers, many of the signatories have been critical of the administration’s issuing of the exemptions. In a statement, Iowa Republican Chuck Grassley said the use of these waivers breaks commitments Trump has offered to support ethanol.
“By handing out ‘hardship’ waivers to highly profitable, big oil refining companies, Administrator Pruitt is undermining the integrity of the Renewable Fuel Standard,” Grassley said. “He’s also breaking his own promise he made to me and several other senators to support the spirit of the law. Hundreds of millions – and in some cases billions – of dollars in profits isn’t my definition of ‘hardship.’
“President Trump promised to support home-grown biofuels,” he continued, “and Administrator Pruitt is breaking that promise.”
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