The Environmental Protection Agency could have a different tool in its toolbox as biofuel and energy interests continue to debate the role of small refiner exemptions (SREs) in the Renewable Fuel Standard: keep offering the waivers, but on a partial basis.
The idea resides within the same sentence of the Clean Air Act that authorizes the hotly debated waivers, but questions surround just how the agency would go about making them work.
“The law specifically says ‘full or partial,’ so I think what (the EPA is) looking at is what does partial look like, and I don’t think we have any answer to that,” Growth Energy Vice President of Government Affairs John Fuher told reporters on Monday.
Scott Segal, co-chair of Bracewell LLP’s Policy Resolution Group, told Agri-Pulse he heard rumblings of partial waiver consideration as well, but wonders if such a policy maneuver could stand up to legal scrutiny.
“It’s hard to see how that would work if the justification is essentially political,” he said. “The fact of the matter is, the size of the waiver correlates to the underlying economic analysis.”
Neither Fuher nor Segal could think of precedent for partial waivers, and both acknowledged the litany of implementation questions that would surround a shift in that direction.
Asked if the EPA is considering partial waivers, an agency spokesman said the issue "is the subject of ongoing discussions with USDA, the White House, and the Department of Energy. Any decision will be made consistent with those discussions."
The biofuel sector has been vocal in its criticism of how EPA handled the SREs during former administrator Scott Pruitt’s tenure. To a certain extent, the jury is still out on Andrew Wheeler, the acting administrator who took the helm after Pruitt’s resignation. Wheeler has said he hopes to offer additional transparency on the waivers, something switching to a partial allocation would not address.
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In an August letter to Iowa Democrat Rep. Dave Loebsack, the EPA acknowledged publicly the number of waiver applications received and granted dating back to the 2015 compliance year. Fuher said letter doesn’t address qualification criteria, so stakeholders “don’t necessarily know what’s used to make those determinations.”
Growth Energy CEO Emily Skor told reporters the group continues to hear feedback that Wheeler’s approach to waiver allocation will more closely resemble that of Pruitt rather than the Obama administration, citing court decisions as a driving factor.
“Our concern is two-fold: who is getting these exemptions, and should they be getting these exemptions,” Skor said. “Regardless, by statute you should be reallocating the gallons.”
Energy sector groups disagree with the calls for reallocation, saying it would introduce an undue burden on already compliant companies.
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