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April 18, 2018 5:00 PM, EDT

Corn Belt Senators Ask EPA to Stop Issuing Waivers Exempting Refineries From Biofuel Laws

Daniel Acker/Bloomberg News

Thirteen Corn Belt senators, led by Minnesota Democrat Amy Klobuchar and Iowa Republican Chuck Grassley, have petitioned the U.S. Environmental Protection Agency to stop issuing waivers that exempt certain oil refineries from federal biofuel laws.

The bipartisan group of senators — which includes Minnesota Democrat Tina Smith — also asked EPA to disclose which oil refiners have received the waiver. EPA has traditionally withheld such information.

Under the nation’s Renewable Fuel Standard, oil refineries must blend a certain amount of corn ethanol with gasoline, or buy government-created credits. Smaller refineries — those producing less than 75,000 barrels of oil per day — can apply to EPA for a waiver if blending requirements cause an economic hardship.

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Use of the exemption has grown. Reuters reported recently that EPA has granted an unusually high number of 25 hardship waivers this year since a 2017 court ruling that essentially expanded the program. Reuters, citing unnamed sources, also has reported that large oil companies — including ExxonMobil and Chevron — have applied for waivers for smaller refineries.

Such actions “undermine commitments President Trump made on the Renewable Fuel Standard to our constituents,” said the letter from the bipartisan group of senators.

EPA said in a statement that discontinuing the waivers would be a violation of the RFS.

“EPA doesn’t have the authority to pick and choose which provisions of the RFS to follow,” the statement said. “The agency has been both responsive and open about small-refinery waivers, while being careful not to violate confidential business information protections.”

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The ethanol and oil industries have long battled over the RFS. Ethanol interests said EPA under Trump appointee Scott Pruitt is trying to erode the RFS at the behest of the oil business, and the surge in hardship waivers is a prime example.

“These waivers fall well outside of the letter or spirit of this provision in the law, which sought to provide flexibility for the smallest of U.S. refiners, and only in cases of genuine hardship,” the senators said in their letter.

The senators wrote that the EPA waivers so far could cut biofuel demand by 1.5 billion gallons, or 10% of the amount of ethanol expected to be blended into fuel this year.

Neither of Minnesota’s two oil refineries is small enough to qualify for the EPA biofuel waiver. However, the owner of the refinery in St. Paul Park, Andeavor, won waivers for three of its smaller refineries, including two in North Dakota, Reuters reported earlier this month.

San Antonio-based Andeavor, formerly known as Tesoro, had $1.7 billion in net earnings last year on revenue of $35 billion.

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