Ethanol supporters were certain conditions for them would improve following Environmental Protection Agency (EPA) Administrator Scott Pruitt’s resignation. As Oklahoma’s Attorney General, Pruitt had sued the EPA over the Renewable Fuel Standard (RFS). As EPA Administrator, Pruitt was generally viewed as hostile to the ethanol industry.
One of the biggest sources of contention was that Pruitt granted waivers to a number of refineries that sought relief from their ethanol blending quotas. As stipulated within the Energy Policy Act of 2005, hardship waivers are only offered to the small refineries producing 75,000 barrels a day or less that the EPA says face “disproportionate economic hardship” after reviewing their applications and profiles. Granting hardship waivers to those who need them was part of the original RFS plan.
Granting hardship waivers to those who need them was part of the original RFS plan. However, the ethanol industry argued that the waivers were being granted too liberally, and they were being granted in many cases to huge refiners like Valero.
Following Pruitt’s departure, Andrew Wheeler, who was Pruitt’s second-in-command, took over as EPA Administrator. He furthered angered the ethanol industry by granting a batch of new waivers to refineries that requested them. Iowa Senator Chuck Grassley blasted the decision on Twitter and complained that these “ridiculous RFS waivers” would translate into “nearly a billion bushels of corn demand lost.”
Senator Grassley and other ethanol proponents were angry that EPA is allowing the waivers to reduce the overall blending requirement to below the RFS mandate. They want the RFS requirements to be raised to make up for previous losses due to the waivers.
But according to Dr. Scott H. Irwin, the Laurence J. Norton Chair of Agricultural Marketing at the University of Illinois at Urbana-Champaign, these waivers do not even reduce demand for renewable fuel blends. In a Jan. 16 study, he said: “the data now clearly show that small refinery exemptions (SREs) under the RFS have not reduced physical ethanol use.”
Now, a federal appeals court has denied a renewable fuel group’s attempt to block the EPA from issuing SREs to the Renewable Fuel Standard.
The renewable group, known as the American Biofuel Association (ABFA), claimed that the EPA improperly considered a number of factors in its granting of SREs– an argument that the appeals court dismissed as unsubstantiated.
