Perdue memo shows options to boost ethanol following SRE outrage

By Erin Voegele | August 22, 2019

An emailed memo dated Aug. 20 from Agriculture Secretary Sonny Perdue obtained by Ethanol Producer Magazine outlines several actions federal officials are considering in response to backlash over the U.S. EPA’s Aug. 9 approval of 31 small refinery exemptions (SREs) 

The memo was issued by Agriculture Secretary Sonny Perdue to U.S. EPA Administrator Andrew Wheeler, Energy Secretary Rick Perry, U.S. Ambassador to China Terry Branstad and several others. It references the Aug. 19 meeting held at the White House during which biofuels were discussed.

“Following yesterday’s Oval Office discussion on biofuels, you asked us to develop a list of actions the administration could take to assist the biofuel industry and help regain the support of famers and the biofuel industry,” Perdue wrote in the memo, which contains a list of five possible actions. According to the memo, Perdue, Wheeler, Perry and Branstad agreed to four of the five actions during a follow-up call after the Oval Office meeting

Under the first action, the EPA would rescind seven or eight of the SREs approved Aug. 9 that went to “big” companies.

Under another action outlined in the memo, the EPA would expeditiously take steps to allow E10 pumps to be approved for E15.

Under a third action, the EPA would take necessary actions to encourage and facilitate flex-fuel vehicles (FFVs) that can use E85. This would include immediately publishing FFV F-Factor guidance for automakers, updating the “R-factor” used in CAFE compliance, and including alternative compliance credits based on the demonstrated use of alternative fuels in FFVs in the final CAFE rules for 2021-2026.

Under a fourth action, EPA and USDA would work together to “’fix’ major problems” in the proposed Renewable Fuel Standard reset rule that the memo said are “negative toward biofuels and contrary to your stated support of the RFS.” The EPA delivered its proposed RFS reset rule to the White House Office of Management and Budget on May 20. It is still under review and has not been released publically.

The memo also includes a fifth action that Perdue said has not been agreed upon by EPA and is the subject of further discussion between EPA and USDA. Under that action, the EPA would redistribute on a prospective basis a reasonable number of gallons associated with projected SREs, beginning with the final rule to set 2020 RFS standards.

In the memo, Perdue also said he would like to explore with EPA and DOE programs that would assist with infrastructure build-out for E15. Perdue also expresses regret for not calling President Trump after he learned EPA was moving forward with approval of the 31 SREs to inform him about what a negative action the waivers would have on farmers and the biofuel industry. “By taking decisive action now on the actions outlined above, I believe we can regain support among farmers and the biofuel industry,” Perdue wrote.

Trump was reportedly set to meet with Perdue and Wheeler at the White House today to discuss these issues.