Senators urge EPA to accurately account for SREs

By Erin Voegele | November 07, 2019

Seven senators representing the Midwestern states of Nebraska, Iowa, South Dakota, Missouri and Indiana have each submitted comments to the U.S. EPA urging the agency to accurately account for small refinery exemptions (SREs) in future Renewable Fuels Association rulemakings.   

The comments, submitted by Sens. Deb Fischer, R-Neb.; Chuck Grassley, R-Iowa; Joni Ernst, R-Iowa; John Thune, R-S.D.; Roy Blunt, R-Mo.; and Mike Braun, R-Ind., addressed the EPA’s supplemental notice of proposed rulemaking that describes the agency’s plan for reallocating lost SRE volumes. While Trump Administration has originally committed to basing the plan on a three-year rolling average of actual SRE waivers, the EPA has instead proposed to use a three-year rolling average of U.S. Department of Energy SRE recommendations. The plan is opposed by the biofuels industry because the EPA has largely ignored DOE recommendations in recent years, approving a significantly higher volume of SRE waivers than recommended by the DOE.

 “Just this week, the CEO of a major oil refinery bragged that small refinery exemptions were ‘a real cash flow that [they] get every year.’ This is at the expense of farmers and biofuel producers. The EPA’s proposed rule fails to ensure that 15 billion gallons of conventional ethanol are actually blended into our nation’s fuel supply. In my letter, I called on Administrator Wheeler to fulfill the president’s commitment and provide certainty for rural America,”  said Fischer, a member of the Senate Agriculture Committee. Read her letter here.

“As the number one producer of corn, ethanol, biodiesel and cellulosic ethanol, the renewable fuels industry is an important sector of Iowa’s economy. It generates nearly $5 billion of Iowa’s GDP, over $2.4 billion in household incomes and supports 47,000 jobs across Iowa. President Trump made a commitment to Iowa and other biofuels producing states, and I look forward to seeing this promise fulfilled. The EPA shouldn’t undercut President Trump’s support of the Renewable Fuels Standard. I urge EPA to adjust the proposed supplemental rule to account for actual waived gallons using hard data from past practice to provide certainty to the marketplace,” said Grassley. Read his letter here.

“Plain and simple, if the market for biofuels does not trust EPA to implement the proposal President Trump negotiated, the market will not make investments in biofuels – a dangerous spiral for Iowa farmers and producers which will only lead to more plants closed and jobs lost in the heartland. It is time again for EPA to get this policy right, respect the President’s intent, and uphold the law as it was written. This means providing certainty that EPA will ensure that 15 billion gallons of ethanol will be blended each year,” said Ernst, member of the Environment and Public Works Committee. Read her letter here

“While I appreciate the administration’s commitment to restore integrity to the RFS and provide that at least 15 billion gallons of conventional biofuels are blended into the fuel supply, the proposed supplemental rule unfortunately lacks safeguards that will assure its intent. As you know, resolution of this matter is of critical importance to agriculture stakeholders in South Dakota and across the country, and I urge EPA to reconsider the incorporation of language to make certain that all gallons waived by SREs will be accounted for in final RVOs.” said Thune. Read his letter here.

“We’re grateful to President Trump for his commitment to assuring 15 billion gallons of ethanol is blended into our fuel supply annually,” said Rounds. “However, the EPA’s proposed rule fails to honor the agreement which the president directed them to formalize. Taking steps to fully restore the integrity of the RFS will honor the agreement as Congress intended.” Read his letter here.

“Missouri farm families have faced a number of challenges over the past year, from catastrophic flooding to market uncertainty and now the EPA’s failure to uphold its commitments to the biofuels industry,” said Sentor Blunt. “Renewable energy policies like the RFS have helped diversify our nation’s fuel supply while creating and sustaining jobs, strengthening local economies, and lowering gas prices. I urge the administration to produce a final rule that addresses the concerns my colleagues and I have raised and supports America’s biofuels producers.”  Read his letter here.

“The state of Indiana is the fifth largest ethanol producing state in the country,” said Braun.  “I urge the EPA to implement the agreement in a way that provides certainty to Hoosier farmers and refiners.” Read his letter here.

Representatives of the biofuels industry have spoken out to thank the senators for their efforts.

“The EPA must honor President Trump’s commitment to fully restore vital markets for American farmers and biofuel workers,” said Emily Skor, CEO of Growth Energy. “We’re deeply grateful to our champions across the heartland who continue to make it clear that we can no longer afford to play regulatory games with EPA while biofuel plants continue to close their doors. We need a real fix based on actual gallons lost, and we need it now.”

“Farmers, ethanol producers and consumers across the country are grateful to these Senators who are standing up for the integrity of the Renewable Fuels Standard,” said Geoff Cooper, president and CEO of the Renewable Fuels Association. “The RFS has been a tremendous success, lowering consumer gasoline costs, providing a critical value-added market for farmers, and reducing carbon emissions from liquid transportation fuels. But then EPA began to systematically undermine the benefits of the program with unprecedented and unnecessary small refinery exemptions (SREs) that have eroded biofuel demand and sacrificed the energy, environmental, and consumer benefits of the program. It’s time for the EPA to simply follow the law. Fifteen billion gallons is supposed to mean at least 15 billion gallons. That’s what the President intended when he directed EPA to fix the SRE problem a month ago. The only path to restore credibility to this process is for the EPA to project SREs based on the actual exemptions granted in the past three years. Anything else is a broken promise that will kill more jobs and keep plants shuttered. We are proud to have these Senators on our side, and we thank them for their leadership.”

“ACE members, farmers and renewable fuel producers value the ongoing leadership of these Senators to help get the RFS back on track by following the rule of law,” said Brian Jennings, CEO of ACE. “These key U.S. Senators and other elected leaders had a deal with President Trump that ensured at least 15 billion gallons of ethanol blending under the RFS beginning in 2020. The deal was based on the promise that EPA would account for the three-year rolling average of actual gallons waived through Small Refinery Exemptions (SREs) from 2016 to 2018. A deal is a deal. We expect EPA to account for actual gallons waived through SREs from 2016 to 2018 to ensure at least 15 billion gallons of ethanol blending beginning in 2020. We’re grateful for these Senators working to see this deal through, and this serves as a reminder that all ethanol advocates should use this comment period as an opportunity to make their voice heard on how this rulemaking personally impacts you, your business, and your community.”

A public comment period on the supplemental notice of proposed rulemaking is open through Nov. 29. Comments can be filed online at www.Regulations.gov under Docket ID No. EPA-HQ-OAR-2019-0136.