ethanol plant Jim Parkin

Midwest senators get EPA commitment to hold off on RFS changes

EPA Administrator Pruitt promises to uphold spirit of RFS law and backs off threatening proposals.

If you want to make a Midwest senator upset, try to threaten the Renewable Fuels Standard. That was exactly what happened in recent weeks as reports began to surface on what was perceived as several attacks on the biofuels-boosting federal mandate.

EPA recently announced it is considering cuts to the RFS for biodiesel and advanced biofuels. In addition, several news outlets have reported EPA is considering allowing ethanol exports to generate RINs for RFS compliance, which would effectively be a greater than one billion-gallon cut to the 15 billion-gallon conventional RFS target. The public comment period on these proposed actions closed on Thursday, October 19.

Several Midwest senators from biofuels producing states met with EPA Administrator Scott Pruitt Tuesday for an hour in Sen. Chuck Grassley’s, R- Iowa, office in Washington D.C.. Grassley convened the meeting, which came after he earlier discussed the EPA’s about-face on biofuels with President Trump.

Grassley said he was glad Pruitt met with the senators to hear their concerns. “I told Administrator Pruitt that supporting biofuels isn’t just good policy. It’s also what President Trump promised. I reiterated what the President told me personally and what he told Iowans during the campaign, that he’s for biofuels and for a strong RFS.”

Grassley said that message seemed to be well-received by Pruitt. And by Thursday night, Pruitt officially put in writing some of those promises to the senators.

Pruitt’s letter outlined his commitment to establishing final 2018 Renewable Fuel Standard renewable volume obligations at levels equal or greater to those that the agency proposed in July, as well as a commitment to finalize the rule by the Nov. 30 statutory deadline.

The letter was followed after the senators met with Pruitt to express serious concern about a recent EPA proposal that could have significantly reduced renewable volume obligations under the RFS and run contrary to congressional intent and the President’s stated policy on biofuels.            

In the letter, Pruitt also announced EPA will finalize a decision within the next 30 days to deny a change to the point of obligation for compliance with the RFS, the agency will “actively explore” whether it has the legal authority to approve year-round access to E15 and the agency will not take action on a rumored proposal to allow ethanol exports to count towards RFS compliance.

Graslsey said he is glad EPA is backing away from any attempt to change the point of obligation. “Doing so would have financially burdened local retailers and other small businesses across the country,” he said.

Another welcomed promise from Pruitt was his willingness to make E15 available year-round. Renewable Fuels Association President and CEO Bob Dinneen said he looks forward to working with EPA to “secure common sense reform in the regulations that have kept higher octane ethanol fuels from being sold year round.”

Iowa Renewable Fuels Assn. executive director Monte Shaw said the assurances signal that EPA is realigning itself with President Trump’s public stated views on renewable fuels, but simply not making cuts that were already too low is not enough.

“To live up to the letter and spirit of the RFS in the final rule, the EPA must increase levels for biodiesel and cellulosic ethanol from what was proposed in July. Furthermore, IRFA strongly urges EPA to affirm its authority to grant E15 volatility parity. This one step would do more to ease RFS compliance and lower the price of RINs than anything else.”

The National Biodiesel Board also expressed concern that the letter did not commit to raising the 2019 biomass-based diesel volume higher than 2.1 billion gallons as proposed. “We are going to continue to work closely with the EPA and the White House to help them understand that a robust biodiesel industry is what the law requires. We cannot settle for the biomass-based diesel volume remaining flat at 2.1 billion gallons,” said Doug Whitehead, NBB chief operating officer.

EPA’s Notice of Data Availability (NODA) also closed on Thursday. The NODA proposed reductions in the 2018 Renewable Volume Obligations (RVOs) for biodiesel, advanced, and total renewable fuel including a proposal to reduce the biodiesel volume for 2018 by as much as 315 million gallons and the advanced and total renewable biofuels by 473 million gallons. Doing so would reduce the already too low 2018 advanced RVO to 3.77 billion gallons (down from 4.24 billion proposed) and would drop the total renewable fuel volume to 18.77 billion gallons (down from 19.24 billion proposed).

NBB argues that the 2.1 billion gallon volume in EPA’s proposed rule can easily be met.

Growth Energy and Biotechnology Innovation Organization (BIO) filed joint comments with exhibits opposing several of EPA’s proposals. In their comments, Growth Energy and BIO also provided a legal analysis of how EPA’s latest proposed changes to the RFS run contrary to Congress’ goals and purposes in adopting the statute. They contend EPA may not consider RIN costs when assessing their general waiver authority. And EPA has no authority to carry through the reductions in advanced biofuel to total renewable fuel. The National Corn Growers Association also argued volume reductions are inconsistent with the law and with a recent court of appeals ruling.

Grassley added its Pruitt’s duty to follow congressional intent and also make good on President Trump’s pledge to support biofuels. “I’ll oppose any effort to reduce blending levels or undermine the integrity of the RFS. I’m watching this issue closely and plan to hold the Administration accountable,” Grassley said.

Grassley has been a staunch supporter of biofuels and I don’t anticipate he will back down on this fight.

 

 

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