Government

Waivers wiping out biofuel gains, critics say

EPA under fire for granting too many exemptions to law

The U.S. Environmental Protection Agency proposed Tuesday to boost the use of renewable fuels in 2019, but the biofuels industry mostly wasn’t cheering.

Industry officials said the new targets are being undermined by too many waivers granted to small refineries by the EPA — freeing them from complying — and that pressure from the oil industry caused the agency to back off reallocating those waived volumes to other fuel blenders.

The EPA said it is proposing 19.88 billion gallons of renewable fuels be used in 2019, boosting advanced biofuels to 4.88 billion gallons. Both figures are nearly 600 million gallons higher than the final 2018 figures.

The EPA also proposed raising biomass-based biodiesel to 2.43 billion gallons in 2020, an increase over the 2.1 billion gallons for 2019.

It also proposed raising cellulosic volumes to 381 million gallons, up from 288 million in 2018.

Corn-based ethanol would remain at 15 billion gallons.

The new figures come in the face of fierce criticism from farm state lawmakers and biofuels groups angry the EPA has granted waivers to small refineries.

“This is a status quo proposal for ethanol and the status quo is bad,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. He said the proposal “isn’t worth the paper it’s written on,” given the exemptions.

U.S. Sen. Chuck Grassley, R-Iowa, said that EPA should reconsider and reallocate the waived amounts.

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“Otherwise, Administrator (Scott) Pruitt should let someone else do the job who won’t continue to undermine the president,” he said.

U.S. Sen. Joni Ernst, R-Iowa, called Tuesday’s figures “an uptick” that still doesn’t make up for the volumes lost because of the waivers.

Iowa’s lone Democrat in Congress, Rep. Dave Loebsack, said the EPA’s proposal “does nothing to address the EPA’s demand destruction.”

Industry officials have said the waivers lopped 1.5 billion gallons off the requirement. Grassley said it’s actually 2.25 billion gallons when waivers from 2016 and 2017 are taken into account.

Some industry officials did praise the proposed increase for advanced biofuels.

Grant Kimberley, executive director of the Iowa Biodiesel Board, said the new volumes are “definitely a step in the right direction and sends an encouraging signal to our state’s biodiesel producers and supporting industries.”

However, he also expressed concerns about the waivers.

A Reuters report Tuesday saying some of the waivers were granted over recommendations from the Department of Energy to reject or limit them raised the temperature even more.

Oil refiners have defended the exemptions, saying the Obama administration had improperly rejected previous applications.

The oil industry responded to the EPA’s proposal by renewing its call to overhaul the Renewable Fuel Standard law, which was passed in 2005. The American Petroleum Institute said the law is “backward looking” and ignores strong domestic energy production.

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“By increasing biomass-diesel and the overall biofuels volumes the government is putting its thumb on the scale, picking winners and losers,” the organization said in a statement on its website.

The institute praised the EPA for rejecting the idea of reallocating the volumes it had waived. But the biofuel industry said the decision proved the power of Big Oil.

The Trump administration has faced competing pressures over the fuel law during the last year and a half. Farm state lawmakers have reminded President Donald Trump of his campaign promise to back the law. But Trump also has faced complaints from oil workers, like at a bankrupt Pennsylvania refinery, that they’re being hurt by the law.

In a statement accompanying the proposal Pruitt, said, “I’ve traveled to numerous states and heard firsthand about the importance of the RFS to farmers and local communities across the country.”

He said the new proposal will provide regulatory certainty.

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