Acting Environmental Protection Agency (EPA) Administrator Andrew Wheeler will testify before the Senate Committee on Environment and Public Works (EPW) on Wednesday. This hearing occurs on the heels of President Trump’s visit to Iowa last week where he said he was “very close” to bringing year-round sales of E15 to the country.
The hearing is an opportunity for the Senate EPW Committee to expand on and measure progress for the President’s recent commitment, as well as question acting administrator Wheeler on issues affecting the biofuels industry, including:
1. Year-Round Sale of Higher Blend Fuels (like E15) Through Reid Vapor Pressure (RVP) Relief:
The President’s reaffirmation of support for E15 year-round is a welcome pledge for consumers, farmers, and the biofuels industry. Allowing year-round sales of higher blend fuels such as E15 means consumers see cheaper, cleaner options at the pump, while farmers have an expanded domestic marketplace and higher domestic demand. We continue to encourage the President and his administration to support farmers and rural Americans by following through on his pledge to allow the year-round sale of higher blend fuels like E15.
2. Reallocation of Lost Biofuels Gallons from Small Refinery Exemptions:
Each year EPA sets a mandated number of biofuel gallons to be blended into the fuel supply, also known as their Renewable Volume Obligation (RVO). However, EPA may also grant exemptions to smaller oil refineries who cannot meet the financial burden of mixing biofuel into the fuel supply on their own. These exemptions, also called Small Refinery Exemptions (SREs), can be detrimental to consumers when granted after EPA sets the amount of biofuel to be blended, as they are not included in EPA’s annual evaluation. Each exemption granted, therefore, means there is less progress made in providing Americans cleaner, cheaper, and higher performance fuel at the pump. Such exemptions also hurt farmers if lost biofuels gallons are not produced elsewhere, lessening domestic demand for grain.
However, with the change in EPA leadership, there is an opportunity for EPA to ensure small refinery exemptions are properly granted and that any lost gallons lost reallocated. We hope that a clear path for the reallocation of potentially billions of lost biofuels gallons is addressed at this week’s hearing.
3. Increased Transparency Around Small Refinery Exemptions:
In addition to reallocation of lost gallons and timely disbursement of exemptions, EPA must improve the transparency around their process for evaluating how they grant SREs. It is becoming clear that these exemptions are being granted to large refiners who are not experiencing the economic difficulties that the exemptions are meant to counteract. We share Iowa Senator Chuck Grassley’s frustration and disappointment in the EPA’s refusal to disclose who they granted Small Refinery Exemptions to in 2017 and the process by which they had evaluated each applicant.
4. Approval of a Pathway for Cellulosic Biofuels:
There are several pending applications for biofuels projects to produce cellulosic biofuels through processes EPA has already deemed within the emissions threshold in the Renewable Fuel Standard (RFS). EPA should approve these applications quickly to unlock the ability of consumers to reap the benefits of cheaper, cleaner options while fueling up. The recent announcement to allow sorghum oil to qualify as a biodiesel feedstock under the RFS was a step in the right direction.
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