House Democrats demand answers from EPA on RFS, biofuel waivers

On June 20, 12 Democratic members of the House Energy and Commerce Committee and House Committee on Agriculture asked the U.S. EPA to provide additional information regarding its failed implementation of the Renewable Fuel Standard.

“We are deeply troubled by the lack of transparency and continued manipulation of the RFS program through your misuse of the small refinery exemption process authorized in section 211(o)(9) of the Clean Air Act,” the members said in a letter addressed to EPA Administrator Scott Pruitt.

The representatives stress that EPA is continuing to hurt farmers and undermine the biofuels market by extending waivers to an unusually large number of refineries. “Agricultural communities, especially throughout the Midwest and Southern Plains, are experiencing financial hardship due to low commodity prices and reduced access to foreign markets, resulting from uncertainties in our trade policies,” the letter states. “Additionally, your implementation of the RFS program is undercutting the market for renewable fuels, and inflicting further economic pain in rural communities and throughout the agriculture sector.”

Citing reports that the EPA has granted dozens of small refinery waivers and awarded millions of dollars of renewable identification numbers (RINs) based upon the denial of an extension of a waiver in 2014, the representatives state they “believe EPA has exceeded its authority under the CAA through the retroactive award of [RINs] and by attempting to compensate companies by providing them RINs. Additionally, EPA appears to have further exceeded its authority by issuing RINs that do not represent the production of any actual gallons of biofuels.” The letter specifically cites reports that EPA recently issued millions of dollars of RINs to Sinclair Oil and HollyFrontier on the basis that the two companies did not receive extensions of a waiver in 2014.

The letter stresses that the dramatic increase in hardship among refineries is not credible and notes that the lack of transparency is undermining implementation of the RFS program. “By authorizing these waivers in secret, EPA risks creating significant opportunities for market manipulation, uncertainty for regulated parties, and an opportunity to reduce annual renewable volume obligations (RVOs) in an opaque and arbitrary manner,” the letter states.

At minimum, the representatives say the EPA should publically identify facilities that receive any exemption of its RFS obligations. The agency should also provide summary statistics revealing the total number of gallons of biofuels represented by the exemptions granted within a compliance year. “Withholding this information ensures that only a select few participants have information material to the market for renewable fuels and RINs,” the letter states.

The letter asks the EPA provide the representatives with a variety of specific sets of data relevant to the waivers and RFS program by July 6.

“We remain extremely concerned about your implementation of the RFS program and its effects on rural communities,” the representatives write in the letter. “Your actions are clearly designed to enrich the oil industry at the expense of farmers and the renewable fuels industry by undermining the RFS program. We request that you suspend the small refinery exemption process until you provide Congress with information to evaluate this program.”

The letter was led by Reps. Dave Loebsack, D-Iowa, and Cheri Bustos, D-Illinois. It was also signed by Reps. Paul Tonko, D-New York; Collin Peterson, D-Minnesota.; Bobbly L. Rush, D-Illinois; Anne McLane Kuster, D-New Hampshire; Diana DeGette, D-Colorado; Tim Walz, D-Minnesota; Scott Peters, D-California; Richard M. Nolan, D-Minnesota; John Sarbanes, D-Maryland; and Tom O’Halleran, D-Arizona.

A full copy of the letter can be downloaded from Loebsack’s website.