King, Colleagues Urge EPA to Uphold RFS with Rule Ensuring 15 Billion Gallons Are Blended into Fuel Supply
Congressman Steve King, a member of the Congressional Biofuel Caucus, releases the text of a letter he signed that has been sent to members of the interagency panel producing the final rule regarding the EPA’s October 15, 2019 announcement of the Supplemental Notice of Proposed Rulemaking on the Renewable Fuel Standard (RFS) Program and standards for 2020 and biomass-based diesel volume for 2021. The letter was circulated by Rep. Rodney Davis and Rep. Roger Marshall, and it includes 19 Members of Congress as signatories. It may be seen at this link.
The letter requests that the EPA “issue a final rule that ultimately ensures that a minimum of 15 billion gallons are blended into the nation’s fuel supply starting in 2020.” In addition, the letter asks the EPA to propose a fix in the final rule that will more accurately capture the number of gallons that will be lost should waivers be granted in the future. The proposed fix would require the EPA to consider the actual gallons waived when doing Renewable Volume Obligation calculations, in place of a projected number provided by the agency that frequently underestimates the harm done by waivers.
“The EPA’s use of small refinery exemptions (SRE) to undercut the RFS has resulted in a crisis in the corn belt, and the agency must now act to produce a final rule that will preserve and protect the RFS’s volume requirements,” said King. “To do this, the final rule must provide for at least 15 billion gallons to be blended into the fuel supply beginning next year, and it must ensure that the EPA accurately accounts for future waived gallons. This letter tells the EPA how to fix the problem they have created, and it’s signatories are united in support of protecting the integrity of the RFS.”
Protecting the integrity of the RFS from the damage caused by SRE’s is a major priority for Congressman King. King introduced two bills in June (HR 3410 and HR 3411) that seek to address this problem. HR 3410 requires that there be no net reduction in RFS volume obligations. HR 3411 contains a retroactive “recapture provision” that seeks to recapture volumes lost due to waivers from 2006-2018 by adding those previously lost gallons to future year RFS obligations.
The text of the letter follows:
December 13, 2019
The Honorable Mick Mulvaney
The White House Office of Management and Budget
725 17th Street, NW
Washington, D.C. 20503
The Honorable Lawrence Kudlow
National Economic Council
Room 235, Eisenhower Executive Office Building
Washington, D.C. 20502
The Honorable Andrew Wheeler
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, D.C. 20460
The Honorable Sonny Perdue
U.S. Department of Agriculture
1400 Independence Avenue, SW
Washington, D.C. 20250
The Honorable Dan Brouillette
U.S. Department of Energy
1000 Independence Avenue, SW
Washington, D.C. 20585
Dear Director Mulvaney, Director Kudlow, Administrator Wheeler, Secretary Brouillette and Secretary Perdue:
As you work together through the interagency review process to promulgate a final rule regarding the Environmental Protection Agency’s (EPA) October 15, 2019 announcement of the Supplemental Notice of Proposed Rulemaking on the Renewable Fuel Standard (RFS) Program and standards for 2020 and biomass-based diesel volume for 2021, we urge you to issue a final rule that ultimately ensures that a minimum of 15 billion gallons are blended into the nation’s fuel supply starting in 2020. Additionally, we urge you to ensure that a proper fix applies for all future years so that this situation never occurs again.
The EPA’s May 2019 announcement to allow for year-round sales of E15 came as welcome news, but to see the full benefit, the integrity of the RFS must be upheld. Since 2016 there have been as many as 35 waivers issued in any given compliance year, and altogether there have been 85 small refinery exemptions issued in the past three years. These exemptions have obstructed the demand of nearly 4 billion gallons of biofuels and devastated our local farm economies. To date, none of the gallons lost to small refinery exemptions have been reobligated, only to the detriment of our farmers.
Currently the Renewable Volumes Obligation calculation factors in the estimated number of small refinery exemptions that will be granted, however the EPA consistently uses zero as the projected number despite history proving this method to be unrealistic. For the Renewable Fuel Standard to function as intended, this must be addressed. The purpose of these exemptions is to provide, on a temporary basis, a true small refinery from suffering disproportionate economic hardship. Unfortunately, these waivers have just shifted the burden of any perceived economic hardship onto our farmers.
The EPA’s proposed rule, as written, does not protect the RFS from future waivers that may be granted. When projecting future waivers to account for waived gallons, the EPA must base its projection on the history of actual gallons waived. It is inaccurate for EPA to project waivers based on the ignored recommendations from the Department of Energy (DOE), particularly when the Department has often only recommended half the number of waivers of that EPA has actually granted.
Specifically, we request that you amend the proposed definitions for the terms used in calculating the annual volume percentage standards to require that the projections for volumes of gasoline and diesel that will be exempt from biofuels blending are 1) based on an average of actual exemptions granted from the prior three compliance years and 2) included in the annual percentage standards, regardless of whether the exemptions have been adjudicated by the time of the final volume rule.
We ask that you consider the history and purpose of small refinery exemptions and take appropriate action to mitigate the history of abuse and damages that these waivers have caused, and as a result, have endangered the livelihood of our local farmers and producers. It is our job as individuals who make and carry out the law to follow it in a manner that is fair, consistent and reliable, lending to certainty via stable markets and a consistent regulatory process.
As you work through this review process and move to implement any final rule, it must ensure that a minimum of 15 billion gallons are blended into the nation’s fuel supply and ensure that a fix applies to all future years. We urge you to work together to keep the promise made to our farmers by correcting this issue and upholding your commitment to the RFS.