Governors of five U.S. states are asking the Trump administration to waive biofuel blending requirements on the basis that complying with the mandates post “severe economic harm” to the economy.
The governors submitted a series of letters to EPA, including Greg Abbott of Texas, Gary Herbert of Utah, Kevin Stitt of Oklahoma and Mark Gordon of Wyoming. Louisiana Governor John Bel Edwards made a similar request on April 7, according to Reuters.
EPA now has 90 days to decide on the matter.
The governors cite a spike in the cost of Renewable Identification Numbers (RINs) – credits refiners can buy to demonstrate compliance with the requirements. They also cited the COVID-19 pandemic as another factor, noting that it has already forced the closure of at least one oil refinery.
RIN prices have nearly doubled this year, a situation driven in part by a decision by the 10th Circuit Court that three small refinery exemptions (SREs) for the 2016 compliance year were invalid. EPA opted to not appeal that ruling, sending RIN prices rising. An appeal by the refiners impacted directly by the decision was also rejected by the court.
Senate Environment and Public Works Committee Chairman John Barrasso, R-Wyo., issued a statement backing the requests. “I fully endorse the governors' request to reduce costly biofuel mandates on America's refineries,” he said. “As the global coronavirus pandemic continues, fuel demand has dropped dramatically. At the same time, compliance costs under the Renewable Fuel Standard have quadrupled since the start of the year. American refineries are now fighting for their lives.”
EPA can waive the RFS requirements, in consultation with the Secretaries of Agriculture and Energy, under certain criteria. The waiver can be issued if the Administrator determines – after a notice and comment period – that implementation of the RFS requirements would severely harm the economy or environment of a state, a region, or the United States.
There have been requests for waivers previously, with the most recent ones taking place in late 2017 and early 2018. EPA has not approved any of the waiver requests previously sought based on information the agency has released on requests since 2008.
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