EPA Faces Lawsuit Over Refinery Waivers That Sparked Ire Of Ethanol Groups

May 31, 2018

The Environmental Protection Agency is getting heat from farm country, where pro-ethanol groups filed suit against the federal agency Tuesday over renewable fuel exemptions, calling it “abuses of … authority.”

The lawsuit, filed by the National Farmers Union, National Corn Growers Association, Renewable Fuels Association and American Coalition for Ethanol, alleges the EPA unnecessarily allowed three refineries to ignore renewable fuel requirements.

NFU President Roger Johnson said in a news release that it has “significantly cut demand for biofuels grown and produced by American family farmers and their communities,” and that the “success of the law” depends on the mandate.

The Renewable Fuel Standard, or RFS, requires renewable fuels like ethanol to be blended into transportation fuels. That benefits corn growers and ethanol production in rural areas like the Midwest, but adds costs for refineries, which have to buy the renewable fuel. The EPA has the authority to waive RFS standards for small refineries or for those who can prove it’s a “disproportionate economic hardship.”

The pro-ethanol groups suing the EPA argue hree refineries in Oklahoma, Wyoming and Utah that got the waiver shouldn’t have because their parent companies are profitable.

The one in Oklahoma is owned by CVR Energy Inc., which netted more than $66 million in the first quarter of this year. The other refineries are owned by Fortune 500 company HollyFrontier Corp, which netted more than $200 million in the same time frame, partially thanks to RFS waivers.

“These companies are doing well, so it raised a lot of questions,” according to Kathy Bergren, the director of public policy for the National Corn Growers Association.

However, HollyFrontier has argued in a public statement that its refineries did qualify for the waiver, even if the company that owns them is profitable; the Woods Cross refinery in Utah had a fire in March, decreasing its output.

EPA Administrator Scott Pruitt has handed out more waivers than other administrations. He also has close ties to the oil and gas industry, especially from his time in Oklahoma. The industry has been lobbying for a change to the RFS, saying it has outlived its original purpose of boosting domestic fuel supplies.

“Since the inception of the ethanol mandate a decade ago, the United States has undergone an energy transformation from a nation of energy dependence and scarcity to one of energy security and abundance,” the American Petroleum Association said on its website. “It is well past time to reform outdated energy policies to reflect the energy realities of today and tomorrow.”

And Reuters reported this week  that the EPA is granting waivers it believes were wrongfully denied during the Obama administration.

Bergren said media reports on the EPA’s waivers spurred discussion between members of the pro-ethanol groups, which hope their lawsuit will shed more light on the agency’s decisions.

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