The recent bankruptcy of an ethanol refinery in Pennsylvania illustrates an ongoing problem with the Renewable Fuel Standard (RFS) according to EPA Administrator Scott Pruitt.
During an interview with Fox News, Pruitt said the RFS impacts the economy and “sometimes in a very difficult way.” He used the Pennsylvania refinery failure as an example. According to ProFarmer’s Washington policy analyst, Jim Wiesemeyer, the cost of renewable identification numbers (RIN) that refiners have to purchase to show compliance with the RFS were among the factors cited during the Pennsylvania refinery’s bankruptcy.
"This is an issue that as we talk with Congress, we need RIN reform, we need RFS reform in this area because it's terribly important to make sure that as we engage in our administration statutes that they are updated since 2006 and 2007 which is the last time this was addressed," Pruitt said. He later added that his agency has an obligation to administer the RFS statute.
“Congress has put into play mandates that a certain percentage of our fuel has ethanol," he explained, noting the U.S. is "producing about 15 billion gallons of ethanol and exporting about 1 billion to 1 billion and a half [gallons]. So, we’re doing very well in the ethanol sector and we're exporting that as well"
This is not the first time Pruitt has talked about the need for RIN reform, Wiesemeyer said, noting his comments to the House Energy and Commerce Committee in December.
"We need to get some accountability in the RIN market,” Pruitt said then. "There is a lot of speculation that goes on with respect to RINs, there are enforcement issues, fraud that occurs... there is a lot to be done to get accountability and reform in the RIN market."
Still, yesterday Pruitt told lawmakers he was hoping to know “soon” whether or not the EPA can take action to allow sales of E15 year-round. In the past, the EPA has said they could not issue a Reid Vapor Pressure, or the tool used to measure the evaporative emissions of fuel, for E15 for the summer months. Meaning, the fuel couldn’t be sold during that time.
Ethanol industry applauds Pruitt’s recent comments on E15.
"American Coalition for Ethanol (ACE) members are grateful Administrator Pruitt is committed to completing the review of EPA's legal authority to provide RVP relief for E15 and higher blends and that he reiterated the agency's interest in how high-octane fuels can meet fuel efficiency standards," ACE CEO Brian Jennings said in a statement.
While biofuels interests welcomed Pruitt's mention of hopefully having guidance soon on E15, it appears they have been unaware of his pre-hearing comments to Fox News on his view that there needs to be RFS and RIN reform as they have been quiet on that front, Wiesemeyer said.