As corn farmers and ethanol industry leaders wait anxiously for more clarity from EPA on the small refinery exemption requests currently being considered by the agency, an ethanol group is alleging that the agency went against the Department of Energy’s recommendations in previous years.
DOE does the analysis to determine if a hardship waiver is warranted, Jeff Cooper President and the CEO of the Renewable Fuels Association told AgriTalk host Chip Flory.
“They have criteria that they look at to determine whether these small refiners are truly experiencing economic hardship and whether they deserve an exemption or not. Then, DOE sends that analysis along with a recommendation over to EPA,” he explained.
Iowa Senator Chuck Grassley recently reached out to DOE to find out how the process works because EPA administrator Andrew Wheeler and the previous administrator Scott Pruitt have both said multiple times that they must do what DOE recommends, but evidence shows that hasn’t been the case.
“We know, through court documents and the discovery process of a couple of the lawsuits that are ongoing, that isn’t what happened,” Cooper said. “We know that in at least 24 cases, EPA disregarded or ignored the recommendation from DOE, where DOE recommended against granting an exemption and EPA gave a small refinery exemption anyway. Senator Grassley intended to again, try to shine some light on the various aspects of this process. And there's so many dark corners involved here. That it's really hard to know what's going on behind the curtain.”
Those exemptions were given during the Trump administration under former administrator Pruitt, according to Cooper.
“In 48 exemption requests that DOE reviewed, they recommended against granting exactly half, 24 of those,” he explained. “They have this scoring matrix and if they return a score of 0.0, that means, DOE found that there's no evidence of any economic hardship and no reason to grant a waiver. Well, in 24 of those 48 cases, they found 0.0, no evidence of economic hardship and recommended against granting a waiver. And former administrator Pruitt, under the Trump Administration, went ahead and granted those anyway.”
There are currently 40 pending requests with analysis making their way from DOE to EPA for exemptions.
“If those are granted the same way that the 2016 and 17 exemptions were, bar the door, because this market that is ugly now is just going to be completely destroyed,” he said. “We've seen demand destruction occurring over the past year, year and a half because of these exemptions. If we see EPA come out with another round of these things, it's going to be devastating.”
Meanwhile, Administrator Wheeler recently told Reuters that there could be fewer exemptions because renewable identification number certificate prices are so low. In the past, they have been blamed for economic hardship.
“If the major cause of economic hardship is the cost of rents, then they have no justification to give out any exemptions at all for 2018 because we saw the lowest RIN prices we've seen since really the beginning of the RFS program,” Cooper said.