Louisiana Gov. Jeff Landry and Alabama Gov. Kay Ivey have asked EPA to waive the 2027 Renewable Fuel Standard obligations for refiners in their states, arguing the mandate is pushing up what Americans pay for gasoline and diesel. The Renewable Fuels Association says the argument doesn’t hold up, and if granted, those waivers would actually raise gas prices, now lower them.
In an interview with U.S. Farm Report, Troy Bredenkamp, RFA’s senior vice president of government and public affairs, says EPA should deny the request because the governors’ central claim, that the RFS is driving up gas prices, is “absurdly false on its face.” Wholesale ethanol is $1 per gallon cheaper than wholesale gasoline, he says, so cutting the blending requirement would not bring relief at the pump.
A Familiar Request
This kind of petition is not new. Since 2008, EPA has received nearly two dozen RFS waiver requests from state governors and another 14 from oil refining interests, according to RFA. In each case, the agency denied the request after finding that the RFS does not cause “severe harm” to the economy of the requesting states or the refiners.
States can ask for a waiver over high prices or over a lack of renewable fuel to blend, but Bredenkamp says “neither of those are the case right now.”
He says the price argument fails because ethanol is the cheapest part of the gallon.
“When you look at the price of fuel today, and you look at the wholesale price of ethanol, it is a dollar lower than the wholesale price of gasoline,” Bredenkamp says.
Asking EPA to remove the obligation to blend the lowest-priced component, he says, “is absolutely asinine.” RFA is consulting its legal counsel and plans to make that case to EPA.
Bredenkamp acknowledges that states have a right to bring these requests. But he says the standard is high, and he calls this one “just ridiculous.” He points to refiners’ earnings.
“You have the refiners that are posting near record profits this quarter like they did last quarter,” he says. If the governors want to know why their constituents pay so much at the pump, “they need to talk to the refiners in those two states.”
Small Refiners at the Center
Both states have refining interests, and Bredenkamp says that is no coincidence. He draws a line between large and small refiners. RFA has “a pretty good working relationship” with the large ones, he says, and many of them “have figured out a way to blend renewable fuel” because it adds octane and lowers the carbon intensity of their gallon.
Small refineries, he says, have taken another route.
“The small refineries for some reason over the last 20 years since the creation of the Renewable Fuel Standard have never even tried to figure out a way to meet that obligation through blending,” Bredenkamp says.
Instead, he claims they have relied on the RIN credit market instead.
“They wouldn’t need to do any of that if they just blended the lower-priced component of that gallon.”
If EPA would grant these waiver requests, which RFS is fighting hard to prevent, expects more governors to join.
“They will come from the usual suspects, probably Texas, probably Arkansas, maybe Oklahoma, but it’s going to be in that oil belt,” he says. Landry has publicly called on the governors of Texas, Mississippi and Arkansas to sign on.
What a Waiver Could Mean for Farmers
Bredenkamp says the worst case is a granted waiver that sets off a chain reaction. Blending requirements would be suspended in those two states, and others would follow. “
That would have an additive effect over time. Depending on how long that waiver request is granted, that could have a significant decrease in demand for ethanol and for biodiesel,” says Bredenkamp.
The timing, he says, makes it worse. EPA finalized the highest renewable volume obligations in program history for 2026 and 2027, and he says the market is responding.
“We’re beginning to see the effects of that, especially when you look at the biodiesel market, soy crush, biodiesel production is really starting to ramp up,” Bredenkamp says.
On the ethanol side, production is coming on ahead of year-round E15 and the 2026 and 2027 obligations, and he says a waiver would undercut that demand at a time “when things in rural ag country are not great.”
He points out it would also send a bad political signal.
“It would be a very bad signal for this administration to send to rural America that we’re choosing some friends over our other friends,” Bredenkamp says.
Why the Argument Keeps Landing
Bu there’s a bigger question at hand. After nearly two decades, the claim that the RFS raises prices still resonates with politicians and consumers. But why? Bredenkamp says it baffles him.
“They have a very loud and well-funded megaphone, and it’s better funded than our side, unfortunately,” he says.
RFA’s answer is what consumers see at the pump. The group has collected photos from all 50 states of E15 pumps showing price gaps of 25 to 60 cents per gallon below E10.
“We merely hold those pictures up and we say, who are you going to believe? What the oil companies are telling you, or are you going to believe your own eyes?” Bredenkamp says.
He also makes a supply argument. Renewable fuel production is part of the country’s total refining capacity, he says, and removing the demand that supports it would shrink supply. “That’s going to increase your prices because you’re lowering your supply,” Bredenkamp says.
“That’s an easy one for any economist to understand.”
E15 Still a Possibility in the Lame Duck
On year-round E15 legislation, Bredenkamp says the industry isn’t giving up, though time is short.
“There are pathways, we feel, that could still get E15 over the hump this Congress. They are narrow pathways,” he says.
He says he feels better than he did right after the election, citing bipartisan support and a willingness in Washington to finish the job.
The farm bill looks like the most logical vehicle, he says, with an E15 package already in the underlying Senate bill reported out of the Agriculture Committee. But the lame-duck calendar is crowded with judicial and administrative confirmations, the National Defense Authorization Act, and a spending package to fund the government past December 11. Bredenkamp says he doesn’t see E15 moving on its own.
“If a farm bill package can be agreed to that includes E15, it most likely will ride on a CR that won’t be clean, that will be part of a bigger omnibus-type package,” he says.
Much depends on Democrats, who take control of the House in January. If they want a clean slate, he says, the deal could get done now. If they want to write their own farm bill, “we would see a delay.”
The next week to 10 days could be key.
