Inhofe offers amendment to cap RIN prices, issues letter to EPA

By Erin Voegele | March 05, 2020

Sen. Jim Inhofe, R-Okla., on March 3 filed an amendment to the American Energy Innovation Act that aims to cap renewable identification number (RIN) prices. On the same day, he led a letter to U.S. EPA Administrator Andrew Wheeler urging the agency to continue to issue small refinery exemptions (SREs).

Inhofe’s amendment aims to allow the EPA to sell RINs to obligated parties at a price of 10 cents per RIN. “It is the sense of Congress that the administrator of the Environmental Protection Agency has the existing authority under the Clean Air Act…to issue waiver credits to reduce the burden on obligated parties under the Renewable Fuel Program,” the amendment states. Under the amendment, the EPA administrator would “make available for sale to obligated parties conventional biofuel credits at 10 cents per gallon.” The EPA would be directed to make the credits available for sale at any time and would not limit the number of conventional biofuel credits made available in any calendar year. Revenue from the RIN sales would be appropriated to the Highway Trust Fund.

Also on March 3, Inhofe led a group of senators in sending a letter to Wheeler that urges the EPA not to change its SRE policy.

“It is our understanding that the [EPA] may be considering changes to the [SREs] available under the [RFS],” said the senators in the letter. “It is already our view that EPA’s decision to prospectively reallocate 770 million gallons in potential SREs in the 2020 renewable volume obligation (RVO) was imprudent and misguided. Now, EPA would risk compounding this error by not issuing SREs equal this amount, thereby massively increasing the burden placed on U.S. refineries.”

The senators argue that if the EPA limits SREs in reaction to a new policy or legal decision that any reductions in SREs should be harmonized with precise adjustments in the 2020 RVOs. “Any misalignment between SRE volumes and the RVO would result in skewed markets, higher [RIN] prices, and enhance the likelihood of consequent job losses, business failures, and adverse consumer impacts,” they continued.

If the EPA does change its SRE policy, the senators ask EPA to adjust the 770 million gallons contained in the 2020 ROV that are intended to address potential future SREs and urge the agency to look for other ways to grant relief to small refineries.

“We assume any EPA contemplated adjustments in SREs would be related to the January 2020 decision issued by the Tenth Circuit,” the senators wrote. “However, because the decision is contrary to the statute, we believe EPA must assert a strong appeal.  We expect EPA to do so expeditiously, because the Tenth Circuit’s decision undermines the protections Congress intended to extend to small refineries from the costs of the RFS program.

“Finally, it is long past time to address the problems associated with RIN prices,” the senators continued. “This is the proper policy goal and demonstrates a “win-win” solution that would provide refineries with long-term cost containment and allow U.S. biofuel consumption to grow.  We continue to be in favor of discussions related to achieving these goals. In the meantime, the agency must not sit idly by as RIN prices rise, jobs are put at risk, businesses face viability concerns, and consumers who cannot afford it are hurt at the pump.”

In addition to Inhofe, the letter is signed by Sens. John Barrasso, R-Wyo.; Shelley Moore Capito, R-W.V.; Pat Toomey, R-Pa.; Mike Enzi, R-Wyo.; Ted Cruz, R-Texas, James Lankford, R-Okla.; Mike Crapo, R-Idaho; and Jim Risch, R-Idaho. A full copy of the letter is available on Inhofe’s website.