Senators urge Trump to protect RFS, reject waiver requests

By Erin Voegele | May 07, 2020

A bipartisan group of 24 senators sent a letter to President Trump on May 7 urging him to uphold the Renewable Fuel Standard and immediately reject the RFS waiver requests filed with the U.S. EPA by several oil state governors last month.

“Across our states, biofuels lower fuel prices, create hundreds of thousands of jobs in the new energy economy, many of which are in rural areas, provide an important market for farmers, cut our reliance on foreign oil, reduce emissions and harmful air pollutants, and provide critical inputs to our food supply,” the senators wrote.

The senators stress that the U.S. is facing unprecedented challenges due to the COVID-19 pandemic. “Waiving the RFS would cause further harm to the U.S. economy, especially our most vulnerable rural communities,” they wrote. “It would also exacerbate the effects experienced by the biofuel sector as a result of COVID-19, causing far-reaching detrimental impacts on employment, farmers, food security, fuel prices, and the environment. The resiliency of America’s renewable fuel industry has already suffered as a result of the EPA’s drastic expansion of the small refinery waiver program in recent years.”

The letter notes that more than 70 ethanol plants have been idled due to falling liquid fuel demand and another 70 facilities have reduced production. As a result, approximately half of total U.S. ethanol production capacity is currently offline. “Highly skilled jobs across the country are being lost at an alarming rate,” the senators said.

“Biofuel plant closures have ripple effects through the U.S. economy,” they continued. “Farm income is directly linked to the health of the renewable fuel industry. Plant shutdowns are causing commercial CO2 supply shortages and inhibiting the ability of meatpackers and other food sectors to refrigerate, preserve, and supply food and beverages at current, affordable rates. Ethanol plants also produce low cost, high-protein animal feed (distillers grains). Supply shortages as a result of biofuel plant closures are impacting livestock feed procurement, rations, and prices.”

The senators call the recent requests for a waiver of 2020 RFS volume obligations “unjustified” and stress they “clearly do not satisfy the rigorous requirements necessary for EPA consideration.”

“RFS waivers can only be granted by EPA if there is a demonstration of “severe harm” to the economy or environment of a state, region or the United States that is directly caused by the RFS,” they continued. “None of these standards are met today…”

The senators explain that challenging market conditions in the oil sector are being caused by oversupply from international competitors and falling fuel demand from COVID-19, not by factors caused by the RFS. They also point out that the RFS already accommodates demand reductions and provides flexibility to reflect the reality of motor fuel demand. “EPA translates the annual RFS requirements into a percentage share of gasoline and diesel,” the senators wrote. “Thus, the existing structure of the RFS regulations already results in an oil refiner’s renewable volume obligations being proportionally reduced if overall motor fuel demand drops over the year.” In addition, the senators explain that the EPA has repeatedly found that renewable identification number (RIN) prices do not negatively impact refiners.

“We urge you to direct the EPA to reject all calls to waive the RFS,” the senators concluded. “The RFS is more important now than ever as farmers, the biofuel sector, and rural America struggle to remain operating amid the COVID-19 crisis.”

The letter is signed by Sens. Tina Smith, D-Minn.; Joni Ernst, R-Iowa; Debbie Stabenow, D-Mich.; Charles Grassley, R-Iowa; Gary Peters, D-Mich.; Roy Blunt, R-Mo.; Richard J. Durbin, D-Ill.; Deb Fischer, R-Neb.; Tammy Duckworth, D-Ill.; Josh Hawley, R-Mo.; Jeanne Shaheen, D-N.H.; M. Michael Rounds, R-S.D.; Sheldon Whitehouse, D-R.I.; Ben Sasse, R-Neb.; Ron Wyden, D-Ore.; John Thune, R-S.D.; Jack Reed, D-R.I.; Jerry Moran, R-Kan.; Maria Cantwell, D-Wash.; Tammy Baldwin, D-Wisc.; Any Klobuchar, D-Minn.; Mazie K. Hirono, D-Hawaii; Sherrod Brown, D-Ohio; and Patty Murray, D-Wash.

Growth Energy has applauded the senators for rejecting an attack on U.S. biofuels. “We’re grateful to our champions who are standing shoulder to shoulder with rural communities confronting a wave of biofuel plant closures, farm bankruptcies, and demand destruction amid the COVID-19 pandemic,” said Emily Skor, CEO of Growth Energy. “The oil industry’s transparent attempts to capitalize on the current health crisis to steal markets from farmers and biofuel producers threatens to dash hopes of an economic recovery in America’s farm belt.  Our lawmakers and governors have made it clear that any move to further weaken biofuel markets is a non-starter, and we urge the administration to swiftly reject oil-backed attacks on the RFS.

“Now, more than ever, we need leaders to stand up for rural America and deliver the urgent relief our industry needs to protect biofuel jobs and their vital role in the agricultural supply chain—from producing animal feed for livestock operations to carbon dioxide for meatpackers and municipal water treatment,” Skor continued.

The Renewable Fuels Association has thanked the senators for defending the RFS. “We applaud these senators for fighting to protect the livelihood of American farmers and the 350,000 jobs supported by the U.S. ethanol industry," said Geoff Cooper, president and CEO of the RFA. "We join these leaders in asking the administration to stand up for the Renewable Fuel Standard, which has promoted energy diversity, strengthened the heartland’s economy, reduced emissions, and lowered consumer fuel costs for a decade and a half. These senators recognize that recent waiver requests are nothing more than a shameless attempt by oil refiners to seize on a global public health crisis to advance their long-standing political agenda. Now is not the time to abandon this vital policy, especially when so many jobs are on the line in the midst of an unprecedented economic crisis. We are truly grateful that these senators understand that.”

Cooper noted that, as of Wednesday, roughly half of the ethanol industry’s production capacity remained offline, and nearly three-quarters of the nation’s ethanol plants were fully idled or had greatly reduced output rates.

“Ethanol plant closures don’t just affect our nation’s fuel supply; they also affect the supply of other critical products made by the industry, such as high-protein feed for livestock and poultry producers and captured carbon dioxide, which is an important product for food and beverage processing and other industries,” Cooper added. “Shutting down, or even slowing down, our diverse product line has significant ripple effects throughout the entire U.S. economy.”

A full copy of the letter can be downloaded from Grassley’s website.