Noem, Walz urge EPA to reject RFS waiver request

By Erin Voegele | May 08, 2020

Leaders of the Governors’ Biofuels Coalition sent a letter to U.S. EPA Administrator Andrew Wheeler on May 8 urging the agency to reject a recent request from five oil state governors to waive 2020 Renewable Fuels Standard blending obligations.

“The economic fallout from the coronavirus pandemic has hit every sector of our nation’s economy, not just refineries and oil producers. Before the outbreak, farm income was down over 30 percent compared to 2013 in part because of small refinery waivers which removed 4 billion gallons of biofuels from the market,” said South Dakota Gov. Kristi Noem and Minnesota Gov. Tim Walz, in the letter. “The economic pain was exacerbated by the pandemic which sent commodity markets into a tailspin. Not only have the circumstances had a devastating impact on agricultural producers, it has destroyed the market for biofuel producers, resulting in the idling of approximately 70 ethanol facilities or 46 percent of the industry’s total production capacity. These shutdowns have an enormous impact on the rural communities in which these plants are located.”

Noem and Walz stress that the financial pressure oil refiners are experiencing is the result of COVID-19-related stay-at-home orders and the oil price war between Russia and Saudi Arabia. The RFS is not the cause. “The biofuels industry has not only had to deal with these same market forces, but the industry has also had to cope with EPA’s failure to comply with the Americans for Clean Energy V. EPA ruling, which concluded that EPA illegally waived hundreds of millions of gallons of ethanol due to its regulatory misinterpretation. Granting the requested waiver would only worsen the economic harm that biofuel producers, supporting technology providers, and agricultural producers are experiencing and would do nothing to improve the financial health of the refiners.”

The governors note that waiver petitions must demonstrated that the RFS is the direct cause of severe economic harm. The waiver requests also ignores that the RFS obligations are set as a percentage of the total volume of fossil fuel refiners sell or import into the U.S., they said. This means that lower petroleum demand directly and proportionately reduces the amount of renewable fuel they blend, which Noem and Walz say further weakens claims of hardship.

“Undermining the RFS at a time when rural America is struggling economically, farmers are fighting to stay in business, and the biofuels industry has been impacted by furloughs and plant closures is unconscionable,” Noem and Walz wrote. “We respectfully urge you to reject this request and work with coalition governors to preserve rural jobs and protect our state economies.”

A full copy of the letter can be downloaded from the Governors’ Biofuels Coalition website.