RFS Testifiers Hammer on Waivers

OMAHA  (DTN) -- EPA had not planned to address small-refinery waivers in a public hearing on Wednesday, but farmers and biofuels groups had other ideas as they unloaded on the agency.

EPA is seeking comments on the latest proposed Renewable Fuel Standard volumes, which across the board show increases in nearly every biofuel category. However, testifiers at the hearing in Ypsilanti, Michigan, said the numbers are just window dressing.

EPA waived 2.25 billion gallons of biofuels from the RFS in 2016 and 2017, and is still on the hook for reinstating 500 million gallons to the RFS as a result of a court ruling. In all, the actual corn ethanol gallons blended in 2016 and 2017 fell below the 15-billion-gallon RFS cap.

"We've had a lot of stumbling blocks along the way," said Michigan farmer Don Morse. "EPA has handed out waivers of 2.25 billion gallons. At 1 billion gallons waived, that equals 700,000 acres of corn, the same as all of the corn acres in Michigan.

"EPA does not have unlimited authority to grant waivers retroactively. This is a big deal for us. This RFS is one of the key things to help us make a profit."

The EPA was set to reallocate gallons lost to RFS waivers, but that proposal was pulled within days after a series of meetings and phone calls that then EPA Administrator Scott Pruitt had with lawmakers from oil states and RFS stakeholders.

"The criteria for exemptions must be reasonable and transparent, and any exemptions must be reallocated to the remaining obligated parties," Iowa Republican Gov. Kim Reynolds said. "Correcting the small-refinery exemption excesses need to be in the final rule. Fifteen billion gallons must mean 15 billion gallons."

James D. Carstensen, federal government affairs manager for DuPont, said EPA should reverse course.

"The proposed volumes lack credibility with the waivers expansion," he said. "Struggling farm families cannot sustain another year of lost demand to waivers. Volumes should be reinstated."

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When is this going to get fixed?

We will probably see the results as ethanol plants shut down in this difficult environment later today with the updated weekly numbers..