Viewing a thread - My solution for the Illegal Rin Waivers. Part 1 History.

The Renewable Fuels Standard is the Law of the Land passed by Congress in 2005 and signed by President George W Bush a former Texas Oilman.
In 2005, Energy prices were exploding due to a couple of factors:

1) The US was involved in a protracted war in Iraq despite expectations that prices would fall.. Instead they went up when the US invaded Iraq for the 2nd time in 2003.

IRAQ: Climbing Oil Prices Reflect the Price of War

https://corpwatch.org/article/iraq-climbing-oil-prices-reflect-price-war

No one is likely to have been as stunned as the Bush administration policymakers who glibly promised post-invasion prosperity for the country "floating on a sea of oil."

The steady summertime creep of oil prices past $40 per barrel and over an unprecedented $45 surprised most oil analysts, including this one, who were expecting the price to drop after the US-led invasion of Iraq. But no one is likely to have been as stunned as the Bush administration policymakers, like Deputy Secretary of Defense Paul Wolfowitz, who glibly promised post-invasion prosperity for the country "floating on a sea of oil."

Instead, over a year after the end of "major combat," insurgents regularly attack pipelines, ports and foreign ships, preventing Iraq from exporting all the oil it can produce. At home, the White House faces Democratic and public pressure to release oil from the Strategic Petroleum Reserve in order to lower gas prices-a move for which candidate George W. Bush castigated the Clinton administration in 2000. Most galling of all to the neo-conservatives must be that higher oil prices, among other factors, have helped political elites in Saudi Arabia, Iran and the Gulf petro-princedoms, once on the regime change wish list, to tighten their grip on power.

2) Hurricanes Katrina followed a month later by Rita devastated the US Gulf of Mexico Petroleum infrastructure.

https://www.nola.com/news/article_c0d0ad61-b859-51c6-b4e2-5b78752bca44.html

According to government data, Katrina destroyed 46 platforms and damaged 100 pipelines in August 2005. Massive waves sunk entire platforms and snapped seabed anchors. Hurricane Rita dealt a second blow less than a month later.

Back then, the industry prepared for a "100-year storm," Steinmetz said, which has a 1 percent chance of hitting in any given year. Storm surge from Katrina was that of a much stronger 400-year storm when it hit the Mississippi coast.

"Katrina and Rita redefined what the 100-year storm was," Steinmetz said. "It redefined what a storm could do."

Federal regulators and the oil and gas industry are quick to note no lives were lost or major spills reported offshore during Katrina despite the destruction. Environmental groups continue to challenge the spill claim, saying it airbrushes the impact of hundreds of smaller recorded spills.

Renewable Fuel Standard

The Renewable Fuel Standard (RFS) is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels.

The RFS originated with the Energy Policy Act of 2005 and was expanded and extended by the Energy Independence and Security Act of 2007 (EISA). The RFS requires renewable fuel to be blended into transportation fuel in increasing amounts each year, escalating to 36 billion gallons by 2022. Each renewable fuel category in the RFS program must emit lower levels of greenhouse gases (GHGs) relative to the petroleum fuel it replaces.

RFS Requirements

The U.S. Environmental Protection Agency (EPA) administers the RFS program and establishes the volume requirements for each category based on EISA-legislated volumes and fuel availability. EPA tracks compliance through the Renewable Identification Number (RIN) system, which assigns a RIN to each gallon of renewable fuel.

Entities regulated by RFS include oil refiners and gasoline and diesel importers. The volumes required of each obligated party are based on a percentage of its petroleum product sales. Obligated parties can meet their renewable volume obligations (RVOs) by either selling required biofuels volumes or purchasing RINs from parties that exceed their requirements. Failure to meet requirements results in a significant fine. Details of the program are available on EPA's RFS website.

For the Next Decade the RFS was implemented as the Law Stated until Scott Pruitt was appointed to the EPA Head by the Trump administration. Pruitt started to issue Waivers without cause..

OMAHA (DTN ) -- In 2017, an EPA staff member warned then EPA Administrator Scott Pruitt not to change course on granting small-refinery waivers, but Pruitt ignored that advice, according to new documents released through the Freedom of Information Act request and posted to the FOIA website.

In an email to EPA communications staff on July 31, 2017, now former EPA adviser David Schnare said he urged Pruitt to tread carefully on the waivers issue -- only to see Pruitt overrule him.

"I advised him on the agency's options and he rejected them all," Schnare wrote. "Mr. Pruitt then ordered a different course of action, one I firmly believe is not permitted under law."

Since 2016, the EPA has approved nearly all of the waiver applications it received. In total, an estimated 2.61 billion ethanol-equivalent gallons were not blended in gasoline as a result of the waivers, according to EPA's own estimates.

Schnare talked about a March 8, 2017, daily morning senior staff meeting during which he advised Pruitt on the waivers issue.

"The small-refiner renewable fuels exemptions were a 'sensitive issue,' in part because of Mr. Pruitt's long-standing campaign support from the refinery industry," Schnare wrote, "and, because the requests for exemption from the standard for four of the 11 small refineries were clearly without merit, granting those exemptions would have two adverse effects."

Schnare said the agency has "no discretion" if a small refiner does not meet the "statutory and regulatory" criteria for an exemption.

"To grant the exemptions would be a clear violation of Mr. Pruitt's oath of office," Schnare wrote. "Second, granting improper exemptions would look like a quid pro quo to the refinery industry -- something that could only harm the reputation of both the agency and Mr. Pruitt.

"When I raised the RFS issue during the March 8 (2017 ) meeting, Mr. Pruitt instantly rejected the staff's intent to deny the exemptions. I suggested he would benefit from a briefing on the issue. He said, 'Well then, brief me.' I handed him a five-page brief that I had distributed to senior staff the previous day. He read the top page and then indicated he was not going to deny the exemptions. I then suggested that we could change the exemption criteria in order to carry out his intent. Mr. Pruitt instantly rejected that idea stating, 'We aren't going to do that. It would take 18 months.'"

EPA issued RFS exemptions against DOE advice

Contrary to assertions by the Environmental Protection Agency, the U.S. Department of Energy (DOE) confirmed in a letter to Sen. Chuck Grassley (R., Iowa) that EPA issued so-called “economic hardship” exemptions under the Renewable Fuel Standard (RFS) to small refineries, often owned by billion-dollar oil companies, even when DOE found that the refineries faced little or no actual “hardship.”

In a response to an April 10 letter from Grassley, Energy Secretary Rick Perry outlined the role DOE played in the issuance of these waivers and indicated that EPA had, on at least one occasion, issued an exemption when the department recommended no exemption and ignored recommendations to grant only partial exemptions in other cases. Perry also indicated that the agency has not changed how these analyses are applied or scored from the prior Administration.
...

Report Says Icahn Refinery Received RFS Waiver

Reuters published an exclusive report today citing two anonymous sources who claim EPA granted a small refinery hardship exemption to CVR Energy, owned by billionaire Carl Icahn, the power behind last year’s attempt to dilute the Renewable Fuel Standard by changing the point of obligation.

CVR Energy just released its 1st quarter earnings last Thursday, posting a net income of $66 million, compared to $22 million in the first quarter of 2017. CVR CEO Dave Lamp credited the increase to “a reduction to CVR Refining’s estimated Renewable Volume Obligation and lower Renewable Identification Number prices.”

The company’s Coffeyville, Kansas refinery has a capacity of 132,000 barrels per calendar day (bpcd ) and the Wynnewood, Oklahoma has a 74,500 bpcd capacity – just under the 75,000 barrel cut off for a “small refinery” under the EPA’s definition.

During a House Energy subcommittee hearing last week, EPA administrator Scott Pruitt was asked directly by Maryland Democrat Rep. John Sarbanes if Carl Icahn’s CVR Energy had applied for a waiver. Pruitt replied that he was “not sure” and did not directly answer whether the company might have received one, saying “These exemptions are governed by statute…” before being interrupted by Sarbanes saying, “You’re going to find that out for us..because it raises serious questions about conflicts of interest.”

Iowa Gov. Kim Reynolds and Iowa Secretary of Agriculture Mike Naig asked EPA Administrator Andrew Wheeler to reallocate ethanol gallons lost to small-refinery waivers to the Renewable Fuel Standard and to increase transparency in the program, in a letter sent to Wheeler on Wednesday.

As President Donald Trump's administration reportedly considers its options in response to a rural backlash to Trump ordering the approval of 31 new waivers for 2018, POET announced this week it is idling production at a 92-million-gallon ethanol plant in Indiana and has cut production at half of its 28 plants.

In addition, there are calls for an investigation into EPA's change of course in issuing waivers under the Trump administration. Since 2016, Trump's EPA has granted 85 small-refinery waivers totaling 4.03 billion ethanol-equivalent gallons not blended with gasoline.

In the letter to Wheeler, https://governor.iowa.gov/…, Reynolds and Naig said the latest round of waivers issued was a "clear violation of the president's commitments to Iowa farmers and renewable energy producers across the Heartland."

They said in the letter the "damage from these exemptions has piled up year after year and gallon after gallon. Over the last three years, the agency has undercut more than 4 billion gallons of homegrown energy, without transparency or accountability, even for so-called small-refinery exemptions offered to oil giants like Exxon and Chevron."

The letter said the loss of the ethanol markets has "taken a devastating toll on rural families facing one of the toughest years on record. Ethanol consumption fell for the first time in 20 years, commodity markets are depressed, and many biofuel plants, including several in Iowa, have already slowed or halted production."

Though required by law to do so, the EPA has not reallocated waived gallons to other obligated parties to the RFS since at least 2016.

"We understand the agency is also working on a draft reset of the RFS, which could emerge any time this year," the letter said. "That rule will ultimately raise or lower the bar for growth in homegrown energy for 2021 and all future years. This could block pathways for the adoption of advanced and cellulosic biofuels that transform farm waste into new rural revenue streams.

"To date, EPA has offered no assurances that the reset will address Iowa's concerns on exemptions or long-term growth. That's unacceptable. The EPA must repair the damage, reallocate lost gallons, and deliver on the economic opportunities President Trump promised to families in America's heartland.

"We call on the EPA to bring transparency to the small-refinery waiver exemption process and to immediately reallocate the gallons that have been lost due to the waivers that have already been granted. We extend an open invitation to join us in Iowa soon to see firsthand the devastating impact these exemptions are having on farm families, biofuels producers and rural communities."

POET To Idle Plants In Response To EPA Waivers

On Tuesday POET announced it will idle production at its bioprocessing facility in Cloverdale, IN because of the Small Refinery Exemptions (SREs ) the EPA issued earlier this month. POET officials say the process to idle the plant will take several weeks, after which the plant will cease processing over 30 million bu. of corn annually.

While it’s unclear what level of demand destruction this will create in the short term, AgriTalk host Chip Flory says the situation could have been avoided entirely if the EPA was following the law.

“The action by POET to idle plants in reaction to the SREs is unbelievably unfortunate and would be unnecessary if EPA would be following the letter of the law of the RFS,” Flory says.
...
The EPA can issue SREs under the RFS, however, the law states when they do they’re required to reallocate the blending obligations to other obligated parties. The problem? They’re not doing that.

“That’s where the problem is with the EPA’s interpretation of the RFS,” he said. “This is really frustrating and really unfortunate.”

POET Chairman and CEO, Jeff Broin said in a press release the ethanol industry invested billions of dollars based on the belief that oil interests could not restrict access to the market and EPA would stand behind the intent of the RFS.

“Unfortunately, the oil industry is manipulating the EPA and is now using the RFS to destroy demand for biofuels, reducing the price of commodities and gutting rural economies in the process,” he said.

Two months ago, Mike Jerke was standing next to President Donald Trump at Southwest Iowa Renewable Energy as the president championed year-round E15. On Wednesday, Jerke, CEO of the 130-million-gallon ethanol plant, was standing next to a congresswoman calling for a federal investigation into EPA's 31 new small-refinery waivers. Trump had promised to preserve and protect the Renewable Fuels Standard, Jerke said.

On Tuesday, EPA stated to Reuters there "is zero evidence" that granting small-refinery exemptions "has had any negative impact on domestic corn ethanol producers," Reuters reported, quoting an email from an EPA spokesman.

Jerke said EPA's 31 waivers would translate into 300 million bushels of lost corn demand. He added that the EPA's unchecked use of small-refinery waivers "guts the RFS and breaks the president's promise."

The Aug. 9 waiver announcement, the China trade war and USDA's Aug. 12 crop report have combined to take potentially $10.6 billion of wealth from farmers and ethanol plants and transferred it to oil companies, Jerke said.

Rep. Cindy Axne, D-Iowa, on Wednesday called on the Environmental Protection Agency's Inspector General to investigate EPA's rationale for granting the small-refinery waivers. Axne said EPA's actions "eliminated millions of gallons of ethanol that had been obligated to sell."

Iowa Gov. Kim Reynolds and Iowa Secretary of Agriculture Mike Naig sent a letter to EPA Administrator Andrew Wheeler on Wednesday asking him to reallocate ethanol gallons lost to small-refinery waivers to the Renewable Fuel Standard and to increase transparency in the program.

As the president reportedly considers options in response to a rural backlash to Trump ordering the approval of 31 new waivers for 2018, Reynolds and Naig said the latest round of waivers was a "clear violation of the president's commitments to Iowa farmers and renewable energy producers across the Heartland."

That brings us up to date.

My solution for the Illegal Rin Waivers. Part 1 History.	View previous thread :: View next thread
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IRAQ: Climbing Oil Prices Reflect the Price of War

Renewable Fuel Standard

RFS Requirements

Pruitt Advised Not to Issue Exemptions

Adviser Warned Pruitt of 'Appearance of Quid Pro Quo' on Small-Refinery Waivers

EPA issued RFS exemptions against DOE advice

Report Says Icahn Refinery Received RFS Waiver

Reynolds, Naig Call on Wheeler to Reallocate Waived Ethanol Gallons

POET To Idle Plants In Response To EPA Waivers

Calls to Investigate EPA

Iowans Push Back on Small-Refinery Waivers, Demand-Destructive Policies