The Biobased and Renewable Products Advocacy Group (BRAG) helps members develop and bring to market their innovative biobased and renewable chemical products through insightful policy and regulatory advocacy. BRAG is managed by B&C® Consortia Management, L.L.C., an affiliate of Bergeson & Campbell, P.C.

By Lynn L. Bergeson

On July 5, 2019, EPA Administrator Andrew Wheeler signed a proposed rule to set the minimum amount of renewable fuels that must be supplied to the market in 2020, as well as the biomass-based diesel volume standard for 2021 under the Renewable Fuel Standards (RFS) program. The notice means that EPA is on target to publish the final RFS Renewable Volume Obligations (RVO) on time. In Wheeler’s announcement, he highlights that its timeliness contrasts with the Obama Administration’s failure to release RVOs by the date Congress set forth. Despite Wheeler’s timeliness, however, EPA has been highly criticized by the National Biodiesel Board (NBB) and politicians who have demonstrated opposition to the set RVOs. Details on the proposed RVOs for 2020 can be found here.

Tags: Biofuel, RFS

 

By Lynn L. Bergeson

On June 27, 2019, U.S. Senator John Kennedy (R-LA) submitted a letter to USDA Secretary Sonny Purdue asking him to stop threatening energy jobs in Louisiana. In his letter to Secretary Purdue, Senator Kennedy outlines concerns related to Small Refinery Exemptions (SRE) issued by EPA under the RFS program. Of particular concern to Senator Kennedy are reports that Secretary Purdue continues to attempt to influence EPA decisions on small refinery waivers, despite clear measures in the Clean Air Act that prohibit him to do so. Senator Kennedy states that Secretary Purdue’s “efforts in this matter not only disregard congressional intent of the law, bur also threaten thousands of jobs in Louisiana and across the country.” While emphasizing consistency to statutory requirements, Senator Kennedy also highlights his opposition to EPA’s proposal to increase the total blending requirement in the reset rule or 2020 RVO rule. Arguing that increases of the blending requirements or changes to SRE would affect Renewable Identification Numbers (RIN) prices, and therefore, jobs, Senator Kennedy ends the letter by threatening to block Secretary Purdue’s three USDA nominees awaiting confirmation before the Senate.

Tags: USDA, RFS

 

By Lynn L. Bergeson

On June 28, 2019, 13 U.S. Senators signed a letter to President Donald J. Trump expressing concerns about media reports that USDA Secretary Sonny Purdue is attempting to influence EPA decisions on small refinery waivers under RFS. Similar to the letter submitted to Purdue himself by Senator Kennedy, the 13 Senators express opposition to Secretary Purdue’s involvement in the SRE waivers decision-making process. Also referencing the Clean Air Act and its statutory requirements, the letter urges President Trump to prohibit Secretary Purdue from influencing or interfering with decisions concerning SRE by EPA Administrator Andrew Wheeler. The view expressed in the letter is that “any decisions to further delay, reduce, or deny hardship relief to small refineries, or reallocate the obligations of small refineries to other refineries,” would be the result of Secretary Purdue’s impermissible interference. The letter notes that federal courts would likely view any of the outlined attempts in the same way.

Tags: USDA, RFS, CAA

 

By Lynn L. Bergeson

On June 20, 2019, Reuters reported that President Trump directed members of his Cabinet to review EPA’s expanded use of waivers exempting small refineries from the Renewable Fuel Standard (RFS). This decision came after Trump traveled to the Midwest to promote the Administration’s decision to lift a ban on summer sales of E15 and farmers warned that increases in smaller refinery exemptions functionally negated the expected benefits of E15 sales. RFS has become increasingly controversial as environmental activists argue that the government should phase out incentives for first generation biofuels derived from food biomass like corn ethanol in favor of second and third generation biofuels that use non-food waste and algae to produce biofuels. For now, EPA has delayed action on 39 pending small refinery waivers from 2018, and has said in a statement that the “EPA will continue to work with the White House, USDA, members of Congress and other stakeholders to ensure the Renewable Fuel Standard’s continued stability.”

Tags: RFS

 

By Lynn L. Bergeson

On June 14, 2019, U.S. Senators Deb Fischer (R-NE) and Tammy Duckworth (D-IL) introduced the Renewable Fuel Standard (RFS) Integrity Act of 2019. This Act aims at increasing transparency and predictability to the U.S. Environmental Protection Agency’s (EPA) small refinery exemption process under the RFS program. Requiring small refineries to petition for exemptions by June 1 of each year, according to the two leaders, this legislation would hold EPA accountable for exempted gallons in the annual Renewable Volume Obligation (RVO) it sets every November. It is known that, since 2018, many complaints have been made regarding President Trump’s EPA liberally providing exemptions to refineries with no back-up information or congressional oversight. This Act attempts to address this issue by making key information associated with exemptions made publicly available. Additionally, if passed, the Act would require EPA to report to Congress on the methodology it uses when granting these small refinery exemptions.


 

By Lynn L. Bergeson

On June 3, 2019, the U.S. Government Accountability Office (GAO) released a report to the U.S. Senate on the Renewable Fuel Standard’s (RFS) program effects on gas prices and greenhouse gas (GHG) emissions. Titled Renewable Fuel Standard: Information on Likely Program Effects on Gasoline Prices and Greenhouse Gas Emissions, the report suggests that increases in gas prices outside of the Midwest (which have now diminished) were associated with the nationwide RFS, and that variations in gas prices likely depended on state-by-state transport and storage of ethanol costs. In addition, price increases occurred in states that did not have the initial infrastructure to blend and store ethanol. Regarding GHG emissions, the report states that RFS has had a limited effect, if any. GAO provided two reasons for this limited effect: (1) RFS relies on conventional corn-starch ethanol, which has smaller potential to reduce GHG emissions; and (2) most corn-starch ethanol has been produced in plants that are exempt from emission reduction requirements. In addition, GAO reports concerns that RFS will not meet the GHG emissions reduction goals that it envisioned by 2020. Lastly, GAO reports that the renewable identification numbers (RIN) had a small effect on prices. EPA analysis identified areas of concern within RINs, which included possible fraud in the market, price volatility, and concerns about the impact they have on small refiners.

Tags: RFS, GHG

 

By Lynn L. Bergeson

On May 22, 2019, Senator Ron Wyden (D-OR) introduced a bill (S. 1614) to amend the Clean Air Act (CAA) to modify the definition of “renewable biomass” under the Renewable Fuel Standard (RFS).  The CAA currently prohibits the use of biomass from federal lands in the making of renewable fuels as defined by the RFS.  The bill would allow the use of biomass from certain federal lands needing ecological restoration in the making of renewable fuels.  The bill also is intended to make it financially feasible for private landowners to remove low-value brush that impacts wildlife habitats and poses fire risks.  Under the bill, all mill residuals -- like sawdust and shavings -- can be used for biofuels and it requires biomass harvested from federal lands to be done in accordance with all federal laws, regulations, and land-use plans and designations.

Tags: CAA, Biofuel, RFS

 

By Lynn L. Bergeson

On April 30, 2019, 15 U.S. Senators signed and submitted a letter to the U.S. Environmental Protection Agency (EPA) Administrator, Andrew Wheeler, urging him to protect U.S. consumers and account for the ethanol blend wall when setting annual target volumes under the Renewable Fuel Standards (RFS) requirements. According to the letter, a decrease in consumer demand for gasoline has occurred since the RFS Program was passed into law. Instead of the original 170 billion gallons projected, now, the U.S. Energy Information Administration (EIA) projects a gasoline demand for 2020 to be closer to 142 billion gallons and to decrease to 137 billion gallons by 2022. Therefore, in the letter, the Senators request that EPA acknowledge the “market reality when resetting the statutory targets such that the contribution of conventional biofuel is set below an implied 10 percent level for 2020.” They also emphasize that, should EPA fail to reset the volume below the blend wall, EPA would be violating the Congressional intent set forth under RFS, harming both consumers and refiners

Tags: RFS, Biofuel, EPA

 

By Lynn L. Bergeson

On April 29, 2019, the National Chicken Council submitted a letter to EPA’s Office of Transportation and Air Quality outlining the potentially negative impact of the changes to the biofuels policy on the poultry industry. In his letter to EPA, Mike Brown, President of the National Chicken Council, reported concern with EPA’s proposal on year-round ethanol-15 (E15) use under the Renewable Fuels Standard (RFS) Program. The National Chicken Council believes that EPA has failed to consider the impact of such volume waivers on the boiler industry, and for poultry and livestock feeders generally. Brown assures EPA that a year-round E15 use waiver “will result in a rapid expansion of corn use under the RFS adding the potential for price and supply volatility in the corn market.” Instead of the aforementioned proposed modifications, the National Chicken Council is suggesting that EPA consider a predictable, transparent off-ramp based on the U.S. Department of Agriculture (USDA) stocks-to-use-ratio in the June World Agricultural Supply and Demand Estimates (WASDE) report. Partial waivers would then be structured for the remainder of the year. The structure of the partial waivers is further detailed in the letter.

Tags: E15, RFS, Biofuel

 

By Lynn L. Bergeson

On April 17, 2019, the Iowa Renewable Fuels Association (IRFA), a Biobased and Renewable Products Advocacy Group (BRAG®) member, spoke at a press conference alongside Iowa Secretary of Agriculture, Mike Naig, on how the approval of small-refinery exemptions (SRE) for the 2018 Renewable Fuel Standard (RFS) blend levels would undermine RFS in an irreversible way.  IRFA’s Executive Director, Monte Shaw, pointed out that under current conditions all a refinery needs to show significant disproportionate economic harm to be granted an SRE is to purchase Renewable Identification Numbers (RIN).  RINs, also known as compliance credits, can be purchased for as little as eight cents, which undermines RFS and breaks President Trump’s promise to protect the 15-billion-gallon RFS.  Shaw concludes:  “[t]he bottom line is this:  If you grant SREs under these circumstances with eight-cent RINs, then what EPA is really saying is that they will always grant SREs and the hope of a true 15-billion-gallon RFS is dead.”

Tags: IRFA, RFS, Biofuel

 
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