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.
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Bergeson & Campbell, P.C. (B&C®) is a Washington, D.C., law firm providing biobased and renewable chemical product stakeholders unparalleled experience, judgment, and excellence in bringing innovative products to market.
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On August 23, 2018, U.S. Senators Patty Murray (D-WA), Roy Blunt (R-MO), and 37 others submitted a bipartisan letter, asking the U.S. Environmental Protection Agency (EPA) to increase the renewable volume obligations under the Renewable Fuel Standard (RFS) as proposed by EPA in June 2018. Under the aforementioned proposed RFS, EPA would raise the advanced biofuel volume for 2019 to 4.88 billion gallons and the biomass-based diesel volume for 2020 to 2.43 billion gallons. The bipartisan group argues that although these increases may be promising, the potential of biodiesel is still taken too lightly. Not only does the biodiesel industry have prodigious growth potential, its expansion would significantly generate jobs in the U.S. In particular, the Senators emphasized the need to also recognize small refiners’ economic hardship exemptions during the 2019 compliance year. On August 1, 2018, the U.S. Senate Committee on Environment and Public Works (EPW Committee) held a hearing entitled “Examining EPA’s Agenda: Protecting the Environment and Allowing America’s Economy to Grow.” Testifying at the hearing was Andrew Wheeler, the U.S. Environmental Protection Agency’s (EPA) Acting Administrator. Witness testimony and an archive of the hearing are available online. The hearing was intended to provide Wheeler with the opportunity to present himself for the first time in front of the EPW Committee as the Acting Administrator, and to update the EPW Committee on EPA’s agenda since the resignation of Scott Pruitt, EPA’s former Administrator. Wheeler’s testimony highlighted three main priorities for EPA moving forward: (1) regulatory certainty between EPA and state/local governments; (2) improvement of programs within EPA; and (3) increased transparency in risk communication. On biofuels, Wheeler stated that EPA has approved pathways for biofuels derived from sorghum which “lays the groundwork for more homegrown fuels under the Renewable Fuels Standard (RFS) and adds diversity to the nation’s biofuel mix.” On July 30, 2018, Senators Susan Collins (R-ME) and Chris Coons (D-DE) reintroduced their sustainable chemistry bill, the Sustainable Chemistry Research and Development Act of 2018 (S. 3296). This bill encourages the development of new and innovative chemicals, products and processes with an improved “environmental footprint” through efficient use of resources, reducing or eliminating exposure to hazardous substances, or otherwise minimizing harm to human health and the environment. The legislation is intended to support new innovations in chemistry that benefit the economy, the environment, and human health. The bill supports coordinated efforts in sustainable chemistry across federal agencies through research and development, technology transfer, commercialization, education, and training programs -- including partnerships with the private sector. The bill does not include any regulatory components, nor does it authorize new spending. Its goal, rather, is to coordinate better federal activities in sustainable chemistry and encourage industry, academia, nonprofits, and the general public to innovate, develop, and bring to market new sustainable chemicals, materials, products, and processes.
On October 18, 2017, Senator Debbie Stabenow (D-MI) introduced to the Senate the Renewable Chemicals Act of 2017 (S. 1980), which aims to establish a short-term tax credit for the production of renewable chemicals and for investment in renewable chemical production facilities. If enacted, the legislation would allow taxpayers to claim a production credit equal to $0.15 per pound of biobased content of each renewable chemical produced. In lieu of the production credit, taxpayers would be able to claim an investment credit equal to 30 percent of the basis of any eligible property that is part of a renewable chemical production facility. The bipartisan bill was co-sponsored by Senators Susan Collins (R-ME), Chris Coons (D-DE), Al Franken (D-MN), and Tammy Baldwin (D-WI), and is companion legislation to H.R. 3149, which was introduced in the House in June 2017 by Representative Bill Pascrell (D-NJ). On October 19, 2017, the U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt sent a letter to Senators Joni Ernst (R-IA), Charles Grassley (R-IA), Pat Roberts (R-KS), John Thune (R-SD), Mike Rounds (R-SD), Deb Fischer (R-NE), and Ben Sasse (R-NE) to confirm his commitment to support the spirit and the letter of the Renewable Fuel Standard (RFS) program. In the letter, Pruitt stated that, following a detailed analysis, numerous stakeholder meetings, and review of public comments, it was determined that EPA would not grant the petition to move the point of obligation to blenders. Additionally, EPA intends to issue a final Renewable Volume Obligation (RVO) rulemaking by the statutory deadline of November 30, 2017. While the rulemaking process is ongoing, Pruitt indicated that the final RVO amounts would be set at levels equal to or greater than the proposed amounts. Finally, Pruitt highlighted EPA’s willingness to work with Congress on a nationwide Reid Vapor Pressure (RVP) waiver for E15. Senators Ernst, Grassley, Thune, and Fischer each released statements to confirm their commitment to working collaboratively with EPA on these issues. On September 28, 2017, the Senate Committee on Agriculture, Nutrition, and Forestry held a hearing titled “Rural Development and Energy Programs: Perspectives for the 2018 Farm Bill” to gather stakeholder input regarding the programs under the Farm Bill that are working or need improvement. In his opening statement, Committee Chair Pat Roberts (R-KS) stated that it is critical for the next Farm Bill to support renewable energy and biobased product manufacturers, as well as rural businesses, cooperatives, health clinics, schools, and other essential service providers. On June 12, 2017, 28 companies representing the advanced and cellulosic biofuel industry sent a letter to the members of the Senate Environment and Public Works Committee requesting their support for the Consumer and Fuel Retailer Choice Act (S. 517), which is scheduled to be marked up in the Environment and Public Works Committee before the August recess. The letter claims that the Act, which would extend the Reid Vapor Pressure (RVP) waiver to ethanol blends above 10 percent, is vital to the advanced biofuel industry since it would allow E15, a more environmentally-friendly and affordable fuel, to be sold year round and, thus, would create marked headroom for next generation fuels. While the signatories commit to supporting the Renewable Fuel Standard (RFS) in its entirety, they state that the RVP issue will not only ensure that E15 can be sold year round but will also provide an opportunity for advanced and cellulosic fuels to compete at the pump. According to the letter, moving to E15 would reduce the cost of gasoline by 5 to 15 cents per gallon, and lower emissions harmful to the environment. On May 9, 2017, Senator Elizabeth Warren (D-MA), along with seven additional Democratic Senators, sent a letter to the Securities and Exchange Commission (SEC), the U.S. Environmental Protection Agency (EPA), and the Commodities Futures Trading Commission (CFTC) requesting an investigation into the activities of Carl Icahn for potential insider trading, market manipulation, and other securities and commodities law violations in the renewable fuel credit market. The letter states that the actions of and the massive profit earned by Icahn raise questions related to conflict-of-interest rules that apply to government officials, and questions regarding insider trading and market manipulation of renewable fuel credits, known as Renewable Identification Numbers (RIN) -- which SEC, EPA, and CFTC have jurisdiction over. EPA oversees the issuance and trading of RINs. CFTC works with EPA to ensure integrity in the RIN market since it has broad authority to prevent insider trading and other market manipulation in commodities markets and futures markets. SEC has jurisdiction to investigate whether Icahn’s actions as a senior adviser to President Trump affected CVR Energy's stock value or the accuracy of the company's annual and quarterly financial reporting and disclosure. |
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