By Lynn L. Bergeson and Ligia Duarte Botelho, M.A.

On January 13, 2020, U.S. Representative Cindy Axne announced that the Government Accountability Office (GAO) has responded to a bipartisan letter submitted by members of the House Biofuels Caucus (HBC) requesting an investigation into misuse of small refinery exemptions (SREs) by the U.S. Environmental Protection Agency (EPA). Submitted in August 2019, the bipartisan letter requested that GAO examine EPA’s review and approval of SRE waivers under the Renewable Fuel Standard (RFS). HBC’s letter also included a request for inspection of the U.S. Department of Energy’s (DOE) viability scores for SREs reviewed in 2018. HBC’s concerns were mostly related to the economic consequences to rural communities due to the exemption of approximately four billion gallons of fuel from the RFS in 2018. In addition to the aforementioned requests, HBC members asked that GAO also consider the following questions:

• Has DOE changed the criteria, the interpretation of the criteria, the methodology, or any other significant aspect of how it makes its recommendations to EPA for SREs?
   
• Other than the viability score provided by DOE, what other factors are being considered by EPA in awarding SRE waivers? How has this changed since the previous Administration?
   
• Since the development of DOE’s 2011 methodology, what percentage of applications that received a disqualifying viability score from the DOE were granted?
   
• How many times has DOE recommended a partial waiver for a refinery?
   
• Has EPA granted a partial waiver?
   
• Does EPA or DOE consider the economic viability of the parent refiner company when considering an application from an individual refinery?
   
• Does DOE take Renewable Identification Numbers (RIN) into account when assessing relief petitions?

On January 10, 2020, GAO responded to the bipartisan request, agreeing to review matters related to the approval of SRE waivers and stating that it will begin its work shortly. Mark E. Gaffigan, Managing Director of GAO’s Natural Resources and Environment, and his staff will be in charge of the investigation.

In August 2019, Axne had also submitted a letter to EPA’s Acting Inspector General (IG), Charles Sheehan, requesting an investigation of this matter. In its response letter to HBC, GAO stated that it will be in contact with the cognizant IG’s office to ensure that efforts are not duplicated.