On Monday, Sept. 14, the Environmental Protection Agency (EPA) announced the denial of 54 pending past year (2001-2018) small refinery exemptions (SRE). This was greeted as good news by corn farmers across the United States.
House of Representatives member, Roger Marshall, (Kansas Republican) the co-chair for the House Biofuels Caucus, said, “I have long insisted that 15 billion gallons means 15 billion gallons and I applaud President Trump and EPA Administrator Wheeler for delivering on the promise to support our biofuel producers and the farmers that make those products possible. The denial of gap-year SREs means greater production opportunities for our biofuel facilities and ripple effects for the communities in which they operate.”
The National Corn Growers Association (NCGA) in a lengthy statement, also praised the denial of the SREs. However, they noted 14 gap-year waivers remain under required review at the Department of Energy (DOE), and the EPA has 31 waivers under consideration for 2019 and 2020 Renewable Fuel Standard (RFS) compliance years.
“Asking for waivers for nearly ten years ago was a new low by the oil industry to undermine the RFS and rewrite history. Denying these petitions was the obvious answer and farmers are pleased to begin to move past this distraction. We thank our bipartisan supporters in Congress for their advocacy in upholding the RFS,” said NCGA president Kevin Ross, an Iowa corn farmer.
He continued by saying, “Nearly a year ago, the President directed the EPA to follow the letter of the law and keep the RFS whole, and in January, the Tenth Circuit ruled the EPA exceeded its authority in granting waivers. The Administration has yet to apply this decision to current waiver requests while corn farmers suffer suppressed markets and ethanol plants continue to have idled capacity. While denial of these past-year waivers is obviously positive news for farmers and biofuel producers, we’re never going to have the certainty we need until the underlying waiver issue is fully resolved.
“The solution is simple; the EPA needs to uphold the law, adhere to the Tenth Circuit decision, and follow through on the President’s commitment to farmers. Corn growers stand ready to work with the administration to uphold the RFS and continue to remove barriers to higher ethanol blends,” he added.
The North Dakota Corn Growers Association (NDCGA) also had praised the administration and EPA action that denied dozen of refinery requests for waivers.
Rob Hanson, a corn grower from Wimbledon and president of the NDCGA said, “Denying these requests is just the right thing to do. Not only is it a win-win for the environment because of the production of clean-burning renewable fuels like corn-made ethanol, but also for our farmers and the ag economy. I’m happy to hear that the President is standing by commitments made to our farmers and essential partners in the ethanol industry.”
The denial of the waivers was also good news for the biofuel industry.
“Now, more than ever, our nation's farmers and ethanol producers are counting on the RFS to provide market stability and certainty during an incredibly difficult and tumultuous time," said a coalition that includes the Renewable Fuels Association and the National Corn Growers Association.
The EPA, which administers the RFS, mandates that oil refiners blend 15 billion gallons of ethanol in the country’s fuel supply in 2020, along with roughly 5 billion more gallons of other types of biofuels.
According to Barry Coleman, executive director of the Northern Canola Growers Association, the small refinery exemptions have also impacted the biodiesel industry and oil seed producers.
• Small refinery exemptions destroyed demand for hundreds of millions of gallons of biodiesel each year over the past several years.
• If EPA continues to hand out small refinery exemptions at the same rate, it will reduce biodiesel demand by 2.54 billion gallons and cause a $7.7 billion loss for the industry, according to University of Illinois economist Scott Irwin.
• Just one small refinery exemption can eliminate demand for an entire biodiesel facility. A “small” oil refinery can produce up to 3 million gallons of fuel per day. Its annual RFS obligation for biodiesel is only 20 million gallons, which is more than some small biodiesel plants produce in a year.
• EPA began freely handing out small refinery exemptions before receiving the Congressional directives and court decisions they cite as justification.
The production of corn in North Dakota has increased exponentially over the last decade with the development of ethanol plants in the state. About half of North Dakota produced corn now goes to the production of ethanol. About 540 million gallons of ethanol are produced in the state annually using 189 million bushels of corn.