That's according to Iowa Renewable Fuels Association Executive Director Monte Shaw emphasized that approval of small-refinery exemptions (SREs) for the 2018 Renewable Fuel Standard (RFS) blend levels would irreversibly undermine the RFS. Speaking alongside Iowa Secretary of Agriculture Mike Naig, Shaw made his remarks at a press conference at Southwest Iowa Renewable Energy, an ethanol plant near Council Bluffs.
To be granted an SRE, a refinery must demonstrate “disproportionate economic harm” in complying with the RFS. Shaw pointed out that in recent weeks refineries could have complied with their obligation by purchasing compliance credits, known as RINs, for as little as eight cents.
“Given the current circumstances, granting any of the 2018 small-refinery exemptions would fundamentally undermine the RFS and break President Trump’s promise to protect the 15-billion-gallon RFS,” Shaw said. “At a time when you can avoid blending a $1.30 gallon of ethanol by instead buying a RIN for eight cents – a price even Texas Senator Ted Cruz found acceptable – how can there be disproportionate economic harm?”
SREs granted under the Trump Administration have already accounted for over 2.5 billion gallons of RFS demand destruction.
“The bottom line is this: If you grant SREs under these circumstances with eight-cent RINs, then what the EPA is really saying is that they will always grant SREs and the hope of a true 15-billion-gallon RFS is dead,” he said. “That is not what Congress intended or President Trump promised.”
After noting that farm income, corn prices, and US ethanol use all dropped in 2018, Shaw concluded by noting there is still time to turn around the Trump Administration’s record for rural America.
He then passed around the following hand-out. EPA is expected to soon announce decisions on 39 new applications for small-refinery exemptions (SREs) from the 2018 Renewable Fuel Standard (RFS) blend levels. To approve these SREs, EPA would have to find “disproportionate economic harm” to the applicants, despite the fact that RIN prices have plummeted. If EPA grants 2018 exemptions when refineries could comply with their obligation by purchasing RINs priced as low as 8 cents, there would never be a scenario in which SREs would not be justified, irreversibly undermining the 15-billion-gallon RFS.
While RIN prices have fallen, and refineries are raking in record profits, ethanol plants and rural Iowans are suffering. After an unprecedented number of SREs were approved by the Trump Administration, U.S. ethanol use actually went down in 2018 for the first time in 21 years.
Trump Administration Quotes…
“The RFS, which is Renewable Fuel Standard, is an important tool in the mission to
achieve energy independence to the United States. I will do all that is in my power as
President to achieve that goal...The EPA should ensure that biofuel RVOs, or blend
levels, match the statutory level set by Congress under the RFS.” – Candidate Donald
Trump, January 19, 2016 at the Iowa Renewable Fuels Summit
“As President, I would encourage regulators to end restrictions that keep higher blends
of ethanol and biofuel from being sold...I am there with you 100 percent.” – Candidate
Donald Trump, January 19, 2016 at the Iowa Renewable Fuels Summit
“My administration is protecting ethanol. Alright? That's what you wanted. Today we are
unleashing the power of E15 to fuel our country all year long, not eight months.” –
President Donald Trump, October 9, 2018 at a rally in Council Bluffs, IA
“When the agency was not issuing the waivers, we were sued three times and we lost
all three cases.” – EPA Administrator Andrew Wheeler, April 9, 2019 before U.S. House
Energy and Commerce Subcommittee
“We will certainly take the advice of the Dept of Energy into account. In the past we’ve
taken their advice in all but one instance.” – EPA Administrator Andrew Wheeler, April
9, 2019 before U.S. House Energy and Commerce Subcommittee