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Trump backs E15 as senators demand EPA's RFS waiver

WASHINGTON, D.C. — The corn and ethanol industries are awaiting decisions from President Donald Trump and the U.S. EPA regarding the year-round sale of gasoline containing 15 percent ethanol.

Currently, the EPA bans the use of fuel blends above 10 percent ethanol and below 85 percent from June 1-Sept. 15. The ban doesn’t include flex-fuel vehicles. The EPA has said summer restriction is necessary to reduce evaporative emissions from gas that contribute to ground-level ozone.

Earlier this month, Trump said his administration may allow the sale of E15 year-round, Reuters reported.

“We’re going to be going probably, probably to 15, and we’re going to be going to a 12-month period,” the news agency quoted him as saying. “We’re going to work out something during the transition period, which is not easy, very complicated.”

The president of the National Corn Growers Assoc. (NCGA) appreciates Trump’s commitment to corn farmers and rural America. “Allowing the sale of E15 all year will allow for less confusion and more savings at the pump for consumers, continue to benefit the environment with the further reduction of emissions and provide corn farmers with a more stable market,” Kevin Skunes said.

“NCGA realizes there is still work that needs to be done to make this happen, but we will work alongside the President and administration to make sure this regulatory burden is removed.”

If Trump follows through on his comments regarding E15, he’ll probably issue an executive order or tell EPA Administrator Scott Pruitt to make the change, said John Torres, director of government and industry affairs for the Ohio Corn & Wheat Growers Assoc.

“We’ve got the President on record saying he supports going to E15 year round,” he noted. “On the campaign trail, candidate Trump said he loved ethanol and he’s going to protect ethanol and protect farmers. We continue to remind the President that he made a promise.”

Year-round sales of E15 will allow the industry to have parity in Reid vapor pressure (RVP), or gasoline volatility, Torres said. “RVP parity gives the marketplace options,” he said. “It gives consumers the right to choose the type of fuel they put into their vehicles.”

A change regarding the use of E15 would likely go through the regulatory rulemaking process, including a public comment period, said Cory Harris, public affairs manager with the Indiana Corn Growers Assoc. If the rule becomes official, it would probably face legal challenges.

“We do feel this is going to happen, but I can’t imagine a situation where we’ll be filling up with E15 this summer,” Harris said. “President Trump has done an extremely good job of keeping his promise to corn farmers and the ethanol industry. We take the position that E15 will take off and that will drive corn demand.”

The ethanol industry is keeping an eye on efforts to put a cap on the price of Renewable Identification Numbers (RINs), credits used to determine compliance with the Renewable Fuel Standard (RFS). Late last year, Sen. Ted Cruz (R-Texas) proposed capping the price at 10 cents per credit.

“The corn and ethanol industries see the cap as a non-starter,” Torres said. “It’s a violation of the Congressional intent of the RFS. The law doesn’t allow for a cap on RINs to be put into place.”

RIN values would be impacted if RVP parity is allowed, Skunes said. “Additional ethanol blending addresses refiner concerns about RIN values. Increased blending lowers RIN values.”

Refinery waivers

Rep. Frank Pallone Jr. (D-N.J.), ranking member of the House Energy and Commerce Committee, and Rep. Collin Peterson (D-Minn.), ranking member of the Agriculture Committee, have asked Trump to instruct the EPA to stop issuing waivers to refiners relieving them of their obligations under the RFS. The program requires refiners to blend renewable fuels into the transportation fuel supply.

In an April 20 letter to Trump, Pallone and Peterson said the EPA has granted a large number of waivers, including some to refiners that aren’t small and that aren’t experiencing financial hardship.

“As established in the Clean Air Act, the RFS program anticipated the need for compliance flexibility for small refiners,” they wrote. “However, the authority of the Administrator to grant waivers to small refiners under the RFS program was never intended to, nor does it permit the administrator to use waiver authority to, thwart the primary goal of the RFS program established by Congress – to increase the use of renewable fuels.

“Misuse of the small refiner exemption to reduce renewable fuel volumes undermines the goal of the RFS program, creates uncertainty and economic hardship in the agricultural community and gives unfair advantage to specific facilities within the refining sector.”

Earlier this month, a bipartisan group of 13 senators asked Pruitt to stop issuing the waivers. In an April 12 letter to Pruitt, they said recent reports indicate “dozens of small refiner waivers have been secretly granted to large, multibillion-dollar companies under the guise of the small refinery hardship exemption provision” of the Clean Air Act.

EPA has issued 25 “disproportionate hardship” waivers to large refining companies since 2016, the letter said. “These waivers fall well outside the bounds of the letter or spirit of this provision in the law, which sought to provide flexibility for the smallest of U.S. refiners, and only in case of genuine hardship,” the senators explained.

“Worse, EPA’s actions are already hurting biofuel producers and farmers across the United States at a time when farm income is at the lowest levels since 2006 and retaliatory trade measures from China threaten to deepen the crisis.”

The senators asked Pruitt to provide a list of refiners that have received a waiver. They also requested he send a detailed report to Congress within two weeks describing his justification for granting each waiver.