By JORDAN STRICKLER

Kentucky Correspondent

WASHINGTON, D.C. — The U.S. EPA has issued a rule allowing drivers to buy E15 (gasoline with 15 percent ethanol) year-round, replacing a longstanding law prohibiting its sale during summer months.

And in other biofuel news, in response to a flurry of fuel refinery waivers granted by the U.S. EPA, two Congressmen have introduced a bill attempting to rein in the action.

Reps. Collin C. Peterson (D-Minn.) and Dusty Johnson (R-S.D.) introduced the Renewable Fuel Standard (RFS) Integrity Act of 2019, which would establish an annual deadline for refineries to submit small refinery exemption (SRE) petitions from their RFS blending obligations each year, and will attempt to increase transparency in the process.

Currently, most refineries do not apply for a waiver until after the EPA sets the RFS volumes for the following year. This new legislation would set a June 1 deadline for refineries to apply for RFS exemptions, to allow time for the U.S. Department of Energy and the EPA to determine exemptions before the annual renewable volume obligations (RVOs) are finalized, allowing EPA to avoid retroactive waivers.

Since 2018, the EPA has granted 54 waivers to refineries for the 2016 and 2017 RFS compliance years, totaling 2.61 billion ethanol-equivalent gallons. The agency also has 39 waiver applications pending for 2018.

Under the EPA's RFS program, refining companies must blend gasoline with ethanol while diesel must be blended with other approved biofuel. However, refineries that use fewer than 75,000 barrels of crude oil per day may be granted a temporary exemption, if complying with the regulations cause them to "suffer disproportionate economic hardship."

Waivers come at a bad time for farmers, with national ag income projected to be at $69.4 billion for the year. If the projection is accurate, this would be the third time since 2015 it will not exceed $70 billion. This is far below levels earlier this decade, when a seven-year commodity boom propelled income to a record $123.4 billion.

“For five years in a row, EPA has failed to enforce the RFS conventional biofuel volume requirements set forth by Congress, even though there has been ample supply available at a low cost to meet the statutory volumes,” said Geoff Cooper, president and CEO of the Renewable Fuels Assoc.

“The consequences of EPA’s chronic mismanagement of the RFS have been economically devastating for ethanol producers, farmers, and consumers alike. In recent years, the Congressionally required RFS volumes have been undermined by a surge in secretive small refiner exemptions and an abject failure on the part of EPA to reallocate those exempted volumes.”

Recently, the Advanced Biofuels Assoc. sued to block the EPA from granting ethanol waivers; however, the U.S. Court of Appeals for the District of Columbia denied its request for a temporary injunction.

In an editorial in The Hill, Bernard L. Weinstein, associate director of the Maguire Energy Institute and an adjunct professor of economics in the Cox School of Business at Southern Methodist University, wrote that ethanol groups’ assertions do not reflect the truth.

“Despite claims that small refinery waivers are reducing the demand for ethanol, U.S. Energy Information Administration (EIA) monthly data show no backtracking on biofuel blending. In fact, the blend rate in the first quarter of 2019 was essentially the same as a year ago,” he said.

“Ethanol producers may be hurting, but it is not because of the small refiner exemptions. Last year, U.S. ethanol exports reached a record 1.7 billion gallons, or 11 percent of total production.”

E15 now year-round

In a win for farmers, on May 31 the EPA issued its final rule allowing American drivers to purchase E15 year-round. This fulfills a promise made by the Trump administration to Iowa farmers last fall.

“We’ve had a lot of bad news in agriculture,” said Mark Lambert, communications director for the National Corn Growers Assoc. (NCGA). “It’s nice to see a significant win.”

According to data from the NCGA, higher blends of renewable fuel such as E15 reduce prices for drivers by 3-10 cents per gallon and result in lower emissions, while resulting in 43 percent fewer greenhouse gas emissions than gasoline.

And a 2015 study by the University of Illinois shows that a move from E10 to E15 in just seven states (Iowa, Illinois, Kansas, North Carolina, Ohio, Michigan, and Wisconsin) would take out an additional 3.4 million metric tons of carbon dioxide emissions annually.

But the move will most likely not go unchallenged. It is expected that both oil companies and environmental advocates will challenge the move in court.

“EPA has acted outside its statutory authority in granting year-round E15 and rushed through the rulemaking process in order to meet an arbitrary deadline,” said Frank Macchiarola, vice president of Downstream and Industry Operations for the American Petroleum Institute. “This premature policy attempts to push E15 into the market before it is ready.”

Collin O’Mara, president of the National Wildlife Federation, said in a statement, “Allowing the year-round sale of E15 gasoline is both illegal under the Clean Air Act and will accelerate the destruction of wildlife habitat and pollution of our air, and drinking water.”