U.S. EPA receives 52 new petitions for retroactive biofuel blending waivers

NEW YORK (Reuters) – The U.S. Environmental Protection Agency has received 52 new petitions for retroactive biofuel blending waivers that, if granted, would help bring oil refiners into compliance with a court ruling this year, EPA data showed on Thursday.

FILE PHOTO: An empty podium awaits the arrival of U.S. Environmental Protection Agency (EPA) Acting Administrator Andrew Wheeler to address staff at EPA headquarters in Washington, U.S., July 11, 2018. REUTERS/Ting Shen/File Photo

The new pending applications for blending exemptions are for compliance years 2011 through 2018. The waivers exempt oil refiners from U.S. laws that require they blend billions of gallons of biofuels into their fuel pool.

In January, the Denver-based 10th U.S. Circuit Court of Appeals ruled that waivers granted to small refineries after 2010 had to take the form of an “extension.” The decision called into question the future of the EPA’s exemption program because most of the recipients of waivers in recent years have not continuously received them each year since 2010.

The waivers have been a battleground for the oil and corn lobbies, both major constituencies of President Donald Trump. Biofuel advocates say the waivers hurt demand for corn-based ethanol, while the oil industry refutes that claim and says the obligations are too pricey.

Under the U.S. Renewable Fuel Standard (RFS), oil refiners must blend billions of gallons of biofuels into their fuel, or buy credits from those that do. Small refiners that prove the rules would financially harm them can apply for exemptions.

The EPA is in charge of granting exemptions after the Department of Energy reviews applications.

The Energy Department’s Mark Menezes said last month that the EPA had asked the department to review waiver requests from refiners covering past years, but the agency had not reported the petitions on its dashboard until Thursday.

The Trump administration has roughly quadrupled the number of exemptions it grants, compared with previous years.

Biofuel advocates have called on the Trump administration to reject the waiver requests.

“EPA’s dashboard confirms that the refiners hope to rewrite years of history, just to bypass the 10th Circuit Court and push more biofuels out of the marketplace,” said Emily Skor, chief executive officer of biofuel trade group Growth Energy.

Leading U.S. oil industry groups are split on the retroactive requests, more evidence of a growing public fracturing within the oil industry around the administration’s approach to blending laws.

The American Petroleum Institute, one of the largest U.S. oil and gas lobby groups, said it would not support granting past-year waiver requests.

“To consider granting compliance exemptions from the RFS years after the fact is yet further evidence that the RFS program is a broken program that needs to be repealed or significantly reformed,” said Ron Chittim, API’s vice president of downstream policy.

The American Fuel & Petrochemical Manufacturers, which represents more merchant refiners, said the EPA wrongly denied waivers in the past and, therefore, refiners were justified to seek relief now for those years.

“If continuity was breached because of EPA’s earlier misinterpretation, it would be wrong for the agency not to rectify this for qualifying facilities,” an AFPM spokeswoman said.

Reporting by Stephanie Kelly; Editing by Paul Simao