US exempts refiner Andeavor from biofuels obligations: report

6 Apr 2018 |

The US Environmental Protection Agency provided hardship exemptions from the country’s biofuel laws to 25 oil refineries in 2017, almost double the usual amount, Reuters reported, citing a source with the government agency.

A separate report said the EPA has exempted Andeavor, one of the US' largest refiners from compliance with US biofuels regulations.

The move to exempt Andeavor has further irked the corn lobby that is already concerned about proposed reforms to the Renewable Fuels Standard (RFS).

“[The] EPA has struck again. It appears the agency has initiated a fire sale on RFS demand. Providing a small refiner waiver to a company like Andeavor is laughable and abandons the commitment of President Trump to protect the RFS. This is an outrageous abuse of the statute,” said Renewable Fuels Association (RFA) CEO Bob Dinneen in a statement. 

Reuters reported that the exemption applies to the three smallest of Andeavor’s 10 refineries and is the first time that a major producer with multiple sites have been granted the waiver from the RFS, which requires refiners to blend biofuels with gasoline or buy credits, known as RINs, from companies that carry out blending.

In the wake of the report, RIN prices fell 6 cents to 38 cents per credit.

Andeavor refused to confirm whether it has sought an EPA waiver while the government agency has also withheld comment in line with its policy to issue exemptions in secret, Reuters added.

The RFA filed a formal request with the EPA this week requesting details on which companies received waivers and the reasons why.

A draft bill led by Republican Senator John Cornyn of Texas is considering a blanket waiver for all small refineries, according to sources familiar with the draft legislation, it was reported this week. 

Cooperative CHS said the number of hardship waivers granted to refiners has prompted suspicions as to whether the administration is using the exemptions as a way "to eviscerate a program they do not like".

The EPA's chief Scott Pruit has spoken regularly this year of the need to reform the RFS, although meetings called by president Donald Trump to find compromise between the corn and refiner lobbies have failed to bear fruit.

Congressional battle

According to reports, Trump has delegated the decision to Congress, which narrowly favours the corn lobby based in a string of mid-western states that were instrumental to the president's 2016 electoral victory, according to political analysts.

But with mid-term elections due in seven months, the president may be trying to shore up votes in states and districts where oil refining is a major employer. 

Earlier this year, the EPA gave partial relief to a bankrupt Philadelphia refiner on its obligations to buy several million dollars’ worth of RINs.

Sign up to get all the day's news and prices
Register for the weekly [RE]fuel Report
+000