EPA proposes lowering past blending requirements for gasoline, rejecting waivers

The Environmental Protection Agency (EPA) on Tuesday handed the oil and gas and biofuels industries mixed results in its program requiring biofuels to be blended into gasoline and diesel fuels.

The EPA proposed to reject all 65 requests it received from refiners for exemptions to biofuel blending mandates, but it also proposed lowering the total volume of biofuels required to be blended for the years 2020 and 2021. 

The agency said it lowered the requirements to reflect what it saw as the actual rates of use. 

The decision is expected to return blending credits to refiners, who could then use them to blend less in the future. 

The biofuels issue pits two traditionally Republican constituencies — the oil and gas industry and farmers, whose products like corn are used to make biofuels — against one another. 

Biofuels producers have pushed against the waivers and for high mandates, while the oil and gas industry has pushed for waivers and low blending mandates. 

Geoff Cooper, president and CEO of the Renewable Fuels Association, which represents biofuels producers, took issue with the decision to go back and retroactively change previously-set requirements. 

“We think it is legally impermissible and indefensible for them to do that,” Cooper said. 

While his group expressed disappointment in the decision for the 2020 and 2021 credits, he said he believes the EPA’s proposed blending requirements for 2022 is strong. 

“The 2022 numbers, we’re actually pretty happy about, it’s just EPA’s proposal to go back in time and redo 2020 that that bothers us,” he said.  

The administration also announced on Tuesday a separate boost for biofuel producers through the Agriculture Department.

It said it will make up to $700 million available in economic relief for the industry for pandemic impacts and will add an additional $100 million to help increase the sale of fuels using higher blends of bioethanol and biodiesel. 

In a statement, EPA Administrator Michael Regan argued that his agency’s actions will help grow the biofuels program by “setting ambitious levels for 2022, and by reinforcing the foundation of the program so that it’s rooted in science and the law.”

Republicans were united in their criticism of Biden on Tuesday, but their reasoning differed.

“The Biden administration claims to care about addressing climate change but is giving big oil a huge break at the expense of the farmers in the Heartland who produce cleaner fuel. That doesn’t add up,” read a statement from Sen. Deb Fischer (R-Neb.), who represents a large agricultural constituency.

Fischer also accused the administration of “delaying” the waiver denial.

But Sen. Shelley Moore Capito (R-W.Va.) decried the waivers as harmful to the oil and gas industry.

“The proposed requirements totally ignore congressional intent in the Clean Air Act to allow for waivers for small refiners facing hardship due to [Renewable Fuel Standard] mandates,” she said in a statement. “This is more evidence of this administration’s intent to destroy the oil and gas industry.”

Updated 5:47 p.m.