Waivers for all?

By: Daryl Milliner / April 13, 2018

Ding, Ding, Ding!  Let’s get ready to rumble! Currently in the United States there is an ongoing battle involving some of our biggest industries in this country, oil and corn. The battle between refiners and corn growers stems from the U.S. Renewable Fuel Standard (RFS) which is a law enacted by President George W. Bush to help farmers boost the demand for corn and to reduce fossil fuel imports or energy independence. The Renewable Fuel Standard is a federal program that requires transportation fuel sold in the United States to have a minimum amount of renewable biofuels in it. In this case were speaking of ethanol and biodiesel.  Ethanol is an alcohol based fuel that is distilled from plant materials such as sugar, corn, and biodiesel from feed-stocks such as soy, corn or animal renderings. The Environmental Protection Agency regulates the RFS program and establishes the requirements for volumes annually and is assessed as a percentage against obligated parties. Obligated parties are refiners, importers and blenders of on-road fuel. The EPA tracks compliance of renewable fuels by renewable identification number credits or RINs which assigns a RIN to each gallon of renewable fuel.

Corn Field

Prior to this year, the prices for these blending credits, which can be earned or purchased, have skyrocketed which in turn have been costing refiners hundreds of millions of dollars. Companies like Exxon, Valero and Chevron have been asking for exemptions or waivers to the RFS biofuels policy which have historically been reserved for smaller refineries under times of financial distress. The EPA has already issued 25 hardship waivers to small refineries in recent months which has helped re-balance the prices of these credits and reduced compliance for refiners. Andeavor, one of the biggest U.S. refining companies on the west coast, has been issued waivers (exemptions) for three out of ten of their refineries which could save the company $50 million or more in regulatory associated costs. The EPA has authority to exempt smaller refineries under 75,000 barrels per day (bpd) on a case by case basis if they can prove economic hardship from compliance costs with the RFS program. The issue is that with freeing these refiners from the requirements to blend biofuels into their refined products, or purchasing EPA credits for blending would leave tens of millions of dollars annually left on the table, which could negatively affect the biofuel and corn industries respectively. The Trump administration has had meetings over the past few months with lawmakers and lobbyists of both corn and oil to try to come to an agreement on updated terms of the 2005 Renewable fuel Standard and ensure a way both industries can continue to find ways to work together and keep the fuel flowing.  

     Sources:

Categories: Industry Update, RIN, Ethanol, Regulation


Daryl Milliner

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Daryl Milliner

Exemplary customer support and relationship building are my focus. I strive to use all my knowledge and resources to ensure customers’ fuel operations are run seamlessly and efficiently. Keeping customers informed and satisfied is my highest priority.


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