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API urges EPA not to exempt small refiners from US biofuel mandate

San Antonio (Platts)--13 Feb 2018 1038 pm EST/338 GMT


The American Petroleum Institute has come out against a campaign by small refineries to avoid their obligations under the US biofuel mandate, according to a letter released Tuesday.

More than two dozen refineries with throughput of less than 75,000 b/d have reportedly petitioned the Environmental Protection Agency to get out of the Renewable Fuel Standard's blending requirements based on a provision in the law allowing the agency to make exemptions based on "severe economic harm."

EPA has declined to answer questions about the petitions.

Frank Macchiarola, API's downstream group director, said in the letter to the EPA that the oil industry lobby also disagrees with arguments by the governors of Delaware, Pennsylvania, New Mexico and Texas, who said that refiners in their states are facing severe economic harm from the RFS. The governors pressed EPA for a nationwide waiver to the biofuel mandate.

"Any RFS volume reductions contemplated by the agency must maintain a level playing field in the marketplace, and must apply equally across the whole refining sector," Macchiarola said in the letter to Assistant EPA Administrator William Wehrum.

"The ongoing issues with the RFS program are structural in nature, apply to all regulated parties, and need to be addressed on a nationwide basis. API recommends that EPA should deny the state waivers and should not approve any small refinery exemptions."

Refiner trade group American Fuel & Petrochemical Manufacturers, on the other hand, urged EPA in a letter Tuesday to grant the waivers sought by the governors. The letter took no position on the small refinery petitions.

"AFPM has repeatedly suggested that EPA utilize its various waiver authorities under both the 'severe economic harm' and the 'inadequate domestic supply' provisions cited in the state waiver petitions," AFPM President Chet Thompson said.

Macchiarola said Tuesday during a panel at the Renewable Fuels Association's National Ethanol Conference that reforming the RFS is the top downstream priority for API.

"The RFS needs comprehensive reform," he said.

-- Meghan Gordon, meghan.gordon@spglobal.com

-- Edited by Lisa Miller, newsdesk@spglobal.com




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