EPA: 52 ‘gap year’ small refinery exemption petitions filed

By Erin Voegele | June 18, 2020

The U.S. EPA on June 18 released updated small refinery exemption (SRE) data that shows small refiners have filed 52 “gap year” SRE petitions for Renewable Fuel Standard compliance years 2011 through 2018 in an effort to circumvent the Tenth Circuit Court’s January ruling.

That ruling, handed down by the court on Jan. 24, struck down three SREs approved by the EPA and determined that the agency cannot extend exemptions to any small refinery whose earlier, temporary exemptions had lapsed. The decision was challenged by Wynnewood Refining and HollyFrontier in March. That challenge, however, was rejected by the court in early April. If applied nationally, the ruling was expected to limit eligibility for future SRE petitions to a small handful of small refiners. However, reports began to surface in recent weeks that several small refiners were filing gap year SRE petitions in an effort to maintain eligibility for future SREs.

EPA Administrator Andrew Wheeler and U.S. Department of Energy Under Secretary mark Menezes confirmed reports in late May that several small refiners had filed gap year SRE petitions. Those gap year petitions aim to provide the impacted refineries with a continuous chain of SRE approvals, allowing the affected refineries to continue to be eligible for SREs in the future. The EPA’s online SRE dashboard, however, was only updated to reflect those gap filings on June 18.

That dashboard now shows six gap year SRE petitions have been filed for 2011, six have been filed for 2012, 10 have been filed for 2013, 11 have been filed 2014, 10 have been filed for 2015, seven have been filed for 2016 and two have been filed for 2018. All 52 petitions are currently pending. The EPA said that the newly filed SRE petitions include submissions from refineries that are seeking reconsideration of petitions that were previously denied.

An additional 27 SRE petitions for 2019 and one SRE petition for 2020 are also pending. Those petitions, however, were filed earlier in the year and were listed as pending on the EPA’s dashboard on or before May 21.

The EPA also added some data on SREs for compliance years 2011 and 2012 to the online dashboard. Those years were not previously represented.

Several biofuel groups, including the Renewable Fuels Association, Growth Energy, the American Coalition for Ethanol, and the National Biodiesel Board, have issued statement’s strongly condemning the gap year filings and efforts to circumvent the Tenth Court ruling.

“Just when we thought we’d seen everything, the refiners have come up with another new scam to undermine the RFS. This ‘gap year’ waiver ploy is as surreal as it is appalling, and certainly the courts would frown upon EPA flouting another unequivocal decision,” said Geoff Cooper, president and CEO of the RFA. “It is beyond absurd that refiners who didn’t even ask for an exemption or claim hardship in the past are now asking for waivers dating all the way back to 2011. EPA should swiftly deny these waiver requests and immediately adopt the Tenth Circuit decision nationwide. The agency should stop trying to rewrite history and start trying to follow the law.”

Cooper said granting the “gap year” waivers “would be akin to a principal changing a high school senior’s freshman biology grade from an ‘F’ to an ‘A’ four years later so the student can get into college. It’s cheating—plain and simple. Farmers and biofuel producers in states throughout the Heartland are likely to view the granting of any ‘gap year’ waivers as the last straw in an increasingly tenuous relationship with the administration.”

“This absurd maneuver is a blatant attempt to dodge the law at the expense of rural communities,” said Emily Skor, CEO of Growth Energy. “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. It’s an insult to American farmers, biofuel workers, and to rural families struggling to rebuild in the wake of COVID-19 after years of regulatory abuse.
“EPA should reject this attempt to game the system,” Skor continued. “The last thing farm states need is another long legal battle fueling uncertainty in the agricultural supply chain. We agree wholeheartedly with Senator Grassley, who called on regulators to ‘publicly dismiss these ridiculous petitions as soon as possible.’”

“For those of us who have been paying attention to how the Trump administration handles the RFS, it should no longer be shocking or surprising that EPA yet again appears to be aiding and abetting refineries escape their legal responsibility to blend ethanol and other renewable fuels,” said Brian Jennings, CEO of ACE. “While we have been waiting since January for EPA to comply with our victory in the Tenth Circuit Court and limit the number of SREs going forward, it seems the Agency’s priority has instead been to help refiners invent this ‘gap year’ workaround.

“It’s imperative for grassroots biofuel stakeholders and farmers to speak out against this latest attempt to circumvent the law and court decisions before EPA takes action on the 52 ‘new’ retroactive waiver requests,” Jennings continued.

"EPA's consideration of small refinery exemption petitions going back to 2011 flies in the face of the recent 10th Circuit decision,” said Kurt Kovarik, vice president of federal affairs at the NBB. “By rolling back the clock, there appears to be no length EPA won't go to help refiners undermine the RFS. Make no mistake – this handout to the oil industry comes at the expense of biodiesel producers and soybean farmers across the country, and particularly the Midwest. Allowing these gap filings renders the program completely unpredictable for renewable fuel producers. The agency must immediately reject these petitions to restore confidence that it will abide by the law in administering the RFS."

Additional SRE data is available on the EPA website