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EPA's Wheeler Responds to Renewable Fuel Standard Questions

The Senate Committee on Environment and Public Works held its confirmation hearing for acting Environmental Protection Agency Administrator Andrew Wheeler on January 16th. The Renewable Fuel Standard (RFS) was a significant part of the discussion. 
 
Several corn-belt senators—Joni Ernst (R-IA), Mike Rounds (R-SD), and Tammy Duckworth (D-IL)—focused particularly on two RFS issues: year-round sales of E-15 and small refinery exemptions. Both sought administrative changes by EPA that would favor corn growers and ethanol producers.
 
Gasoline containing up to 15 percent ethanol (E-15) has been introduced into the market, but the Clean Air Act effectively forbids summertime use of anything above E-10 in many metropolitan markets. President Trump has promised that his EPA will change the rules to allow year-round E-15 use. 
 
Supporters say doing so would greatly increase the use of ethanol in the fuel supply, while critics argue that E-15 sales are being held back by a lack of consumer demand, which are due in part to concerns about engine damage from the fuel, and not from any legal or regulatory impediments. Wheeler responded that his agency is trying to get the E-15 rule done before the summer, but that the government shutdown has slowed down progress.
 
The same senators also brought up the rise in small refinery exemptions, in which refineries that process less than 75,000 barrels per day and can demonstrate hardship complying with the RFS are granted exemptions from its requirements. The sharp increase in these exemptions in the last two years has effectively brought down the unrealistically high volumes in the RFS. By doing so, these exemptions have reduced compliance costs to all refiners and ultimately consumers. Wheeler heard suggestions that the granting of such exemptions should be tightened up, but he did not commit to any major changes.
 
Comprehensive RFS reform was introduced late last year but is unlikely to move in the new Congress, so these piecemeal administrative changes may be all that happens for the foreseeable future. Sen. Kevin Cramer (R-ND) brought up some of the larger issues regarding the future of the program, and in particular the fact that after 2022 EPA has much greater latitude in setting the RFS targets and timetables. With regard to any long term changes to the program, Wheeler said that it is up to Congress to provide legislative direction to the agency.