The three smallest of Andeavor’s ten oil refineries are now exempt from US biofuels legislation. The ‘hardship’ waiver is meant to protect smaller refiners from being disproportionately impacted by the Renewable Fuel Standard (RFS). Last year, Andeavor posted $1.5 billion in net profits.
The exemption allows Andeavor to disregard legislation requiring it to blend ethanol into its gasoline or having to buy Renewable Identification Numbers (RINs) from blenders to demonstrate compliance with the RFS. This kind of waiver is granted where the RFS would ‘impose a disproportionate economic hardship on small refineries’.
According to Reuters, this is the first sign of the EPA freeing large refiners from their ethanol blending obligations. These waivers are often granted in secret, raising questions about other profitable companies receiving waivers for their smaller refineries. Under the Clean Air Act, ‘small refinery’ is defined as one that produces less than 75,000 barrels of oil per day.
The wire service reported that the waiver could reduce the regulatory burden on Andeavor by over $50 million (€40.7 million).
Commenting on the waiver, The American Coalition for Ethanol (ACE) CEO Brian Jennings said in a statement: “On what planet does Andeavor’s 2017 net profit of $1.5 billion constitute ‘disproportionate economic hardship’ for a “small refiner”? Refiners are reporting billion-dollar profits today while farmers are facing their fifth year of prices at or below the cost of production. Net farm income is dropping to levels not seen since the last economic disaster in rural America in the early 2000s which prompted Congress to enact the RFS in the first place. EPA’s recent waivers reduce demand for ethanol making economic conditions worse in rural America and breaking promises President Trump has made to protect the RFS.”
EPA spokesperson Liz Bowman told Biofuels International in an emailed statement: “The criteria used to grant waivers has not changed since previous administrations. EPA follows a long-standing, established process where the Agency uses a DOE analysis to inform decisions about refiner exemptions/waivers. These waivers are only considered for refineries that submit applications and that are below the blending threshold.”
Andeavor declined to comment on the waiver or ACE’s criticism.
This article was corrected 10:30 01/05/2018, The RFS defines as small waiver as one that produces less than 75,000 barrels of oil per day, not per year.