Pennsylvania Gov. Tom Wolf (D) sent a request to US President Donald Trump on Oct. 20 to ask US Environmental Protection Agency Administrator E. Scott Pruitt to waive obligations under the Renewable Fuels Standard for Philadelphia-area refiners.
Noting that refiners and other obligated parties are required to submit Renewable Identification Numbers (RIN) to EPA to demonstrate compliance with the RFS, Wolf said merchant refiners in the Northeast are not able to acquire enough of the credits to meet their obligations and have to purchase them on the secondary market, where prices have increased significantly.
“What once was envisioned as a low to zero-cost tool necessary to ensure compliance with the RFS has increased dramatically in cost due to speculation and trading on an unregulated market,” Wolf said.
RIN prices held relatively steady in the first few years following the RFS’s passage, but skyrocketed in recent years, dramatically increasing northeastern refiners’ costs and putting their economic viability—and thousands of well-paying jobs—at risk, Wolf said.
“According to Philadelphia Energy Solutions, the cost of purchasing sufficient RINs to comply with the RFS now exceeds its total payroll costs,” he told Trump. “Clearly, this was not anticipated when the RFS was conceived and passed into law. I am concerned that high RIN prices and the volatile market may lead to the closure of one or more of these merchant refiners, which would be devastating to the regional economy.”
Wolf said EPA has authority under the Clean Air Act to waive, in whole or part, renewable fuel volume obligations when the administrator determines that their implementation would have a severe impact on a state or regional economy as well as the US economy overall.
“Absent this waiver, the Northeast and specifically Pennsylvania will experience significant economic impacts, in that the nation’s refinery sector may be almost eliminated in this part of the country, negatively affecting the manufacturing sector, the commonwealth, and regional economies,” he warned.
Issues surrounding the RFS are complex, but the need to save well-paying, family-sustaining jobs is not, Wolf said. “I urge you to do all that you can to take steps to ensure that the refineries and their jobs are not jeopardized or eliminated,” he said.
Contact Nick Snow at [email protected].