EPA rejects requests to reconsider RFS point of obligation

The US Environmental Protection Agency formally rejected the American Fuel & Petrochemical Manufacturers and several independent refiners’ requests that it reconsider their suggestions to move the federal Renewable Fuels Standard’s point of obligation farther downstream.

The US Environmental Protection Agency formally rejected the American Fuel & Petrochemical Manufacturers and several independent refiners’ requests that it reconsider their suggestions to move the federal Renewable Fuels Standard’s point of obligation farther downstream.

EPA’s action late on Nov. 22 was not a complete surprise since it previously said it would consider denying the original petitions more than a year earlier (OGJ Online, Nov. 11, 2016). It also sought comments and AFPM and the refiners asked the agency to reconsider its proposed denial. The latest action essentially made the rejection final.

“In evaluating this matter, EPA’s primary consideration was whether or not a change in the point of obligation would improve the effectiveness of the program to achieve Congress’s goals. EPA does not believe the petitioners or commenters on the matter have demonstrated that this would be the case,” it said.

“At the same time, EPA believes that a change in the point of obligation would unnecessarily increase the complexity of the program and undermine the success of the RFS program, especially in the short term, as a result of increasing instability and uncertainty in programmatic obligations,” the agency said.

“We are disappointed with [EPA Administrator E. Scott Pruitt’s] decision to maintain the status quo and perpetuate a failed RFS policy that harms US refineries, threatens thousands of jobs, and raises fuel prices for consumers,” AFPM Pres. Chet Thompson told OGJ.

“Moving the point of obligation is a commonsense adjustment that would make the RFS more equitable and benefit consumers,” Thompson said. “AFPM calls on Congress to take prompt action to address the chronic problems caused by the failed RFS.”

Sees ‘numerous misstatements’

Valero Energy Corp., one of the downstream independents that asked EPA to move the point of obligation, confirmed in a statement that EPA’s Nov. 22 final denial was not surprising. “That said, the document's numerous misstatements regarding implementation of the RFS, the dynamics of the fuel market, and data and studies readily available to the agency in its own administrative record, are of course disappointing,” it said.

“At least EPA acknowledges its ability to address the issue if it so chooses. By finalizing its decision, EPA has now opened more opportunities for judicial review,” Valero said.

The American Petroleum Institute welcomed EPA’s latest action. “Now, we need to turn our attention to repealing and or significantly reforming the ethanol mandate which was instituted when America’s energy picture was very different,” API Downstream Group Director Frank Macchiarola said.

“Without real reform today, consumers could be forced to pay more at the pump and at the repair shop because the majority of vehicles on the road today were not designed to use higher blends of ethanol in gasoline,” Macchiarola warned. “We continue to urge Congress to pass legislation to fix the ethanol mandate so that the consumers are provided with real choice in the marketplace.”

Contact Nick Snow at nicks@pennwell.com.

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