In wake of SCOTUS decision, legislation defines extension in response to ruling that favored oil refineries over biofuel producers.

Jacqui Fatka, Policy editor

July 5, 2021

4 Min Read

Just one week after a Supreme Court ruling would allow oil refineries who had not received extension in the past to petition for “extensions” of waivers for blending requirements under the Renewable Fuel Standard, a bipartisan bill in the House clarifies the definition to more closely align with what legislators say is the original Congressional intent.

Reps. Angie Craig, D-Minn., and Randy Feenstra, R-Iowa, introduced the Small Refinery Exemption Clarification Act of 2021. The bipartisan legislation would clarify that only oil refineries that have been continuously receiving small refinery exemptions since 2011 would be eligible to petition for extensions from renewable fuel blending requirement exemptions.

The Renewable Fuel Standard is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels by mandating that oil refiners blend billions of gallons of biofuels into their fuel each year or buy credits from those that do.

Related: Supreme Court RFS ruling favors small oil refineries

Over the past four years the previous administration granted 86 waivers to “so-called small refineries” that resulted in the loss of 4 billion gallons of ethanol that was mandated to be blended into the fuel supply.

“This legislation will help ensure transparency and predictability for family farmers and biofuels producers in Minnesota and across the country as they make important decisions based on the Renewable Fuel Standard,” says Craig.

Feenstra adds that the biofuels industry is an important driver of economic growth, supporting hundreds of jobs and expanding market options for corn and soybean growers. “That is why we must erase ambiguities and ensure oil refineries are not able to take shortcuts when it comes to blending biofuels,” he says.

The bipartisan bill is supported by the Iowa Renewable Fuels Association, Growth Energy, the Renewable Fuels Association, the National Corn Growers Association and the National Farmers Union.

The Small Refinery Exemption Clarification Act seeks to correct a flaw in the small refinery exemption program regarding who is eligible. The RFS always intended to blend more low-carbon biofuels into our domestic fuel supply every year.

Emile Skor, CEO of Growth Energy, explains, “We firmly believe that refiners have had 16 years to adjust their operations to comply with the RFS, and that EPA’s SRE authority was meant to steer them toward compliance rather than provide a never-ending excuse to avoiding their blending obligations.

“Legislation like this will help stabilize demand in our industry, so we can continue to produce low-carbon biofuels, provide clean energy jobs in rural areas and achieve our nation’s climate reduction goals,” adds Skor.

Geoff Cooper, president and CEO of Renewable Fuels Association, says as they argued before the Supreme Court, they believed Congress always intended the small refinery exemption to be temporary in nature.

“We also continue to believe the statute only allows EPA to extend exemptions for refineries that were continuously exempt, but only if they can prove disproportionate economic hardship will be caused solely by RFS compliance,” says Cooper. “We strongly agreed with Justices Barrett, Kagan, and Sotomayor that ‘EPA cannot ‘extend’ an exemption that a refinery no longer has,’ but unfortunately their six colleagues didn’t see it that way. Thus, we applaud Representatives Feenstra and Craig for introducing this bill that would erase any lingering doubts about the intended meaning of ‘extension’ and clarify once and for all that exemptions were meant to be temporary.”

“By clarifying the eligibility criteria for exemptions, this bill will strengthen the RFS and help meet all its worthy objectives,” adds Rob Larew, National Farmers Union president. “Over the past several years, the lenient approach to granting exemptions for the Renewable Fuel Standards has undermined the intent of the program – which is to curtail greenhouse gas emissions, reduce our reliance on foreign oil, and create new opportunities for America's family farmers and rural economies.”

Those in the biofuels industry also support the House and Senate versions of the RFS Integrity Act, H.R. 1113 and S. 1792 respectively, bills which would add deadlines for refinery SRE petitions so EPA can properly account for them in future year RVOs. The legislation would also improve transparency in the SRE process by requiring petitioners to publicly disclose basic identification information. 

In addition, several letters led by Democrat and Republican members in both chambers were written to the White House, EPA, and USDA on the market implications of SRE authority abuse. 

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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