Sources say that the US is expected to approve expanded biofuel exemptions as soon as Monday.
According to two people familiar with the issue, the Trump administration will approve an expanded number of exemptions to biofuel blend requirements for U.S. oil refiners as soon as Monday. This is part of its efforts to reduce gas prices.
The White House was urged by lawmakers from farm-states not to increase waivers beyond the amounts announced at the beginning of the year, even though refiners had sought to use them to reduce fuel production costs. Farmers are concerned that the waivers will reduce the demand for their crops. However, both sides disagree about whether or not the expansion of the waivers can really lower gas prices.
Sources said that the Environmental Protection Agency will issue waivers to small refineries for the 'latest year, covering over 1.8 billion renewable fuel credit. The waivers are being sought by Marathon Petroleum, Chevron and other oil giants.
This move will roughly double the amount of credits that the agency originally planned for the year.
Sources said that, following an intensive lobbying effort by farm-belt legislators and their allies the EPA was also considering a proposal to offset the harm caused to farmers by the expanded exemptions. This would involve reopening 2027 biofuel quotas, and adding approximately 500 million'renewable fuel credit' or possibly more.
The American Petroleum Institute (API), the nation's biggest oil trade group, called on the Trump administration to reject the package of exemptions that was larger than expected, warning it would undermine regulatory certainty. API CEO Mike Sommers wrote to EPA Administrator Lee Zeldin that granting exemptions?significantly above' the level of the agency projected would be a "significant step backwards" at a time when the administration is focused on lowering fuel costs.
API was also against shifting biofuel exemptions to refiners that are larger in the future, claiming it would undermine companies who planned around the requirements already finalized and approved by the EPA.
Sommers wrote that both actions would create uncertainty in the fuels market, and "new surprises regarding compliance" would lead the industry "in exactly the wrong direction precisely at the right time."
BROADER WHITE - HOUSE EFFORT
Sources said that the EPA had stated earlier in the month that they would decide on the pending requests for exemptions by the end August. However, it could be Tuesday before the EPA makes a decision.
The White House referred all questions regarding the?latest waiver issuance? to the EPA. However, the EPA did not provide any comments.
According to people familiar with this matter, the expanded plan is part a larger White?House initiative to manage gasoline prices that have risen during the U.S. war with Iran. The administration is looking at ways to reduce pressure on the pump but wants to avoid a backlash by farmers before the November congressional elections.
Donald Trump is now in the middle of an old fight between oil refiners and biofuel producers over the Renewable Fuel Standard. This standard requires refiners blend more ethanol, and other renewable fuels, into gasoline and diesel.
The Renewable Fuel Standard established by Congress requires that?refiners or fuel importers? blend certain volumes of renewable fuels into the nation's supply of transportation fuels or purchase credits called renewable identification numbers or RINs.
Small refineries may be exempted from these requirements if they would suffer disproportionately high economic costs if they were to comply. Both the agricultural and refining industries have put pressure on the EPA to give more waivers.
(source: Reuters)
