March 25, 2020 / 8:16 AM / 2 months ago

'Astonishing': Trump EPA backs down on biofuel waivers in blow to U.S. refiners

(Reuters) - The Trump administration has decided not to appeal a court ruling that would sharply reduce its use of waivers exempting refineries from the nation’s biofuels regulation, cheering the corn lobby but drawing anger from oil refiners.

FILE PHOTO: Choices at the gas pump including ethanol or no ethanol gas are seen in Des Moines, Iowa, U.S., January 29, 2020. REUTERS/Brian Snyder

The administration had until the end of March 24 to file a challenge, but by early March 25, no such filing had been entered, according to a case docket on the U.S. government’s electronic access service for court records.

Officials for the Environmental Protection Agency and the White House did not respond to requests for comment on Wednesday.

The decision appears to end a years-long battle between the rival oil and corn industries, two crucial political constituencies for President Donald Trump, over the waiver program. Refiners argue the waivers are crucial to keeping small refining facilities in business, but agriculture representatives say they have been overused and hurt farmers by eroding demand for corn-based ethanol.

The stakes have only grown recently, as both industries are hard-hit by the economic impact of the coronavirus pandemic.

Under the U.S. Renewable Fuel Standard, refiners are required to blend billions of gallons of ethanol into their gasoline every year. But the EPA, which administers the program, can give out waivers to small facilities that prove that compliance would put them in financial straits.

The Trump administration has roughly quadrupled the number of waivers the EPA grants to refiners. Reuters reporting has shown that some of those waivers have been going to small facilities owned by huge, profitable companies like Exxon Mobil and Chevron Corp, as well as to operations owned by billionaire Trump ally Carl Icahn.

The waiver program was cast into question in January after the 10th Circuit Court of Appeals ruled that the Trump administration had been too free with the waivers and set a standard for the exemptions that would greatly reduce the numbers of waivers the EPA can grant.

Since the ruling, the EPA has been in deliberations with the White House and the Department of Justice over how to respond.

The country’s main lobby group for oil refiners blasted the EPA’s decision not to challenge the court ruling.

“It is astonishing that President Trump has abandoned our country’s small-refinery workers and the communities that rely on these critical facilities in this time of national crisis and economic uncertainty,” said Chet Thompson, head of the American Fuel & Petrochemical Manufacturers group.

Refiners involved in the court case have asked for a rehearing, but it is unclear if the requests would be granted in the absence of support from the EPA.

The biofuels industry, meanwhile, cheered the decision.

“Requesting a re-hearing would have only prolonged uncertainty in the marketplace and exacerbated the pain and frustration already being experienced in the Heartland,” said groups including the Renewable Fuels Association in a statement.

Sources had told Reuters earlier this month that the Trump administration was likely to adhere to the court’s ruling and apply it nationally. The agency, meanwhile, was discussing the possibility of other measures to ease the financial burden on refiners, the sources said.

Such measures could include price caps on biofuel blending credits that refiners must earn or purchase to show compliance with the RFS, according to the sources.

Reporting by Richard Valdmanis and Stephanie Kelly; editing by Barbara Lewis and Steve Orlofsky

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