The ball is now completely in the court of newly appointed Environmental Protection Agency (EPA) Administrator Andrew Wheeler. While he was the “Acting Administrator” he promised to reverse the course set by former Administrator Scott Pruitt concerning the wholesale approval of small-refinery exemptions (SREs).
On Wednesday, Iowa Renewable Fuels Association Executive Director Monte Shaw and Iowa Agriculture Secretary Mike Naig discussed the need for a change of course. The future of the Renewable Fuels Standard (RFS) hangs in the balance.
Earlier this year, EPA Administrator Wheeler approved the remaining five SREs which were left from 2017. At the time Shaw noted these were leftovers from the Pruitt era. He was more concerned with the 2018 SRE requests, and if Wheeler would honor his word.
Shaw remarked that the current price on a Renewable Identification Number (RIN) credit is eight cents. If refiners can avoid buying a gallon of ethanol at $1.30 and purchase a RIN for eight cents, there is no economic harm to them.
Last week, EPA Administrator Wheeler told Congress when the EPA wasn’t granting waivers, they were sued three times and lost. Shaw says this is misleading.
Shaw says if the EPA continues the practice of granting every waiver request, then the RFS is dead. Shaw says this is not what Congress or President Trump intended. Iowa is the largest Ethanol producing state. According to a study commissioned by the IRFA, the Ethanol Industry contributes over $5 Billion to Iowa’s economy. Demand destruction puts this contribution in jeopardy.