Environmental Protection Agency Administrator Scott Pruitt is getting hit from all sides over his handling of the nation’s ethanol mandate and the potential for major changes to the program.
“We are on the verge of seeing 4 percent annualized GDP — something your detractors said would never happen,” Dan Eberhart, a Trump donor and president of Canary, one of the largest oil services firms in the country, wrote in a letter to President Trump on Thursday.
But “we won’t get there if you allow your EPA Administrator to repeat the mistakes of the past by picking winners and losers via executive fiat,” Eberhart wrote.
Eberhart is protesting reports that the EPA is poised to order refiners to blend more ethanol in 2019 to make up for the agency granting “hardship” waivers to dozens of refiners to help them reduce the cost of blending ethanol in gasoline.
“On behalf of the hundreds of American workers of Canary LLC, I write to urge you to ensure that Administrator Pruitt and the EPA do not include a reallocation of blending obligations that were waived under the small refinery exemption program to other refiners,” Eberhart said.
The EPA is poised to release the 2019 annual blending requirements for refiners as soon as Friday. The EPA is required by law to finalize the requirements each year by November.
Refinery industry representatives in Washington say it would be illegal for Pruitt to reallocate the waived ethanol requirements in 2019.
“Just a few days ago, EPA made a clear statement: Dealing with reallocation of small refiner exemptions on a retroactive basis is illegal. Period,” said Scott Segal, partner at Bracewell Law, representing the industry.
But other industry representatives confirmed that reallocating the requirements in next year’s targets is coming directly from the EPA. One source said only direct intervention by the White House could remove that plan at this point.
Reuters reporter Jarrett Renshaw tweeted on Thursday that a planned event Friday with Pruitt and Agriculture Secretary Sonny Perdue in Missouri to announce the 2019 renewable fuel requirements has been canceled. Any “final decision on reallocation” will have to come from the White House and the president, he tweeted.
On the other side of the argument are the farmers and the ethanol producers. Pruitt also got a strongly worded letter from a dozen of the industry’s Democratic supporters in Congress on Wednesday.
“The Environmental Protection Agency (EPA) continues to hurt farmers and undermine the biofuels market by extending waivers to an unusually large number of refineries,” read the letter led by the Iowa delegation’s Democrats. “Additionally, your implementation of the RFS program is undercutting the market for renewable fuels, and inflicting further economic pain in rural communities and throughout the agriculture sector.”
Their gripe is the opposite of Eberhart’s. They want Pruitt to end the practice of granting waivers to oil refiners. That has reduced demand for ethanol by more than one billion gallons.
Sen. Joni Ernst, R-Iowa, said at a confirmation hearing for two EPA officials that she expected them to keep their word when making promises on policy, especially when it comes to the nation’s farmers and ethanol program.
“Unfortunately, there have been instances where I’ve been made promises by the EPA, even in writing, only to have them reneged upon,” Ernst said to the nominees. “I’m told one thing, and then find out in a press report that the EPA is doing exactly what they told me they wouldn’t do.”
[Also read: Jim Inhofe ’embarrassed’ he doubted Scott Pruitt on ethics scandals]
Ernst also brought up Pruitt’s recent spate of ethical scandals in stressing the need for integrity from EPA officials. “Excessive and unnecessary spending, unacceptable uses of agency resources, the list goes on and on,” said Ernst, referring to Pruitt’s list of ethical missteps. “It is important to understand what the courses of action are if you do witness additional impropriety.”
Senate Environment and Public Works Committee Chairman John Barrasso, R-Wyo., said Thursday that he expects Pruitt to continue to provide relief for refiners in the 2019 Renewable Fuel Standard. “EPA must not take any steps that would limit the ability of small refineries to obtain hardship relief in the future,” Barrasso said. “That includes restricting when they can apply for hardship relief or increasing the burdens on other refineries in the process.”
Bob Dinneen, the ethanol industry’s top lobbyist and head of the Renewable Fuels Association, welcomed the letter from the Democrats, saying it will help the industry in court.
“We appreciate the effort of these members to bring attention to EPA’s woeful disregard of the statute and its indiscriminate granting of hardship waivers,” Dinneen said.
He also noted EPA’s “lack of transparency” in granting relief to oil refineries under the small refinery hardship waiver process. That prompted Dinneen’s group to file a Freedom of Information Act request to obtain the details. But that has been met by “complete silence.”
