U.S. supermajors ExxonMobil and Chevron have asked the Environmental Protection Agency (EPA) to waive the obligations for biofuel blending for their smallest refineries—exemptions that are typically granted to small refiners under financial distress, Reuters reports, quoting sources familiar with the matter.
Under the Renewable Fuel Standard (RFS), oil refiners are required to blend growing amounts of renewable fuels into gasoline and diesel. Refiners that don’t have the infrastructure to blend biofuels must purchase tradeable blending credits known as Renewable Identification Numbers, or RINs. The EPA has the authority to grant waivers from the renewable fuel standard to refineries whose oil processing capacity is below 75,000 bpd.
Those waivers have been traditionally given to refiners in hardship, but recently the U.S. Administration seems to have leaned to Big Oil in the battle with Big Corn that has been pitting lawmakers from the big oil states against those of the Midwest farm belt. EPA has reportedly granted an exemption to a large oil refiner, Andeavor.
According to two Reuters sources, the largest U.S. integrated oil companies that turn billions of U.S. dollars in profit have asked for exemption for their smallest refineries—Chevron for its 54,500-bpd refinery in Utah, and Exxon for its 60,000-bpd refinery in Montana.
An Exxon spokesman declined to comment on the report, but Chevron spokesman Braden Reddall—while declining to either confirm or deny his company’s request—told Reuters in a written statement:
“Several competitors have reportedly received exemptions from the RFS.” “If true, any refinery which has not been exempted from the RFS will be at a competitive disadvantage,” Reddall added.
The Big Oil-vs-Big Corn debate over the biofuels standards has heated as reports of such exemptions increased and as the EPA said it would not be disclosing the names of the refiners that had been granted waivers.
Several Republican senators, led by Iowa Sen. Chuck Grassley, commented in a statement on Thursday:
“Recent reports of EPA granting ‘hardship’ waivers meant for ‘small refiners’ to multibillion dollar oil refining corporations raise an embarrassing question. Is it the Administration’s position that companies making billions of dollars in profits are experiencing hardship?”
“EPA is hiding behind poor excuses about proprietary business information to shield big oil companies from public scrutiny,” the Senators said.
Bob Dinneen, head of the Renewable Fuels Association, told Reuters, commenting on the report that Exxon and Chevron want waivers for their smallest refineries:
“For these two behemoth oil companies to claim economic hardship is downright offensive and insulting to the hard-working farm families and ethanol producers that depend on the RFS.”
The previous administrations were giving out exemptions sparingly, but since Scott Pruitt took over as EPA Administrator in 2017, officials have signaled that if refiners submitted waiver applications for their smallest refineries, their requests would be granted, an executive at a refining company, who requested anonymity, told the Houston Chronicle earlier this month.
“Anyone with a brain submitted an application. The EPA was handing out those exemptions like trick or treat candy,” the executive said.
By Tsvetana Paraskova for Oilprice.com
