Email
Password
Remember meForgot password?
    Log in with Twitter

article imageGiant refiner gets EPA 'hardship' exemption from biofuel rules

By Karen Graham     Apr 4, 2018 in Business
San Antonio - The Environmental Protection Agency has exempted oil refiner Andeavor from complying with U.S. biofuels regulations, a waiver historically reserved for small operations in financial trouble, Reuters reports.
San Antonio-based Andeavor, formerly known as Tesoro Corporation, is a highly profitable multi-billion dollar global Fortune 500 company employing over 13,000 employees worldwide.
According to a Reuters investigation, last year the company listed $1.5 billion in net profits, so it does raise the question of how a profitable giant refinery could possibly get a "hardship waiver" from the EPA thanks to federal biofuel regulations.
According to the San Antonio Business Journal, the EPA "quietly issued the waivers to the San Antonio-based refining company a month ago."
While Andeavor officials have declined to comment — It was learned that three of the company's refineries, located in Salt Lake City, Utah, Mandan, North Dakota and in Dickinson, North Dakota were given waivers. Another refinery in Gallup, New Mexico, was not included on the list of facilities using less than 75,000 barrels of crude oil a day.
EPA Biofuels regulations
When Congress established the Renewable Fuels Standard, or RFS, through the Energy Policy Act of 2005, the Environmental Protection Agency was delegated the powers of establishing and implementing regulations for ensuring that the nation's transportation fuel supply contained the mandated biofuel volumes.
The EPA can grant waivers to small refineries with a capacity of under 75,000 barrels per day if the company can demonstrate financial hardship, but the EPA is reluctant to do this. In the four years before 2016, the agency only granted 29 waivers, and this averages about eight per year, according to Reuters.
Just a portion of the ExxonMobil oil refinery in Baton Rouge  Louisiana  the nation s fourth largest...
Just a portion of the ExxonMobil oil refinery in Baton Rouge, Louisiana, the nation's fourth largest.
Adbar
Back in January of this year, the Renewable Fuels Association (RFA), in a letter sent to Reuters, expressed concern that if the EPA relaxes its standards it would be violating the program's goals of boosting use of renewable fuels.
"RFA is concerned that virtually any refiner with crude throughput of less than 75,000 barrels of crude per day could be granted the small refiner exemption - roughly 10 percent of all domestic refining capacity," read the letter.
Andeavor's waivers were done very quietly
Based on the number of biofuel credits Andeavor sold into the market recently, the waivers could reduce Andeavor’s regulatory costs by more than $50 million this year this year alone. Biofuel credit prices tied to ethanol dropped by 6 cents, to 38 cents each, after Reuters reported Andeavor’s exemption, while Andeavor shares rose by more than one percent.
Seeking Alpha raises a good question: What's going to happen if other big and profitable oil companies with small refineries such as Exxon Mobil, Chevron, and Phillips 66 also have or could receive the waivers?
The Renewable Fuels Association President and CEO Bob Dinneen is clearly upset at the news. “EPA has struck again," Dinneen said in a statement. "It appears the agency has initiated a fire sale on RFS demand. Providing a small refiner waiver to a company like Andeavor is laughable and abandons the commitment of President Trump to protect the RFS. This is an outrageous abuse of the statute.”
More about andeavor refineries, biofuels regulations, Epa, Exemption, hardship cases
 
Latest News
Top News