Abbott asks EPA to waive portion of RFS RVO

Texas Gov. Greg Abbott sent a letter to U.S. EPA Administrator Scott Pruitt requesting a waiver of Renewable Fuel Standard blending requirements, claiming the program is negatively impacting the state’s economy and employment.

The letter specifically cites high renewable identification number (RIN) prices as “creating a severe economic hardship for refiners, small retailers, consumers, skilled labor, and others.”

In the letter, Abbott asks the EPA to set the renewable volume obligation (RVO) for D6 renewable fuels to be set no higher than 9.7 percent of the gasoline pool “in order to ensure it is below the blend wall and does not inherently create a shortage of RINs due to already maximized blending capacity.”

The Renewable Fuels Association has spoken out against Abbott’s waiver request. “Gov. Abbott’s waiver request doesn’t come anywhere close to meeting the very high threshold required by the statute for proving ‘severe harm,’” said Bob Dinneen, president and CEO of the RFA. “The truth is, the RFS is helping—not harming—the Texas economy by offering greater consumer choice, lower cost fuels, and thousands of jobs in ethanol production and agriculture. While Texas is always labeled as a big oil and gas state, the RFS has supported a burgeoning renewable fuels industry in the Lone Star state as well. Not only is the state home to four large ethanol plants, it is also home to 199 stations offering E85 and other flex fuels, dozens of stations selling E15, and one of the largest populations of flex fuel vehicles in the nation. Gov. Abbott’s waiver request ignores this critical Texas industry and would undermine the significant economic benefits it offers each and every day.

“In any case, EPA’s threshold for action specifically notes that an impact on any particular industry would not trigger a waiver,” Dinneen continued. “Rather, the agency will look at the impact on the economy as a whole and with ethanol today being less expensive than gasoline, and providing consumers significant savings at the pump, that is a threshold that simply is not met today.

“The waiver request also overlooks a number of important realities regarding RIN credits and the gasoline market,” Dinneen said. “Just two weeks ago, an analysis from Wells Fargo corroborated studies from Harvard University, MIT, the University of Michigan, Iowa State University, and other institutions showing that merchant refiners recoup their RIN costs through higher refining margins. When these facts are properly taken into consideration, it is clear that EPA has no choice but to deny Gov. Abbott’s request for a waiver of the RFS requirements.”