The Environmental Protection Agency (EPA) said it will seek comment on letters requesting a waiver of the Renewable Fuel Standard (RFS).
Governors of Arkansas and North Carolina submitted separate requests for a waiver, the EPA stated in a notice. The Clean Air Act allows the administrator of the EPA to waive the national volume requirements of the renewable fuel standard program in whole or in part if implementation of those requirements would severely harm the economy or environment of a state, a region, or the United States, or if the administrator determines that there is inadequate domestic supply of renewable fuel, the EPA said.
A 30-day comment period will begin once the notice is published in the Federal Register.
Here is more from the EPA notice, dated Aug. 20:
The Renewable Fuel Standard (RFS) program began in 2006 pursuant to the Energy Policy Act of 2005 (EPAct), which added provisions for a renewable fuel program, commonly referred to as RFS1. The statutory provisions for the RFS program were subsequently modified through the Energy Independence and Security Act of 2007 (EISA), and EPA published revised regulatory requirements on March 26, 2010 (referred to as RFS2). The transition from the RFS1 requirements of EPAct to the RFS2 requirements of EISA generally occurred on July 1, 2010. EISA establishes annual national renewable fuel volumes required through 2022 for four categories of renewable fuel: cellulosic biofuel, biomass based diesel, advanced biofuel, and total renewable fuel. Though EISA establishes a schedule of increasing national volume mandates over time, it also requires the administrator to set the specific volume requirements for refiners and importers annually. The applicable volume standards under the RFS program for the 2012 compliance year were published in the Federal Register on January 9, 2012 (77 FR 1320).
Under the RFS program, obligated parties, typically gasoline or diesel refiners or importers, are required to meet specific applicable percentage standards to be in compliance. Renewable identification numbers, or RINs, are assigned by the renewable fuel producer to each gallon of qualifying renewable fuel and serve as a means for demonstrating compliance by the obligated parties. Aside from using sufficient current-year RINs to demonstrate compliance in a given year, obligated parties may also choose (a) to use available RINs from the prior year towards the current year’s requirement, up to a 20 percent cap, and/or (b) to carry forward a deficit into the next compliance year.
The Clean Air Act allows the EPA administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, to waive the national volume requirements of the RFS, in whole or in part, upon petition by one or more states, or by any party subject to the requirements of the RFS program. The administrator may also waive the volume requirements on her own motion. A waiver may be issued if the administrator determines, after public notice and opportunity for comment, that implementation of the RFS volume requirement would severely harm the economy or environment of a state, a region, or the United States, or that there is an inadequate domestic supply. If a waiver is granted, it can last no longer than one year but may be renewed by the administrator after consultation with the Secretary of Agriculture and the Secretary of Energy.
Governors of Arkansas and North Carolina submitted separate letters requesting a waiver of required volumes of renewable fuel under the RFS program. EPA is seeking comment on the requests. The Act requires the administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, to approve or disapprove a petition for a waiver of the RFS volume requirements within 90 days after the date on which the petition is received by the administrator.
The Governor of Arkansas submitted a letter dated August 13, 2012 requesting EPA “waive an appropriate volume of renewable fuel” of the Act. The letter includes statements regarding this year’s drought, crop price increases, and impacts in various economic sectors, including the poultry and cattle sectors. The letter submitted by the Governor of North Carolina, dated August 14, 2012, requests that “the applicable volume of renewable fuel be waived” under the Act and also includes statements regarding drought conditions in the United States and economic impacts in the State.
Other organizations and individuals – including among others the governors of Delaware and Maryland, the National Pork Producers Council, the Dairy Farmers of America, and various members of Congress – have also submitted letters either requesting the administrator utilize her authority to waive RFS volume requirements or expressing support for the granting of a volume waiver. All of these letters are available in the docket; any additional similar requests submitted to EPA will also be docketed and considered together with requests already received.
EPA is issuing this notice to solicit comments and information on the waiver requests, and the views of the public on whether the statutory basis for a waiver of the national RFS requirements has been met and, if so, whether EPA should exercise its discretion to grant a waiver.
In 2008, the governor of Texas requested a fifty percent waiver of the national volume requirements for the RFS. EPA denied Texas’ waiver request because the evidence in that case did not support a determination that implementation of the RFS mandate during the time period at issue (September 1, 2008 through August 31, 2009) would have severely harmed the economy of a state, region, or the United States.
EPA’s determination in response to Texas’ waiver request was supported by technical analysis conducted using a model developed by researchers at Iowa State University (ISU). The 2008 analysis evaluated the impact of a waiver of the volume standard by comparing the circumstances with and without a waiver, to identify the impact associated with implementation of the RFS program in the relevant time period. The 2008 Texas waiver determination discusses the reasons EPA utilized the ISU model and provides a brief description of how it operates.
EPA requests comment on any matter that might be relevant to EPA's review of and actions in response to the requests, specifically including (but not limited to) information on: (a) whether compliance with the RFS would severely harm the economy of Arkansas, North Carolina, other states, a region, or the United States; (b) whether the relief requested will remedy the harm; (c) to what extent, if any, a waiver would change demand for ethanol and affect prices of corn, other feedstocks, feed, and food; (d) the amount of ethanol that is likely to be consumed in the U.S. during the relevant time period, based on its value to refiners for octane and other characteristics and other market conditions in the absence of the RFS volume requirements; and (e) if a waiver were appropriate, the amount of required renewable fuel volume appropriate to waive, the date on which any waiver should commence and end, and to which compliance years it would apply.