Oklahoma Gov. Kevin Stitt and four other governors have yet to hear from the White House about their request to grant waivers for small oil refineries from meeting EPA biofuel requirements.
In return, some two dozen U.S. Senators also sent a letter to the President urging him not to comply with the governor’s request. They too have not received a response in the fight over corn and ethanol.
It’s the latest chapter in a perennial war between ethanol producers, corn growers, and politicians from the Midwest on the one hand, and oil refiners and their allies from the Gulf Coast and Pennsylvania on the other according to Oilprice.com.
The global pandemic and the collapse of oil prices has devastated both sides. Demand for ethanol tracks gasoline consumption, so the steep drop in fuel consumption has hit ethanol producers very hard. But refiners are also curtailing processing and shutting down some facilities temporarily as demand has fallen off of a cliff.
In mid-April, a group of five governors from oil-producing states sent a letter to the EPA, asking for waivers from the Renewable Fuel Standard (RFS), which requires oil refiners to buy a certain amount of ethanol each year and blend it into the nation’s fuel mix.
“The macroeconomic impacts of COVID-19 have resulted in suppressed international demand for refined products, like motor fuels and diesel,” wrote Texas Gov. Greg Abbott (R), Oklahoma Gov. Kevin Stitt (R), Utah Gov. Gary Herbert (R), Wyoming Gov. Mark Gordon (R) and Louisiana Gov. John Bel Edwards (D). Requirements to purchase ethanol “present[s] a clear threat to the industry under such circumstances,” they wrote.
Refining runs declined from 15.8 million barrels per day (mb/d) for the week ending on March 20 to 12.45 mb/d in mid-April. “[W]e are at a point now where costs must be minimized to keep these vital national security assets operating,” Geoff Moody, vice president of government relations at the American Fuel and Petrochemical Manufacturers, a lobby group for refiners, wrote on the group’s website in April. He said there is a “need for a waiver” from the RFS.
In this zero-sum war between ethanol and refiners, Corn States are pushing back. Support for ethanol has bipartisan support in the Midwest, and writing to President Trump, a group of 24 Senators warned against a waiver. “Waiving the RFS would cause further harm to the U.S. economy, especially our most vulnerable rural communities,” the letter said. More than 70 corn ethanol facilities, representing 6.1 billion gallons of ethanol, have been idled. Another 70 have curtailed processing rates, according to the Senators.
Source: Oilprice.com
