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Report: EPA grants Exxon Mobil hardship waiver from biofuel blending mandates

Oil major Exxon Mobil Corp. was granted a financial hardship waiver by the U.S. Environmental Protection Agency this year, freeing its 60,000-barrel-per-day Billings, Mont., refinery from U.S. biofuel blending mandates during the 2017 compliance period, Reuters reported Dec. 19.

The Renewable Fuels Standard Program, administered by the EPA, requires U.S. refiners to blend an increasing volume of biofuels such as ethanol into the transportation fuels they produce each year, escalating to 36 billion gallons by 2022.

The EPA sets annual renewable volume obligations each year based on overall volume requirements and projections of gasoline and diesel production, and refiners must purchase credits known as Renewable Identification Numbers to meet volume requirements for the quantity of biofuel they are unable to blend.

Federal law allows the EPA to grant hardship waivers to any refinery that processes under 75,000 bbl/d of crude oil by weighing the financial condition of the refinery rather than the company that owns it, a policy ethanol proponents have criticized.

In 2017, Exxon Mobil grew earnings two and a half times year over year to $19.71 billion, or $4.63 per diluted share.

The EPA does not disclose information about specific hardship waivers, but information on the government agency's website through Nov. 10 shows the Trump administration has been more liberal in granting the waivers.

According to the most recent data from the EPA, for the 2013-2015 compliance years, the Obama administration granted waivers accounting for no more than 1.7% of a given compliance year's total renewable volume obligation, denying 18 of the 43 requests it received.

For 2017, the Trump administration granted 29 of the 36 waiver requests it received and is still weighing another seven requests. It is not clear whether the EPA included Exxon Mobil's waiver request in its reported figures.

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U.S. refiners have outlined huge savings from the waiver program, which the U.S. ethanol industry has challenged in federal court.

While the refining industry has lauded the waivers, industry executives remain wary of exposure to an opaque market they see as driven by politics.

The Trump administration unveiled a proposal in October to increase the ethanol blending limit from 10% to 15%, seen by some as a way to increase the volume of biofuels in the nation's motor fuel pool while limiting increases in compliance costs.