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API urges EPA not to exempt small refiners from US biofuel mandate

The American Petroleum Institute has come out against a campaign by smallrefineries to avoid their obligations under the US biofuel mandate, accordingto a letter released Tuesday.

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More than two dozen refineries with throughput of less than 75,000 b/dhave reportedly petitioned the Environmental Protection Agency to get outof the Renewable Fuel Standard's blending requirements based on a provision inthe law allowing the agency to make exemptions based on "severe economicharm."

EPA has declined to answer questions about the petitions.

Frank Macchiarola, API's downstream group director, said in the letter tothe EPA that the oil industry lobby also disagrees with arguments by thegovernors of Delaware, Pennsylvania, New Mexico and Texas, who said thatrefiners in their states are facing severe economic harm from the RFS. Thegovernors pressed EPA for a nationwide waiver to the biofuel mandate.

"Any RFS volume reductions contemplated by the agency must maintain alevel playing field in the marketplace, and must apply equally across thewhole refining sector," Macchiarola said in the letter to Assistant EPAAdministrator William Wehrum.

"The ongoing issues with the RFS program are structural in nature, applyto all regulated parties, and need to be addressed on a nationwide basis. APIrecommends that EPA should deny the state waivers and should not approve anysmall refinery exemptions."

Refiner trade group American Fuel & Petrochemical Manufacturers, on theother hand, urged EPA in a letter Tuesday to grant the waivers sought by thegovernors. The letter took no position on the small refinery petitions.

"AFPM has repeatedly suggested that EPA utilize its various waiverauthorities under both the 'severe economic harm' and the 'inadequate domesticsupply' provisions cited in the state waiver petitions," AFPM President ChetThompson said.

Macchiarola said Tuesday during a panel at the Renewable FuelsAssociation's National Ethanol Conference that reforming the RFS is the topdownstream priority for API.

"The RFS needs comprehensive reform," he said.

-- Meghan Gordon, meghan.gordon@spglobal.com

-- Edited by Lisa Miller, newsdesk@spglobal.com