Washington — Small refinery waivers to the US biofuel mandate have not hurt ethanol demand, Environmental Protection Agency Administrator Andrew Wheeler told Congress on Thursday.
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"We've seen an uptick in ethanol over the last two years," Wheeler told the House Committee on Science, Space, and Technology.
S&P Global Platts Analytics expects US ethanol consumption to slip to 14.348 billion gallons in 2019, compared with 14.382 billion gallons in 2018, according to US Energy information Administration data.
EPA's waivers to refineries that process less than 75,000 b/d of crude have been at the center of the latest fight between biofuel makers and oil refiners.
Top White House advisers have been working for the past two weeks to broker a deal, with senators from oil states expected at the White House later Thursday.
Anger in farm country over the Renewable Fuel Standard waivers and the impact of the US-China trade dispute has gotten the attention of President Donald Trump, who is counting on Midwestern states for his re-election campaign. On August 29, Trump promised a "giant package" that would benefit the biofuel industry.
The latest battle flared up August 9, when the EPA issued 31 waivers exempting smaller refineries from the RFS.
Biofuel makers argue the waivers have gutted demand and led to a wave of ethanol plant closures, while oil refiners argue they have not hurt ethanol production, sales, or demand.
S&P Global Platts Wednesday assessed D6 ethanol RINs for 2019 compliance at 25 cents/RIN and 2018 credits at 15 cents/RIN. On August 9, when the latest waivers were announced, D6 RINs were at 19.75 cents/RIN for 2019 and 15.5 cents/RIN for 2018.
RINs are tradable credits EPA issues to track production and use of alternative transportation fuels. For corn-based ethanol, one gallon of ethanol yields one RIN.
EPA has until the end of November to issue its final 2020-21 RFS volumes, but biofuel industry sources said the Trump administration would need to take action in the coming weeks to prevent more ethanol plant closures.
In July, EPA proposed a 2020 biofuel mandate of 20.04 billion gallons, up less than 1% from this year. Renewable fuel would make up 10.92% of US transportation fuel supply next year before any refinery waivers, if volumes are approved as proposed.
The conventional ethanol mandate would remain at 15 billion gallons. The biofuel industry had hoped for a 2020 conventional ethanol mandate of 15.5 billion gallons, after an appeals court ruled in 2017 that EPA had improperly waived 500 million gallons in the 2016 mandate.
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