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All refiners must blend more biofuels… except one

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Michael Bastasch Contributor
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There can be only one — refinery that doesn’t have to follow a new federal mandate, that is.

The Environmental Protection Agency has exempted only one refinery in the entire country from blending 16.55 billion gallons of renewable fuels into the fuel supply for 2013.

The federal blending mandate, called the Renewable Fuel Standard, requires that refiners blend 36 billion gallons of renewable fuels into the fuel supply by 2022. This year, the EPA opted to ratchet up the standard, requiring that 16.55 billion gallons of renewables be blended into gasoline despite complaints that the refining industry is near the outer limits of what it can safely blend.

“EPA has approved a single small refinery/small refiner  exemption for 2013, so an adjustment has been made to the standards to account for this exemption,” reads the EPA’s final rule.

The EPA may grant exemptions to federal blending requirements depending on how much crude oil is refined by refiners per day or on a “case-by-case” by the agency, if it is found that the refiner would face disproportionate economic hardship.”

“EPA has granted some exemptions pursuant to this process that apply in 2011 and 2012. EPA has granted one exemption for 2013,” according to EPA.

The EPA did not disclose exactly which small refinery was granted an exemption from the RFS, but critics jumped on the announcement as more evidence of special favors being granted by the Obama administration.

“The public should want to know too. Washington is rife with secret deals that reward select corporate players, and the numbers have only accelerated under this “most transparent” of administrations,” writes the Wall Street Journal’s Kimberley Strassel. “If the process by which the EPA issued this exemption was aboveboard, it should have no problem divulging details. Until that time, the public might fairly assume funny business.”

The EPA also adjusts the blending mandate to reflect such exemptions, meaning that all of the other refineries in the country must blend more due to one of them being exempt.

“Of the nation’s 143 refineries, one (and only one) lucky player somehow had the pull to win itself a free pass from this government burden,” Strassel writes. “Not only that, the rest of the industry gets to pick up its slack.”

Strassel obtained a 2011 EPA document that showed the agency granted 13 exemptions to small refineries for 2011 and 2012. Those 13 had been recommended by a Energy Department Study which found that “some small refineries would suffer a disproportionate hardship” from the RFS.

“Dozens of small refineries are being crushed by the mandate, and a number have petitioned the EPA for exemptions,” Strassel added. “If ‘disproportionate economic hardship’ is the agency’s standard, no doubt plenty would qualify. Yet only one got the nod. The rest of the industry is dying to know what is so special about this refinery, especially since the EPA is making every other refinery shoulder its burden.”

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