Pelican State News

Louisiana Gov. John Bel Edwards on April 7 wrote to EPA Administrator Andrew Wheeler to request that the agency waive the renewable volume obligation under federal renewable fuel standards (RFS) of the Clean Air Act.

The high costs of RFS compliance are putting stress on U.S. fuel supplies and jobs at the country’s oil refineries, particularly as transportation fuel demand is dropping during the COVID-19 crisis.

The compliance credits, known as “renewable identification numbers” rose to 41 cents April 15, an increase of 178 percent since Jan. 1, which puts a big burden on the refiners while the economy and fuel demand have crashed.

In Bel Edwards’ letter, he begins by discussing the economic impacts of the coronavirus, including the first quarterly contraction in a decade.

“Not only is EPA requested to act on this waiver request, it should do so immediately if it is to avoid the precise severe economic harm this waiver provision is designed to address," he wrote. "The current RVO made assumptions regarding supply and demand for refined products based on the Energy Information Administration's October 2019 short-term energy outlook that simply are no longer valid. As our country continues to come to grips with this national emergency, continuing to implement the current RVO imposes an added obligation that would 'severely' harm the [energy] sector, and consequently harm the economy of the states and the nation.”

He notes that the extraordinary circumstances of the coronavirus and the current form of the 2020 RFS compliance obligations are causing existential harm for refineries.

“With the refining and petrochemical industries contributing some $600 billion annually to the national economy and employing over 3 million industrial workers in 33 states, a material threat to the refining sector clearly would constitute a severe economic harm to particular states, regions and the nation as a whole,” he writes.

The Louisiana governor was one of a group of governors from Wyoming, Texas and Oklahoma to request the expedited waiver of the renewable fuel standards' renewable volume obligations.