This story first appeared on Cowboy State Daily.
By Leo Wolfson, Cowboy State Daily
One of three oil refineries in Wyoming is among 36 nationwide to have its request for exemption from biofuel blending rules denied.
Documents filed in the US Court of Appeals showed that the Sinclair refinery near Rawlins had asked the US Environmental Protection Agency for an exemption from the rules, but the request was denied on April 7 .
While the other two refineries in the state, Sinclair Casper Refining Co. and Wyoming Refining Co., in Newcastle, are listed in court documents with Sinclair Refinery, there is no way of knowing whether they requested the exemption.
Petroleum refineries are required to blend a certain amount of soy or corn-derived fuel into their gasoline product under the EPA-administered Renewable Fuel Standard or, failing that, to purchase compliance credits.
Small refineries, those that process less than 75,000 barrels of crude oil per day, can argue that the biofuel requirements pose “disproportionate economic hardship” and apply for an exemption.
All three crude oil refineries in Wyoming meet the production requirements of this waiver.
The 36 refineries affected by the EPA ruling had all requested exemptions for the 2018 production year. The exemptions were granted in 2019, but in 2020 a federal court passed much stricter rules that the facilities had to respect to be eligible.
A Wyoming refinery, HollyFrontier in Cheyenne, has stopped processing crude oil and is transitioning to full biofuel production, a move that saw 200 workers laid off in 2020.
US Senator Cynthia Lummis, in an opinion piece in “The Hill”, said HollyFrontier’s decision was influenced by the factory’s loss of its exemption to the blending requirement.
“Many small refineries apply for these small refinery exemptions every year,” Lummis wrote. “To stay competitive, they have no other choice. The cost of compliance credits is usually their second highest production expense, just behind the cost of crude oil. »
Lummis also spoke about the poor timing of the decision in relation to rising gas prices. She said compliance credits under the Renewable Fuel Standard program add 30 cents to 50 cents to the cost of a gallon of gasoline.
Lummis said the EPA has also indicated it will deny all exemption requests for production years from 2019 through 2021.
The rulings against the exemptions further limit the ability of U.S. refineries to meet gasoline demand, said Ryan McConnaughey, director of communications for the Petroleum Association of Wyoming.
“We are still seeing an increase in demand for petroleum products in Wyoming and around the world,” McConnaughey told the Cowboy State Daily on Friday. “Recent increases in gas prices show the need for production.”
However, the biofuel and petroleum industries disagree on the rules of blending.
The Renewable Fuels Association, in a statement on the EPA’s decision to deny the exemptions, said the exemptions right past refinery wrongs, but the EPA’s decision did not do enough to address the issues. economic created by exemptions in the past.
The FRG also opposed the EPA’s plan to give 31 of the refineries whose exemptions were rejected an alternative to buying compliance credits.
To qualify for relief, the 31 refiners must resubmit compliance reports for 2018 and report their fuel production for that year and other data.
“EPA is granting this compliance flexibility because the agency has determined that there are extenuating circumstances specific to this set of petitions, including the fact that the SRE petitions have already been granted,” the department said in its statement. SRE announcement.
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