Republican senator says EPA chief must slow refinery waivers or resign

[May 16, 2018]  By Jarrett Renshaw and Chris Prentice

NEW YORK (Reuters) - Republican Senator Chuck Grassley on Tuesday said Environmental Protection Agency chief Scott Pruitt must scale back the use of biofuels waivers for small refineries, or else he will join other lawmakers calling for Pruitt's resignation.

The demand ramps up pressure on the embattled EPA administrator, who is already under pressure from mostly Democratic lawmakers to step down over controversies that include high spending on travel and security.

Corn state senators like Iowa's Grassley have been infuriated by the EPA's decision to provide an unusually large number of waivers from the U.S. Renewable Fuel Standard (RFS) to refineries in recent months, freeing them from their obligation to blend biofuels like ethanol into the nation's fuel.

"I’ve supported Pruitt but if he pushes changes to RFS that permanently cut ethanol by billions of gallons he will have broken Trump promise & should step down & let someone else do the job of implementing Trump agenda," Grassley wrote on Twitter.

The EPA has authority to exempt small refineries from the Renewable Fuel Standard if they can prove complying would cause them economic hardship - but biofuels advocates say overusing the waivers kills demand for ethanol.

Grassley's comments drew a quick response from backers of small refineries who argue that the EPA's expansion of the waiver program is not a political choice, but stems from a 2017 federal court decision that said the agency had been too stingy with waivers in the past.

"It is untenable that a sitting senator would give an administration official a Sophie’s choice: to violate the Clean Air Act or resign," LeAnn Johnson Koch, an attorney at Perkins Coie who works with small refineries, said.

Senator John Barrasso, who represents Wyoming, home to several small refineries, said on Tuesday that the EPA ignored this obligation under the Obama administration and the courts rebuked the agency for it.

"EPA is now following the law and must continue to do so," Barrasso said.

EPA Administrator Scott Pruitt testifies before the House Appropriations Committee Subcommittee on Interior, Environment, and Related Agencies Subcommittee on Capitol Hill in Washington, U.S., April 26, 2018. REUTERS/Aaron P. Bernstein

The EPA has said its criteria for approving hardship waivers for small refineries has not changed from past years.

Several Democratic lawmakers have called on Pruitt to step down in recent weeks, but President Donald Trump has thrown his support behind the agency chief, saying he is doing a "fantastic" job rolling back hurdles to industry.

Trump has been seeking to mediate discussions with lawmakers over the future of the Renewable Fuel Standard in recent months with an eye toward reducing the regulatory cost for refiners without undermining ethanol demand.

Trump told lawmakers in a closed-door meeting last week that he had decided to do so by expanding sales of high-ethanol gasoline called E15, counting ethanol exports toward annual volumes quotas, and cutting back the use of waivers, according to a source briefed on the meeting.

The corn lobby supports expanding sales of E15 and reducing the waiver program, but opposes counting exports toward volume quotas.

(Reporting by Jarrett Renshaw; writing by Chris Prentice; editing by Richard Valdmanis and Jonathan Oatis)

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