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GAO Questions EPA Policy on Small Refinery Exemptions

 11/06/2022

The General Accounting Office (GAO) was requested to review issues relating to the granting of  Small Refinery Exemptions from the  Renewable Fuel Standard (RFS) obligation to blend ethanol into gasoline.  The investigation disclosed:-

 

  • EPA routinely misses the 90-day statuary deadline for issuing decisions on exemptions.
  • The Agency does not have procedures to ensure that it complies with deadlines.
  • EPA does not have policies or procedures to assess petitions and make consistent decisions.
  • Small Refinery Exemption decisions for 2019 through 2021 were based on a misperception that small refineries do not experience disproportionate economic hardship from complying with the RFS.
  • EPA and the Department of Energy lack policies and procedures relating to mutual consultation regarding decisions on Small Refinery Exemptions.

 

The number of exemptions granted increased sharply in 2016 through 2018 with more than 90 percent of applications granted.  From 2019 onwards, all requests were denied.

 

The General Accounting Office made seven recommendations to address deficiencies at the Department of Energy and the EPA, including the development of documentation for policies and procedures, compliance with deadlines and more rigorous economic analysis to ascertain the impact of RFS on small refineries.  The Department of Energy agreed with the GAO recommendations.  The EPA disagreed with one recommendation and partly accepted the other six.