EPA’s Acting Assistant Administrator for the Office of Air and Radiation, Janet McCabe, was grilled at a recent Senate Homeland Security Subcommittee hearing with questions surrounding the legality of the agency’s decision to use its general waiver authority to cut renewable volume obligations.
Leading the charge against EPA’s waiver decision were the ag-state Senators Heidi Heitkamp (D-ND) and Joni Ernst (R-IA), who described the agency’s interpretation of its authority as twisted and wrong. They are the ones that miss the mark, not EPA.
At the heart of the debate is the meaning of the phrase “inadequate domestic supply” – the trigger under the Clean Air Act for when EPA can waive some or all of the renewable fuel mandates. EPA interprets “inadequate domestic supply” as referring to the supply of Renewable Identification Numbers (RINs), which are credits the government requires refiners to obtain to prove that renewable fuels were actually blended and consumed in our transportation fuel supply.
Under fundamental principles of administrative law, implementing agencies interpret statutory provisions, and courts must defer to those interpretations provided they are reasonable. Due to motor vehicle and infrastructure constraints on the ability to deliver and use fuel with greater concentrations of ethanol, RIN supply is inadequate to comply with the renewable fuel volumes Congress originally forecasted. Unless consumers demand higher blends of ethanol, obligated parties, including refineries, can’t obtain enough RINs to allow them to meet their statutory obligation under the RFS. This is precisely what EPA’s waiver authority is intended to prevent; interpreting it any other way would be unreasonable and come at the expense of consumers. Because RINs act as a license to sell fuel to consumers, if refiners cannot obtain enough RINs to meet the mandate, they would not be able to supply consumers with the transportation fuel they may demand and need. Thus, EPA is justified in interpreting “inadequate domestic supply” as encompassing RINs.
It should surprise no one that Senators Heitkamp and Ernst would act at the bidding of the corn ethanol lobby. Fortunately for consumers, the Senators are wrong on the law and EPA is well within the bounds of its legal authority to adjust the mandate to reflect the realities in the marketplace. Now let’s hope EPA goes further in using this authority in its final rule to avoid pushing more ethanol into the marketplace than engines and infrastructure can handle.