U.S. EPA waives fuel requirements, extends biofuels deadline to help refineries

(Reuters) – The U.S. Environmental Protection Agency on Friday unveiled measures to help oil refineries cope with fallout from the coronavirus outbreak, including waiving anti-smog requirements for gasoline and extending the deadline for small facilities to show compliance with the nation’s biofuels law.

FILE PHOTO: U.S. Environmental Protection Agency Administrator Andrew Wheeler looks on during a ceremony to sign the memorandum of understanding on cooperation in urban sustainability with Brazil’s Environment Minister Ricardo Salles (not pictured) in Brasilia, Brazil January 30, 2020. REUTERS/Adriano Machado

The outbreak has touched off a massive global decline in demand for motor fuels and forced companies to reduce staffing levels to slow infection rates.

Typically U.S. fuel dealers are required to stop selling winter-grade gasoline on May 1 as summer anti-smog standards come into play. But marketers will now be allowed to sell the fuel until at least May 20, and possibly beyond.

“The reason we have to do this is because people are driving fewer miles and the winter blends are stockpiled in all the tanks,” EPA chief Andrew Wheeler told Reuters in an interview. “There’s no place to put the summer blend.”

The EPA, he said, will also extend the deadline for small oil refineries to prove their compliance with the Renewable Fuel Standard (RFS), the law that requires refineries to blend billions of gallons of biofuels like ethanol into their fuel or buy credits from those that do.

Refiners are typically required to prove their compliance by March 31, but facilities with less than 75,000 barrels of daily processing capacity will be given extensions.

Wheeler said the decision was related to ongoing litigation over the agency’s Small Refinery Exemption Program, which can free some small plants from obligations under the RFS. A federal court ruled in January that the EPA had been too free with the waivers, and while the agency did not challenge the ruling, some refineries have.

Wheeler said it would be unfair to force small refineries to comply with the RFS before that case is over.

“We’re extending the compliance assistance to all the smaller refineries,” he said.

In the meantime, the agency will not revisit or rescind any of the exemptions it has given to small refineries in the past.

“Investigating and initiating enforcement actions against small refineries that were previously subject to an exemption is a low priority for the agency,” the EPA said in a press release outlining the moves.

The American Fuel & Petrochemical Manufacturers cheered the EPA’s decision to allow for sales of winter-grade gasoline past the cutoff.

“Refineries are already transitioning to producing summer grade gasoline, but with the unprecedented decline in gasoline consumption, there is simply not enough consumer demand to draw down existing inventory by the summer RVP deadline,” said Derrick Morgan, AFPM’s senior vice president of federal and regulatory affairs.

Reporting by Stephanie Kelly; Editing by Marguerita Choy, Leslie Adler and Paul Simao

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