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Coyne wo SES wwwatenics "Congress of the United States ae Ec aee wii Foouse of Repcesentatives ae ont eaten ‘Washington, BE 20515 caper a ‘August 21,2019, naan Charles J. Sheehan SS ‘Acting inspector General co USS. Environmental Protection Agency 1200 Pennsylvania Avenue, NW. Washington, DC 20460 ‘Dear Acting Inspector General Sheehan: 1 am writing to express my grave concer thatthe Environmental Protection Agency (EPA) is violating Congressional intent to increase blending of renewable Fuels and lower greenhouse yas emissions. Through the unprecedented use of smal refinery exemptions (SREs), the EPA has \waived more than d billion gallon of requirements for renewable fal blending at the expense of Towa farmers and rural communities On August 9,2019, the EPA issued an additional thirty-one small refinery exemptions forthe 2018 Renewable Fuel Standard (RFS) compliance year, reportedly a the direction ofthe President of the United States, trnging the toll number of waivers issued in the last three years 10 85 —a drastic expansion. These waivers convey signifieat financial gain, valued at hundreds cof milions of dolla, to corporsons whose identity i concealed fom the publi, ‘These waivers eut demand for biofuels, hurt farmers, aise the price of gus, and increase greenhouse gas emissions. 2018 was the first year ever that ethanol consumption fll even with historically low prices, Biodiesefosses exceed $2 billion per year and are estimated at $7.7 billion over 3 years. All ofthis comes at atime when farm income is down by 49 percent since the end of 2018, according to the Bureau of Economic Analysis® These smal refinery waivers ate enriching oil refiners o the hacks of farmers and the rural esonomy. {have serious concerns thatthe EPA continues to ignore the boundaries of is authority under the law in ts administration ofthis waiver authority, Relying onthe veil of secrecy provided by claims of confidential business information conceals the EPA's highly questionable decision- making and misuse ofits authori to benefit a small group of companies that may be exerting an ‘undue amount of influence over he regulatory proces {request an immediate investigation into the small refinery waivers granted in 2016, 2017 and 2018 to include which refiners received waivers in each year, the financial value ofthe waivers received by each company, any contact by refineries secking waivers with the EPA oF the White * hardness om/ariljveus fuels ruma(rump nterention ake ptssurie ih alu sation sources HUSKCN VGLOE * hos nlf cinco 9seo=3ksutrima table SseSARcateousciuey House, the consistency ofthe EPA’s decisions with statutory requirements and regulations, the EPA's decision-making process, and the presence of conflict of interes for any ofthe EPA staff ‘ Administaton officials involved inthe SRE process. {Lam also asking your office to determine what reasoning the EPA had for each waiver From, 2016 0 2018, including ifthere was any statutory of legal rule to support it. As you knov, from 2008 url 2016, less than 10 waivers were grated compared tothe BS waivers granted over the last three years request that O1G work to determine if there were refineries who were denied a "waiver within that 8-year period but received a waiver unde this Administration. In conducting your investigation, | request that you focus ta minimum on the following areas of 1) The EPA has stated that hey were required to shift its approach on small refinery waivers in 2017 ater ke United States Court of Appeals, Tenth Circuit decision that was issued in Sinclair Wyoming Ref. Co vs. the US. Env. Prot. Agency. Documents inthis, ‘case revealed thatthe EPA had already changed its policy before May 4, 2017. These court released documerts show thatthe EPA wrote toa refining company tat "we [the [EPA] are changing our approach’ tothe walver program by allowing exemptions to refineries even f ther operations “are not significantly impaired" by compliance”. Cash Tecahn, a majority sharebolder of CVR Energy, served asa special advisor tothe President through August 2017. I: was reported in April 2018 that CVR Energy received a small refinery exemption from the EPA? 2). Under the RFS, the EPA is able to grant small refinery hardship waivers to refineries producing less than 75,000 bares per day who are experiencing disproportionate ‘eonomie hardship, In determining economic hardship, the EPA is requited to consult ‘withthe Department of Energy (DOE) o evaluate a refiner’ hardship before granting & Waiver. The EPA ignored advice from the DOE, which eould not identify any financial justification for many ofthese exemptions In July 2019, Seeretary of Energy Rick Perry confirmed! thatthe EPA has issued atleast one small refinery waiver against the DOE's recommendations, and reports’ indicate hat the EPA. granted full waivers rather than the partial waivers recommended by DOE. 3) On April 12, 2019, the EPA released a Federal Register notice? with a proposed rule that would release the mmes of the efineres that receive SRES tothe public. On April 30, itwas reported” that the White House intervened atthe request of refiners interested in protecting their identities, and the EPA stopped the rule. The names of refiners hits eters comvaticdeiaaseensican ech grank ofl ero bllonsceahreolrnen source USKENIOTE * gee autre corel 3a tae se fercrve rugs spinoce ence secarimenccnacetint tus nae UNCRATE Stes epscu/stesrocuton fies 209.05 osumintse cb eter otis 26190833 ‘hes de ceutn comanicl/usucee-bavelser sl lue:yave-ansserencylanttcwhite: nus louse MSKONISEAL ‘receiving waivers have stil not been released by the EPA, though media reports indicate that profitable companies ike Chevron, ExxonMobil, Holly Frontier, and others received 4) The EPA has only issued SREs retroactively after the RFS compliance year has ended. Issuing waivers prospectively would allow waived gallons tobe redistributed through the est ofthe program, consistent with the intent of the lv. Interagency review ofthe 2019 Renewable Volume Obligation (RVO) confirmed that EPA is able wo issue 'SREs prospectively in a reasonable and straightforward manner. When azked by Congress in April 2019 ifthe EPA could shift oa prospective SRE approach, EPA ‘Administrator Wheeler acknowledged that the answer is yes 5) The EPA's regulations? require thatthe RVO, which ses blending targets foreach year, incorporate the number of gallons expected tobe waived under the small reinery exemption authority. Yet, the EPA has never inclided anything other than a 2210 in this formula when it establishes annual RVO. “The EPA's misuse of the siall fiery hundsip waiver aulhoriy must end, Rural econemies nd farmers cannot withstand more of the same, [look forward to the results of your investigation and request a copy of your investigation be sent to me upon completion Sincerely, Axe Member of Congress * dc bse ening 36 /2090409/109917 AG 6-18 Trans 2010409 "htc: vino aov/conten/obe/FR-2010-ie dD al (a/c 2040 eda eH 405 nl