The Environmental Protection Agency under President Joe Biden is set to abruptly issue a sweeping denial of economic hardship exemptions to the Renewable Fuel Standard (RFS) program from small oil refineries around the U.S., likely forcing one Texas refinery to go out of business at a time when American energy independence is desperately needed.
In a forthcoming letter to the agency, obtained by TheBlaze, Texas Republican Rep. Chip Roy urged the EPA to reconsider its proposed decision to deny more than 60 pending small refinery exemption (SRE) petitions on behalf of The San Antonio Refinery LLC (TSAR), a small independent refinery in South Texas.
TSAR, which sources its oil from the Eagle Ford Shale in South Texas, employs roughly 100 workers at its facility and primarily supplies gasoline and diesel to the San Antonio and Austin areas, operating at a production capacity of 21,000 barrels per day.
Since 2013, under the Clean Air Act, TSAR has been able to avoid burdensome costs associated with RFS ethanol blending mandates under a statutory guideline that allows refineries with a capacity of fewer than 75,000 barrels per day to request exemption — so long as they can demonstrate compliance would cause "disproportionate economic hardship."
But that all changed in December 2021 when the EPA proposed denying all pending SRE petitions, which for TSAR, included petitions from the 2019, 2020, and 2021 compliance years.
In his letter, Roy warned that imposing such a staggering regulatory burden would be catastrophic for small refineries like TSAR.
"Executing this proposal could lead to the closure of TSAR, an independent small refinery located in San Antonio, Texas, and would kill good-paying jobs, further increase the cost of refined products, and make the U.S. more dependent on hostile foreign nations like Russia for energy," Roy writes in a letter to EPA Administrator Michael S. Regan.
"TSAR estimates that the combined cost of denying SREs for these years could be up to six times greater than what it spends on payroll annually. This would likely put the refinery out of business," Roy continued, adding, "If that is not 'disproportionate economic hardship,' I don’t know what is."
The congressman argued that under the RFS's statutory rules, the EPA is obligated to consider each exemption request on its own merits, a provision the agency appears to have ignored with its sweeping proposal.
TheBlaze reached out to the EPA requesting a comment on the matter, but the agency has not yet issued a response.
The regulatory burden on small oil refineries also comes as America's need for energy independence is crystallized amid Russia's invasion of Ukraine. The U.S. has inexplicably become more reliant on foreign energy in recent years — specifically doubling its imports of Russian oil in 2021. Now, the Biden administration appears hamstrung by its reliance, unable or unwilling to curtail purchases of Russian oil, thereby enriching Moscow as it carries out an unprovoked attack on its neighboring country.
Yet in the midst of all this, the EPA is set to make it even harder to obtain domestic energy at a time when it is most needed.