Exclusive epa gives giant refiner a ‘hardship’ waiver from regulation zee business

The Environmental Protection Agency has exempted one of the nation`s largest oil refining companies, Andeavor , from complying with U.S. biofuels regulations – a waiver historically reserved for tiny operations in danger of going belly up, two sources familiar with the matter told Reuters.

The exemption, which applies to the three smallest of Andeavor`s ten refineries, marks the first evidence of the EPA freeing a highly profitable multi-billion dollar company from the costly mandates of the U.S. Renewable Fuel Standard. The law requires refiners to blend biofuels such as ethanol into gasoline or purchase credits from those who do such blending.

The EPA exemption, granted about a month ago, could reduce Andeavor`s regulatory costs by more than $50 million this year, based on the number of biofuels credits that two brokers say the refiner recently sold into the market, along with previous disclosures by firms that own refineries of a similar size.

Giving Andeavor “a free pass when other companies are required to follow the law of the land isn’t just unfair, it may be illegal," Grassley said late Tuesday in a statement to Reuters. "It would also amount to a massive government handout to a big corporation that made billions in profits just last year."

The exemption releases the firm of its obligation to provide the EPA with biofuels credits proving compliance at the three refineries – two located in North Dakota and one in Utah – for the year 2016, which would have come due this year, the sources said. Andeavor is also asking EPA for a waiver for its 2017 obligations for the same refineries, but has not yet received a decision, the sources said.

As a matter of policy, the agency refuses to release any information on the waivers, or to name their recipients, citing concerns over disclosing private business information. The EPA denied a Freedom of Information Act request from Reuters seeking information on companies receiving the waivers.

Exxon Mobil, Chevron and Phillips 66 also own refineries small enough to meet the barrel-per-day standard, as does billionaire investor and Trump ally Carl Icahn – whose efforts last year to overhaul the biofuels programme drew scrutiny from federal investigators.

Icahn, majority owner of refiner CVR Energy , had served as an advisor to Trump on regulatory issues during his push to reform biofuels regulations early last year, but he resigned amid allegations that the role gave him a conflict of interest.

The lucrative waivers are typically only reported if a publicly-traded firm considers them to be material to their financial or operational performance, in which case they must disclose the information through Securities and Exchange Commission filings.

EPA chief Scott Pruitt, appointed by Trump, has repeatedly said the RFS is too costly to oil refiners and should be overhauled. But Trump`s Secretary of Agriculture, Sonny Perdue, told an agriculture conference in February that Trump "stands with corn farmers, biofuels farmers and the RFS," according to a recording heard by Reuters.

White House spokeswoman Kelly Love did not respond to a question about whether the administration was expanding the use of the RFS waivers to help refiners. Bowman, of the EPA, also did not comment on the question.LAWSUIT OVER `HARDSHIP` STANDARD

"The EPA`s interpretation takes the statutory language too far," wrote Chief Judge Timothy Tymkovich of the 10th Circuit Court of Appeals in Denver. "A `hardship` is something that makes one`s life hard or difficult – not just something that makes continued existence impossible."

The lawsuit – along with a perception that the Trump administration might be more sympathetic to refiners – has sparked a big increase in applications from refining firms for he exemptions this year. More than 30 refineries have sought the waivers, according to sources familiar with the matter.

Andeavor sold some 100 million of those credits to its competitors in recent weeks, according to two brokers in the biofuels credit market. The company otherwise would have needed to provide those credits to the EPA to prove compliance with the RFS.