ABC’s Weekly Federal Legislative Update June 3, 2019 Introduction Congress returns to Washington on Monday. The House will vote on a disaster relief bill. The Senate turns its attention to the 2020 and nominations. The following is news from Washington, D.C. Administration Renewable Fuel Standard Late last week, the Environmental Protection agency released its rule that would allow gasoline with 15% ethanol year round. Marc Heller of Greenwire wrote on May 31, “EPA today made final its decision to allow sales of higher-ethanol fuel in the summer, fulfilling a promise from President Trump and setting up a likely legal fight with the petroleum industry. "The world has changed," said EPA Assistant Administrator for Air and Radiation Bill Wehrum in a conference call with reporters, noting the growing dominance of ethanol-blended gasoline since the renewable fuel standard was enacted in the mid- 2000s. “EPA's action will allow gas stations to sell fuel that's 15% ethanol, called E15, year- round, a top priority for the ethanol industry. Wehrum said officials believe expanded availability will encourage stations that don't offer it to begin doing so. “Stations could sell E15 this summer, although opponents could ask a federal court to block sales while an expected legal challenge plays out. “EPA also said it would make changes to the system of renewable fuel credits that companies trade as part of the RFS. Those tweaks include additional reporting requirements for market participants, which Wehrum said would help EPA determine whether the credit market is vulnerable to manipulation. “Today's announcement marks a victory for corn farmers, whose crop is the main source for ethanol, and offers them positive news in contrast to the administration's trade fights with China and Mexico. “It also gives Trump a potential political boost in Iowa, the leading ethanol- producing state and a critical early battleground in the next election. “Agriculture Secretary Sonny Perdue, who has emerged as a public advocate for expanded ethanol sales, said EPA's decision would provide consumers with more fuel choices while increasing demand for farmers. "I appreciate President Trump's steadfast support for our patriotic farmers and for his commitment to expand the sale of E15 and unleash the full potential of American innovation and ingenuity as we continue to demonstrate our rightful place as the world's leader in agricultural and energy production," Perdue said in a statement. Reactions “Industry reaction reflected the usual divisions. The CEO of Growth Energy, Emily Skor, called it "an incredible milestone for the biofuels industry," while petroleum refiners criticized the renewable identification number (RIN) market changes as weak. “The National Wildlife Federation predicted more ethanol will worsen environmental impacts from converting land to corn production. "Allowing the year-round sale of E15 gasoline is both illegal under the Clean Air Act and will accelerate the destruction of wildlife habitat and pollution of our air and drinking water," said Collin O'Mara, president and CEO of the NWF. “EPA's move on E15 is a new interpretation of the law's provisions on the fuel's evaporative qualities and contribution to atmospheric ozone, Wehrum said. “The agency years ago waived certain provisions to allow for year-round sale of E10, which is 10% ethanol and now standard in gas stations. “At that time, E10 was the only ethanol-blended fuel available, he said. But the market is saturated with E10 to the point that only expanded sales of higher-ethanol blends will fulfill the renewable fuel standard's requirement to gradually increase volumes of ethanol on the market, he said. "That's where E15 comes in," Wehrum said. “'Happen over time' “When EPA first proposed a waiver for E10, in 1987 — well before the RFS — just over 800 million gallons of ethanol was blended into gasoline, EPA said in today's final rule. That represented about 7% of gasoline sold, the agency said. For 2019, EPA required 19.92 billion gallons of total renewable fuel. “Whether year-round availability will boost sales by much, and how quickly, is an open question. In the rule released today, EPA cited "considerable other barriers" to wide E15 sales and said it doesn't expect the new regulation alone to have a significant impact on E15 sales in the coming years. “A total of 1,293 registered gas stations sell E15, the agency said, out of 150,000 gas stations nationwide. In addition, EPA said, E10 will remain the dominant fuel "for the foreseeable future." “But Wehrum, in speaking with reporters, said the agency's action removes a market barrier and will lead to greater sales. “Some stations will see an E15 sales bump right away, if they've been selling it during other seasons, he said, and over time newly built gas stations and older, retrofitted ones will sell E15. "It'll happen over time," Wehrum said. 'Prudent' move “On the renewable fuel credit system, Wehrum said the changes aimed at making the market more transparent would help EPA determine whether manipulation is occurring — a concern often voiced by industry groups. Wehrum said EPA hasn't found evidence of manipulation but added, "We think it's prudent to move in this direction." “RINs are bought and sold as a way of showing compliance with ethanol blending requirements when a refiner doesn't actually blend the fuel. “Today's announcement would require traders to report which RIN transactions were made on the spot market versus through term contracts, and a third-party market monitor would track the RIN market, including screening for anti- competitive behavior. “The Fueling American Jobs Coalition, representing refiners and gas stations opposed to ethanol mandates, dismissed the market reforms as inadequate. "While EPA has asked for input on how to enhance its ability to monitor the RIN market for manipulation and whether a EPA should employ a third-party to monitor the RIN market. This transparency alone is not enough," the group said. "If the RINs train is capable of running you over, seeing it run you over is cold comfort." “EPA deferred action on three earlier proposed RIN market changes dealing with retirement of RINs held for certain periods of time and limitations on who can buy certain RINs and hold onto them for certain durations. Those issues may be addressed in the future, the agency said.” EPA: Acting Head of Southeast Region is Tapped for Permanent Job The following story discusses the elevation of the acting region 4 administrator to a permanent role. On May 28 Kevin Bogardus of E&E News PM submitted, “EPA's acting regional administrator for its Southeast branch now has the top job. “Administrator Andrew Wheeler announced today that Mary Walker has been appointed regional administrator of EPA Region 4, which oversees the agency's operations in the eight states of Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. “Since last November, she has been acting head of EPA's Southeast branch. The Trump administration's first Region 4 administrator at the agency, Trey Glenn, stepped down after being indicted on ethics charges related to his prior consulting work. “Wheeler asked EPA staff to join him in congratulating Walker on her appointment and lauded her government service in an internal email obtained by E&E News. “Walker joined EPA in 2016 as director of Region 4's water protection division. In June 2018, she was named the deputy regional administrator. "In these roles, she worked tirelessly to improve coordination with our states in the Southeast region, as well as the timeliness of EPA actions," Wheeler said in the email sent today. "Mary's wealth of experience and expertise serving in both state government and as a senior career official at EPA makes her exceptionally qualified to lead Region 4," he added. “Walker has also served in the Georgia Governor's Office of Planning and Budget as well as the Georgia Environmental Protection Division, including as the agency's assistant director and chief operating officer. “The Alabama native has a Tulane University undergraduate degree and a master's degree in public administration from the University of Georgia.” Congress Other Campaign 2020: Democratic Candidates Pledge Not to Take Funding from Fossil Fuel Firms Greenwire reporter Timothy Cama published on May 30, “The No Fossil Fuel Money Pledge, in which candidates promise not to accept donations from leaders in the oil, natural gas and coal industries, is catching on in the Democratic Party presidential primary. “Fourteen candidates — more than half of the Democrats running for the 2020 nomination to take on President Trump — have signed the pledge, which is maintained by Oil Change U.S. and a variety of green groups. Other candidates are either considering signing on or have indicated they might. “The most recent signature came last week from former Housing and Urban Development Secretary Julián Castro, whose roots in oil-rich Texas made him a key target for the pledge's organizers. “Castro sent out a tweet saying he signed on to the campaign "so you know my priorities are with the health of our families, climate and democracy." “The pledge is characterized in part by the showy nature in which climate activists try to get candidates to commit. “Often young, the activists frequently approach candidates during appearances and immediately ask them to take the pledge, while someone records the signing or the reaction. “The fact that the pledge is taking hold among Democrats shows how far the party has gone in pushing aside fossil fuels and trying to reduce the industry's influence, while advocating their replacement with renewables. "The No Fossil Fuel Money Pledge has become sort of a prerequisite for anyone who wants to be a climate leader in the Democratic presidential race," David Turnbull, spokesman for Oil Change U.S., told E&E News.