After reporting a net income of $3.4 billion in 2017, Marathon Petroleum Corp has asked the EPA for a hardship waiver which would exempt one of its facilities from biofuels regulations. Marathon Petroleum Corp.
Marathon Petroleum owns six refineries
The second largest refining company in the United States, Marathon Petroleum Corp., is asking the Environmental Protection Agency for a hardship waiver to exempt one of its six facilities from the biofuels law, according to two Reuters sources.
Marathon Petroleum made the application for one of its facilities for the 2017 calendar year, but it is unclear which facility the waiver was requested for and if the EPA granted the request.
In 2017, Marathon reported a net income of $3.4 billion.
Company spokesman Jamal Kheiry declined to speak with Reuters and EPA spokesman Jahan Wilcox did not respond to a request for comment.
The company’s Canton, Ohio, facility produces about 93,000 barrels per day (b/d), and is the smallest refining facility owned by Marathon. Under EPA regulations, refineries producing under 75,000 b/d are considered small and qualify for the waivers, but the Canton facility may meet the criteria if it reduces its operations.
Usually refineries cut their production at least once a year for maintenance work, which shows as reduced production.
Reuters reports that the Ohio-based company could also have requested the waivers for a portion of one of its larger refining complexes, including its Galveston Bay refinery. Marathon could argue that certain parts of the facility operate separately.
An EPA source told Reuters that in recent months the agency has granted over two dozen small refineries waivers for 2017. Former officials say this is about triple the number given out by previous administrations.
The waivers are meant to allow small refineries to work around the Renewable Fuel Standard (RFS) which requires them to mix biofuels such as ethanol into their fuels if they can prove compliance with the RFS would cause them “disproportionate economic hardship”.
Individual refineries could save tens of millions of dollars in regulatory costs if they are granted waivers.
While the refining industry has saved hundreds of millions of dollars since the EPA expanded its use of biofuel waivers, the powerful corn lobby is up in arms over the move. Some Republicans from corn producing states, including Iowa’s Senator Chuck Grassley, say the RFS waiver program is being abused and corn farmers are paying the price.
In an e-mail to Reuters, Grassley said the Marathon request is a sign of “how broken this process is”.
“NOTE TO EPA definition of hardship: a condition that is difficult to endure, suffering, deprivation, oppression,” Grassley tweeted. “Surely Marathon doesn’t qualify for a waiver They had a net income of $3.4B in 2017 BILLIONS IN PROFITS ISNT HARDSHIP.”
Grassley and other lawmakers are pressing the EPA to cut the use of waivers and to name publicly the companies that have received them. The EPA says confidentiality rules prohibit the agency from revealing the names of waiver applicants or recipients.
However, sources tell Reuters that US refiner Andeavor and Trump associate and billionaire Carl Icahn’s CVR Energy, have been granted waivers recently.
According to Andeavor, which recorded net profits of $1.4 billion in 2017, it saved $100 million in costs thanks to the waivers.
Other majors, including Chevron and Exxon have also asked for relief for its smaller units, according to Reuters’ sources. It is not known if their requests were granted.
Marathon recently announced it is buying Andeavor in a $23.3 billion deal. The sale will make Marathon the largest refiner in the United States.
“This is the theatre of the absurd. Marathon wants a small refinery hardship waiver at the very moment it is seeking to become the nation’s largest refiner,” Brooke Coleman, head of the Advanced Biofuels Business Council, told Reuters.
“The federal government should be protecting consumers by scrutinizing mergers like this instead of handing out dividends to multibillion dollar oil companies seeking to monopolize critical energy sectors.”
The increase in the number of hardship waivers issued by the EPA has resulted in five-year lows for the prices of biofuel blending credits that refiners need to prove compliance with the RFS.
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