By JORDAN STRICKLER

Kentucky Correspondent

WASHINGTON, D.C. — An investigation by Reuters charges that U.S. EPA Administrator Scott Pruitt has been giving preferential treatment to some of the nation’s largest oil refining companies. Recently, he was found to have granted Texas-based Andeavor hardship waivers on biofuel regulations.

This is a little-used federal law historically reserved for smaller operations in peril of going bankrupt, in an effort to free the multibillion-dollar company from the expenditures of the U.S. Renewable Fuel Standard (RFS). The 2016 exemption was given to three of Andeavor’s 10 refineries, two in North Dakota and one in Utah. The credits would have come due this year.

Andeavor has also asked the EPA for a waiver for its 2017 obligations for those same refineries. A decision has not yet been given on its most recent request.

To date, the EPA has exempted approximately 20 refineries from their 2016 biofuel requirements and at least 25 for 2017. According to the EPA, many more are also under consideration.

Other companies that have received waivers are Hollyfrontier, for two refineries in Utah and Wyoming; Delek, for Arkansas and Louisiana; and Calumet Specialty Products Partners, for San Antonio. Texas. and Louisiana. According to the U.S. Securities and Exchange Commission, Hollyfrontier – which earned in excess of $900 million in profits for 2017 – saved $57.8 million thanks to exemptions. Delek, which showed profits of $320 million in 2017, reported an exemption which saved it $47.5 million.

“Granting waivers to large refiners directly undercuts the effectiveness of the RFS law, which was designed to increase demand for American-grown biofuels,” said National Farmers Union President Roger Johnson. “‘Hardship waivers weren’t designed for large corporations who net billions in profit each year.

“These actions directly contradict the President’s and the administration’s promises to rural America to support the RFS.”

Under the RFS, refining companies must blend gasoline with ethanol while diesel must be blended with other approved biofuel; however, refineries that use fewer than 75,000 barrels of crude oil per day may be granted a temporary exemption if complying with the regulations causes them to "suffer disproportionate economic hardship."

“EPA has struck again," said Bob Dinneen, head of the Renewable Fuels Assoc. (RFA). "It appears the agency has initiated a fire sale on RFS demand. Providing a small refiner waiver to a company like Andeavor is laughable and abandons the commitment of President Trump to protect the RFS. This is an outrageous abuse of the statute.”

The EPA exemption to Andeavor, which was granted in March, has the ability to reduce its regulatory costs by more than $50 million this year. The waivers bring into question the legitimacy of approving credits to smaller branches of larger refineries for larger organizations.

According to the Reuters report, Exxon Mobil, Chevron and Phillips 66 also have refineries that fit the barrel-per-day bill, as does Trump advisor Carl Icahn, who drew the ire of federal investigators last year in his attempt to overhaul the biofuel program. That investigation caused Icahn to give up his advisory post.

This is not the first time Pruitt has upset the renewable fuel industry. In January, he blamed the bankruptcy of Pennsylvania oil refiner Philadelphia Energy Solutions –  the largest oil refiner on the East Coast – on federal biofuel policy. In an interview with Fox News at the time, he said the refinery went belly-up, largely faulting the RFS, citing the program’s requirement that refiners earn or purchase renewable identification numbers (RINs) to prove to the EPA they are meeting their obligations.

“In November 2017, EPA disclosed that it had exempted 14 small refiners from the 2016 RFS requirements and was considering exempting two additional refineries,” wrote RFA Executive Vice President Geoff Cooper in his online blog. “The exempted volume for the 14 refineries amounted to 515 million RINs being removed from the total 2016 obligation, effectively reducing the RVO (renewable volume obligations) from 15 BG (billion gallons) to 14.485 BG.

“Because these exemptions were granted after the 2016 RVO was finalized, the lost volume was not recovered by reallocating it to remaining obligated parties.”

In an interview with the Houston Chronicle, an executive for one refining company, who requested anonymity due to the sensitivity of the issue, said, “Anyone with a brain submitted an application. The EPA was handing out those exemptions like trick-or-treat candy.”

Pruitt has also met with a maelstrom of headlines recently with his spending and management of the agency being questioned. According to The New York Times, these include unusually large spending on office furniture and first-class travel, as well as certain demands by Pruitt for security coverage, such as requests for a bulletproof vehicle and an expanded 20-person protective detail.

He has also come under fire for renting a condo below market value from health care lobbyist Vicki Hart, whose husband, J. Steven Hart, is an energy lobbyist.

“(The waivers are) yet one more action in a series of disturbing moves made after the final RVOs were issued,” said Dinneen. “These latest actions have been under the cover of darkness, with no transparency whatsoever. No one really knows how far these exemptions go, or how many total companies have received these waivers.

“Any claims the RFS is negatively impacting the oil industry are absurd, much less the fifth-largest refiner in the country, which posted a profit of nearly $1.5 billion last year. Suffice it to say we are exploring all our options to return the RFS to what the statute intended and what the President has supported.”