Thread by @ScottIrwinUI

1. And I thought I would have a normal day today! Going to focus on the implications of the SRE denial decision in this thread. Lots of unknowns about the E15 pump announcement. So sticking with what is known.

2. The implications of the SRE denial is far-reaching with regard to PAST and FUTURE implementation of the RFS mandates. Without the gap SREs, nationwide application of the 10th circuit decision means that very few of the SREs issued since 2011 or 2012 are valid. Poof.

3. I recall some in the oil refining business saying I was out to lunch that the 10th Circuit decision could blow up the SRE program. Done blowed up now! But honestly this was inevitable.

4. For a detailed discussion of the 10th Circuit decision please see this #FDD from last March by Jonathan Coppess and myself: farmdocdaily.illinois.edu/2020/03/epa-an…

5. This slide from my @OPISBiofuels talk this morning is the key part of the #FDD article. Two federal appeals courts have now concurred that the "North Star" of the RFS is that Congress intended the RFS to be a market forcing policy that favors biofuels. That simple.

@OPISBiofuels 6. Without the gap SREs or a reversal of the 10th Circuit ruling, the first thing to realize is that the vast majority of SREs awarded for 2016-2018 under the Trump EPA are now invalid. EPA has said it does not want to revisit but I will be very surprised if ag does not.

@OPISBiofuels 6. I don't know what the thinking is inside ag and biofuel groups about trying to claw back the lost SRE gallons from 2016-2018, but legally they certainly have a case to be made. Don't be surprised if they try. The strategy would be to try to get them added to future years.

@OPISBiofuels 7. Here is the record of SRE exempted RVOs going back to 2013. A total of 4.04 billion gallons of RVO (mandates) exemptions in 2016-18 years. That is a big fat target for ag and biofuel groups. Will they try to get them retroactively reinstated?

@OPISBiofuels @joey2x2x @SethMeyerMU @mwalkerrfs Good question. I am not sure. Perhaps others with more knowledge can say.

@OPISBiofuels 8. A final kick in the pants for the oil refining industry with the SRE decision. The EPA had already agreed in the final 2020 RVO rulemaking to 770 million gallons of reallocation for expected 2020 SREs. This is effectively clawback of past SRE exemptions without 2020 SREs.

@OPISBiofuels 9. So, the disaster of the SRE program for ag and biofuel overall turns out to not be nearly as bad as it could have been. As of today, the net total lost RVO is 3.27 billion gallons. Yes, that is a lot, but a far cry from what it could have been if SREs continued.

@OPISBiofuels 10. If allowed to run uninterrupted through 2022, the SRE program would likely have reduced RVOs by at least 10 billion gallons over 2016-2022. Looking forward from here, things are gonna get very interesting in the #RFSwars!