1. Reuters is reporting this morning that DJT has instructed the EPA to deny retroactive SRE waivers due "to concerns the issue could cut into his support in the Farm Belt, three sources familiar with the decision said" Big development in the #RFSwars if confirmed
2. This decision jibes with the announcement earlier this week than merchant refiners are taking the SRE battle to SCOTUS. May have expected this and SCOTUS is the last resort.
3. Remember a couple of weeks ago when Biden came out against the #SREs and in support of the RFS? I thought that might be the only thing that could get DJT to betray his friends in the oil refining industry. DJT had to respond in some way and said so at the time.
4. Of course, devil may be in the details. Denying gap SREs? Denying all SREs? What exactly is being denied? Always need to see things in writing and one has to wonder what has been promised to the refiners in return.
5. But if the result of this decision is to let the 10th Circuit decision stand and apply the ruling to the entire US, then this is a major development in the #RFSwars.
6. Why is this such a momentous decision if it applies the 10th Circuit ruling nationwide? This means that 2019, 2020, and 2021 #SREs just went poof. My view is that refiners have been all in on compliance relief from SREs and don't have much of a plan B.
7. This also would mean that technically the vast majority of 2017 and 2018 SREs are invalid and can be challenged. Ag may go after those lost gallons by asking for those to be made up in the future. Probably a heavy lift but look for the push to be made.
8. Finally, when I say refiners were all in, I mean refiners incentivized biofuel production just enough to meet the RFS mandates post-SRE haircut. They have been doing this since 2017/18. The RIN overhang just disappeared, literally overnight.
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