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Scott Irwin Profile picture
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Apr 7 • 7 tweets • 3 min read
1. #RFSwars just keep getting weirder and weirder. Guess that fits with the times. @OPISBiofuels reporting "EPA Revokes 31 SREs for 2018 RFS Compliance Year, Denies Five More" This sounds like a real blow for the crude oil refiners until you read the fine print.
@OPISBiofuels 2. "Concurrent with today’s denial action, EPA is also taking action to provide an alternate compliance approach that allows 31 small refineries to meet their new 2018 compliance obligations without purchasing or redeeming additional RFS credits."
@OPISBiofuels 3. I am struggling to fathom what just happened with this RFS ruling. So let me get this right. #1 past SREs invalidated. #2 Firms with invalid SREs are out of compliance for those years. #3 Said firms do not have to turn in RINs to demonstrate compliance. Huh?
@OPISBiofuels 4. My favorite part is this. If you go to the page on the EPA website for the SRE rulemaking you see a link at the bottom of the page that is supposed to take you to the ways "alternative" compliance can be accomplished for firms with now invalid RINs Image
@OPISBiofuels 5. If you click on the link for Alternative RFS Compliance this is what is returned. I kid you not. Image
@OPISBiofuels 6. I meant "invalid SREs" on #4
@OPISBiofuels 7. I need to dig into the actual rulemaking document to see how this fairy tale ends.

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More from @ScottIrwinUI

Scott Irwin Profile picture
Apr 8
1. Weekend Reading. With the March Prospective Plantings and Grain Stocks reports behind us, its a good time to review a recent article on the accuracy of USDA reports in corn, soybeans, and wheat. Long title. cambridge.org/core/journals/…
2. Background: this work was part of a research project that Olga Isengildina-Massa of VPI and Berna Karali of Georgia did with me on the accuracy and market impact of USDA reports. Motivation was the argument that big data/machine learning/satellites had made USDA redundant.
3. Interesting how long this argument has been made about the private sector relative to the USDA. I first ran into it in the 1980s. My friend Richard Just wrote an entire AJAE article I think back in 1983 making this argument. Resurfaced in the 2000s with "big data."
Read 13 tweets
Scott Irwin Profile picture
Apr 8
1. Oh yea, I'm on a roll with the Biden EPA and the RFS. I was thinking about the justification used yesterday by the EPA for forgiving the 1.4 billion gallons of RVO associated with the 2018 SREs that they threw out. That was a $1.5-$2 billion dollar gift to refiners.
2. EPA says its toooooo late to make the affected refiners re-comply and (accompanied by fainting sounds) we just cannot pull down the RIN bank that much. Oh my. It would literally threaten the very foundation of the entire RFS program!
3. I call you know what on the entire thing. Do not forget that in the proposed rulemaking released just last December that the Biden EPA went back and re-opened the final rulemaking for 2020 and wrote down the RVOs. So much for that lateness thing.
Read 5 tweets
Scott Irwin Profile picture
Apr 8
1. I am struck today by the wildly schizophrenic nature of the Biden Administrations energy policies. Consider what has gone down just with the RFS in recent months. First, they re-opened a previously finalized compliance year, 2020. That had never been done before.
2. Next, they wrote down RVOs for 2020 and 2021 to actual domestic consumption. Finally, yesterday they disallow 1.4 billion gallons worth of 2018 RVOs but then say never mind, no need to actually comply.
3. The picture that emerges is one, at least on the RFS, of an administration that is owned lock, stock and barrel by the crude oil refining industry. Yes, I said that about the Biden Admin EPA. Tell me how this is any different than the Trump Admin?
Read 7 tweets
Scott Irwin Profile picture
Apr 7
1. So, I need to revise my earlier conclusion. At least for the 1.4 billion SRE obligations for 2018, this was a major win for refiners. Even though it always seemed to me that the SREs were granted illegally, and after being legally invalidated, refiners don't have to comply.
2. While it may not be the complete victory refiners had in mind during 2017-2019, sprinkling pixie dust and making 1.4 billion gallons of RIN obligations disappear for 2018 is quite the parting gift wouldn't you say?
3. It also looks to me like another version of "if its late you can justify anything by a regulator" strategy. EPA says that it would draw down the RIN bank too much. I call baloney on that. Plenty of RINs in the RIN bank.
Read 4 tweets
Scott Irwin Profile picture
Apr 7
1. Ok, the EPA now has the critical document up on "alternative" 2018 compliance for obligated parties with invalidated SREs for that year. It can be found here: epa.gov/system/files/d…
3. An example where the really fine print contains a very important passage for the RIN market. If I am reading this correctly, the 2018 SRE obligation will simply be rolled over to 2019, for which compliance has not yet been closed.
4. This is big because this means (if I have it right) that the RIN bank just shrunk by 1.4 billion gallons. This is the amount of SREs for 2018 that were just invalidated.
Read 6 tweets
Scott Irwin Profile picture
Apr 6
1. Website Wednesday: Starting a new series of threads to highlight features of my new professional website. I am incredibly fortunate to hold the Laurence J. Norton Chair of Agricultural Marketing her at the U of I. So who was Laurence "Larry" Norton? scotthirwin.com/norton/
2. Larry Norton was a very prominent ag economist at the U or I in 1930s, 40s, and 50s. He helped start the Farm Credit System in the depths of the Great Depression for one thing. Former President of the American Farm Economics Association (AAEA today).
3. Sadly, Larry died suddenly in 1956 at the height of his career. His widow, Aurene, gave a gift of farmland in the 1970s to the U of I to fund a professorship or "chair" in ag marketing, Larry's area. First chair in entire College of Ag.
Read 8 tweets

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