In nearly identical letters, Toledo Mayor Wade Kapszukiewicz and Oregon Mayor Michael Seferian have asked the Trump administration to ease up on biofuel requirements for Toledo-area refineries — especially the ethanol mandate.

Ethanol, which is most commonly produced from corn, has for years been a gasoline additive used to help domestic supplies of gasoline last longer, curb pollution, and reduce America’s reliance on foreign oil.

That has been reduced dramatically over the past decade because of large volumes of previously trapped reserves of oil and natural gas being recovered through the horizontal drilling technique of fracturing shale, or fracking.

Ethanol usage also has been a source of controversy for years by critics who view it as a farm subsidy.

In their letters, the two mayors implore U.S. Environmental Protection Agency Administrator Andrew Wheeler to soften the requirements for usage of ethanol and other biofuels because of the coronavirus pandemic’s imposed financial hardship on the refining industry.

Easing up on the requirements, they said, would lower the industry’s production costs.

They noted President Trump acknowledging during his visit to Toledo earlier this year that this area’s economy is linked to advanced manufacturing. They both noted this area is “the glass capital of the world and home of Fiat Chrysler’s Jeep assembly plant.”

“Manufacturing is central to economic progress, with a high multiplier effect that creates numerous direct and indirect jobs,” both of their letters stated. The documents also said every refining job supports 16 other jobs, and that the two local refineries — the BP/Husky Refinery in Oregon and the PBF Toledo Refinery in East Toledo — supply “more than 30 percent of Ohio’s gasoline and 42 percent of gasoline in southeastern Michigan.”

“This is essential fuel residents use to get to work and school, to power generators and outdoor machinery, and take road trips to visit family,” their letters both stated.

The letters — which neither mayor explained why they so closely resemble each other — also said the two Toledo-area refineries are important to regional air travel in that they supply the “vast majority of the fuel to Detroit Metro Airport, airports throughout Ohio, and even the Indianapolis and Pittsburgh airports.”

“The closure of either refinery would make regional jet fuel supplies harder to come by and consumer and airline costs significantly higher, threatening air travel and, thus, larger swaths of the Ohio, Michigan, and the Midwest economy,” their letters stated.

Both cited a tripling in cost since January of renewable identification numbers, or RINs, the compliance credits that refineries can purchase to meet the biofuel mandates.

“Refiners cannot afford hundreds of millions of dollars in more compliance costs associated with escalating RIN prices, particularly since recent data shows the RFS can be managed in a way that lowers RIN costs without reducing biofuel use,” their letters state.

Citing mutual concerns over refining capacity cuts at both local refineries since the pandemic began, the two mayors specifically asked Mr. Wheeler to reduce the conventional biofuel mandate “to a level below the 10 percent ethanol concentration that all engines and infrastructure can handle and reduce the ‘advanced biofuel’ portion of the mandate to [a] level no greater than last year’s actual domestic production of fuels that qualify for this category.”

They both cited the recent idling of a refinery in Canada and another in New Mexico to illustrate their point, adding that reducing biofuel mandates “is necessary to protect Toledo’s union jobs and Midwestern fuel supplies.” 

Sarah Howell, a BP spokesman, said that corporation was not aware of the letters and referred questions to the industry’s chief lobbying group on Capitol Hill, the American Petroleum Institute.

The API’s website states that the United States has “undergone an energy transformation from a nation of energy dependence and scarcity to one of energy security and abundance” over the past decade, and has “transitioned from a net importer of refined petroleum products to a net exporter.”

Scott Lauermann, API spokesman, told The Blade that group has long advocated for softer ethanol-blending requirements.

“Although we didn’t encourage these most recent waiver requests, the challenging market conditions facing the refining sector today have not changed our opinion that EPA needs to scale back its implementation of this mandate and set ethanol volumes that reflect the limitations of the vehicle fleet and refueling infrastructure,” he said.

Brendan Williams, PBF Energy‘s chief policy adviser in Washington, said the company “greatly appreciates the mayors’ calls to waive the federal biofuel mandate.”

“Refining has been one of the sectors hit hardest with the adverse economic impacts of the COVID pandemic,” he said, adding that gasoline demand is half what it was a couple of months ago while jet-fuel demand is down 70 percent.

He said the rapid escalation in costs for compliance credits “adds significant and unnecessary strain on refiners in this economic environment, draining money that could be spent helping them ensure they maintain the ability to keep plants running and workers employed as the nation works towards recovery.”

The U.S. EPA said only that it is “watching the situation closely, and reviewing the letter.”

A significant amount of corn grown in northwest Ohio and southeast Michigan is used in ethanol refining.

“Our understanding is that the RFS blending requirement for a refinery decreases if they are selling less gasoline and diesel, which is certainly the case during the COVID-19 crisis,” said Ty Higgins, an Ohio Farm Bureau Federation spokesman. “There are currently over 25 million barrels of ethanol sitting around, and ethanol is the cheapest it has ever been. It seems that some of the claims in the [two letters] to the EPA simply don't add up.”

One of the nation’s biggest ethanol critics is, ironically, an environmental group.

“The National Wildlife Federation has for years called on EPA to reduce the ethanol mandate due to its devastating impacts on wildlife habitat and local waterways, and it certainly makes good sense to [do that] now,” said DeGennaro, the federation’s climate and biofuel policy specialist.

“The people of Toledo and northwest Ohio have seen first-hand the impacts of runoff-fueled toxic algae,” he said. “That’s why the EPA can use its authority to put in place commonsense reforms to the Renewable Fuel Standard that both support farmers and advance clean energy priorities without further jeopardizing fish and wildlife habitat and our drinking water.”

First Published May 3, 2020, 9:45 p.m.