United States Senator Bill Hagerty (R-TN), a member of the Senate Appropriations Committee, this week criticized Environmental Protection Agency (EPA) Administrator Michael Regan for EPA’s denial of all small refinery exemptions from the renewable fuel standard, which unnecessarily drives up regulatory costs and therefore fuel prices.

EPA has already issued 31 retroactive denials for petitions that were awarded in 2019 that covered the 2018 compliance years. And it is anticipated that EPA will deny all 60-plus SRE petitions that are pending for 2019, 2020, and the 2021 compliance years.

Despite the Biden Administration’s contention that it is trying to reduce gas prices, Hagerty noted to Regan that EPA’s decision will have the opposite effect. Specifically, Hagerty pointed out that denying these small-refinery petitions for exemption will increase their compliance costs, which in turn increases fuel costs for consumers, noting that compliance costs have already risen 69 percent since the agency first published its plan to eliminate these exemptions in December. 

“That moves what was a 13 cent per gallon compliance cost up to 22 cents per gallon,” Hagerty said.

Hagerty expressed his disbelief that, despite record-high gas prices, the agency is forging ahead with regulatory actions that will increase fuel prices even more for consumers.

“I would just encourage you strongly, given the fact that we are hitting record-high gas prices at the pump every day, families are having to make decisions between groceries that they buy or filling up their tank, and anything that would increase compliance cost, I think we should look at very carefully right now, and having blanket exceptions, you know, retroactive withdrawals of exemptions, I think, you know, obviously puts upward pressure on prices when you have an opportunity right before you to put downward pressure by granting the exemptions. So, I’m going to encourage you, please, to consider reversing course here in this blanket exemption denial, and please take into account the impact on, you know, hardworking families that are trying to make things work at home at the pump. Not doing it, I think, implicates not only the economics of an American family, making it harder for them to get by it, it has upward pressure on inflation. It also impacts our national security, and all of this, I think, is something that is extremely challenging in my mind to understand why we would be pursuing a policy like this at this point in time, when we see the type of inflation and energy costs that we’ve got,” Hagerty said.

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