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GAO to investigate oil refinery exemptions, impact to ethanol producers

WASHINGTON, DC – South Dakota House Representative Dusty Johnson is on board with a letter written by bipartisan members of the House Biofuels Caucus requesting an investigation into the Environmental Protection Agency’s (EPA) misuse of small refinery exemptions. The GAO accepted the request, and will “begin work shortly.”

“Year after year, this administration has let Iowans down by issuing an unprecedented number of small refinery exemptions,” Rep. Cindy Axne said. “These exemptions are a handout to big oil at the expense of ethanol producers and Iowa farmers. I am pleased that the GAO will conduct an investigation of the EPA’s handling of these exemptions.”

Since 2017, the EPA has issued over 80 small refinery exemptions (SREs), resulting in the loss of demand for billions of gallons of renewable fuel and millions of bushels of corn.

In 2018, Axne joined bipartisan members of the House Biofuels Caucus, including Agriculture Chairman Collin Peterson, in requesting the GAO conduct an investigation of the Environmental Protection Agency’s handling of SREs. Axne also requested an investigation by the EPA’s Office of Inspector General.

In its reply to Axne, GAO Orice Williams Brown, managing director of its congressional relations, said the department accepted the request as work within its scope of authority.

“As applicable, we will also be in contact with the cognizant Inspector General’s office to ensure that we are not duplicating efforts. If an issue arises during this coordination, we will consult with you regarding its resolution,” Brown wrote.

Producers of the corn-based fuel additive, including Green Plains Inc. and Poet LLC, have closed plants over the past year in Indiana, Iowa, Minnesota and other states. Companies such as the grain giant Archer Daniels Midland Co. are scaling back their ethanol business.

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