Kansas refineries still facing headwinds due to EPA inaction | Commentary
Many outsiders view Kansas as a proud agricultural state — and we are. But many do not realize that Kansas is also home to three refineries representing nearly 400,000 barrels per day of throughput. These refineries produce the gasoline used to fuel your car during an upcoming summer vacation, the diesel used in agricultural equipment across Kansas farms that help feed America, and the jet fuel that powers many of the planes manufactured in the Air Capitol of the World.
Collectively, these refineries support nearly 37,000 jobs in Kansas and represent an economic output of nearly $15 billion annually. No state is better positioned to recognize that both industrial and agricultural activities make critical contributions to our nation’s economy — and we need them both for our nation to prosper.
Simply put, COVID-19 crippled the refining industry as fuel demand dropped nearly 50% during the height of COVID-19 mitigation efforts. While it looks like Kansas is well positioned to make a strong economic comeback, refineries are still facing headwinds due to Environmental Protection Agency inaction.
During the COVID-19 pandemic, eight U.S. refineries have shuttered, a loss of more than 3,500 direct jobs and tens of thousands of indirect jobs during a period of time in which unemployment is rising and precious few industries are in a position to hire.
The loss of those refineries also means the loss of nearly 19 billion gallons of refined petroleum products like home heating oil, gasoline and jet fuel. As more and more Americans are vaccinated in the coming weeks and months, and we hopefully begin to resume more normal routines, businesses and consumers may well feel the impact of that significantly reduced supply.
The EPA requires refineries to blend a certain amount of renewable fuels annually. While demand for gasoline and diesel plummeted last year, refineries’ renewable fuel requirements did not and their mandated volumes reflect 2019 consumption patterns. Since January 2020, these compliance costs, known as Renewable Identification Numbers, have risen more than 600% — the equivalent of adding $100 million dollars in compliance burdens for an average-sized American refinery.
Under the Renewable Fuel Standard, Congress wisely granted the EPA Administrator authority to waive renewable fuel volumes due to severe economic harm. The COVID-19 pandemic is an appropriate use of this authority and this is why six bipartisan and geographically diverse governors have requested EPA waive these volumes.
President Biden promised to look out for the industrial jobs that make up a central pillar of our workforce and to ensure that our nation remains strong as we rebuild from the COVID-19 pandemic. Granting governors‘ RFS relief petitions would help make good on that commitment.