HollyFrontier pockets $71mn on Cheyenne RIN savings

Federal waivers for two years of fuel blending requirements gave a $72mn benefit for HollyFrontier's 52,000 b/d refinery in Cheyenne, Wyoming.

The refiner today confirmed small refinery waivers of Renewable Fuel Standard (RFS) requirements in 2015 and 2017 at the facility. HollyFrontier continued to wait to hear whether a similar approval would be granted for its 45,000 b/d refinery in Woods Cross, Utah.

The company previously confirmed waivers for 2016 obligations for both refineries.

Chief executive George Damiris was optimistic Congress would change the program.

"You never know what is going to come out of Washington, but we are pleased with the direction things are going and fully recognize that there is still a lot of work to be done here," Damiris said.

RFS requires refiners, importers and other companies to each year ensure minimum volumes of renewables blend into the gasoline and diesel they add to the US transportation supply. Companies prove compliance by acquiring RINs representing that blending, either by directly blending the fuel or purchasing fuel from companies that do.

The law allows annual waivers from those requirements for refiners processing less than 75,000 b/d. Refiners apply and have in the past learned their waiver status after the end of the compliance year. The waivers apply to individual refiners, rather than whether the law creates any hardships for the broader refining company.

The Environmental Protection Agency (EPA) infuriated agriculture-state senators recently with a surge in approved waivers, to at least 25 for 2017 as of 4 April. The agency failed to approve requirements on a normal schedule in 2014 and 2015, but exempted at least 14 refineries for 2016 requirements. The agency exempted 13 refineries for the 2011 and 2012 compliance years combined.

Senators including Chuck Grassley (R-Iowa), head of the chamber's powerful judiciary committee and an influential leader on agriculture policy, have accused the EPA of undercutting the program through liberal use of the waivers this year.

Supporters of the waivers and EPA have pointed to congressional instructions in a 2017 appropriations bill and a court opinion last year that said the agency was previously too restrictive in its process.