Delek to seek RFS waivers for Tyler, Big Spring

US independent refiner Delek did not seek controversial federal fuel blending mandate waivers for two of its four refineries — but the company will, chief executive Uzi Yemin said today.

Delek will request waivers from the Renewable Fuel Standard (RFS) for its 73,000 b/d Big Spring and 70,000 b/d Tyler refineries in Texas under a hardship program receiving more Environmental Protection Agency approvals than ever before.

The two refineries each require roughly 60mn renewable identification numbers (RINs) associated with ethanol and 15mn RINs association with biodiesel to prove compliance with the mandate each year, Yemin said on an earnings call.

"That is something we need to look at carefully, as it looks like the new administration has a willingness to look at that," Yemin said.

RFS requires refiners, importers and other companies each year ensure minimum volumes of renewables blend into the gasoline and diesel they add to the US transportation fuel supply. Obligated companies acquire RINs associated with this blending to prove compliance.

The law includes waivers for individual refineries with less than 75,000 b/d of crude processing capacity. Delek and the US independent refiner it acquired beginning in 2016, Alon, had received waivers for most of the past decade at the 80,000 b/d El Dorado, Arkansas, which is operated at 70,000 b/d, and 74,000 b/d Krotz Springs, Louisiana, refineries. Delek recorded a roughly $80mn benefit in the first quarter for waivers of 2017 requirements for those refineries.

But Delek did not apply for waivers at Tyler or Big Spring. The company did not say why, although both facilities supply more integrated retail networks and benefit from blending.

"We think the waiver is pretty much the mechanism of this administration to control the RINs cost," Yemin said.