EPA Faces Governor Waiver Requests That Biofuel Groups Call a Refinery Giveaway

U.S. oil and gas companies have booked a record $160 billion in profits since April — a jump of more than 175% over last year — yet two petroleum-state governors want the EPA to waive part of next year's federal biofuel-blending requirements on the grounds of economic harm.

That is the collision at the center of a fight now before EPA Administrator Lee Zeldin. Louisiana Gov. Jeff Landry and Alabama's governor have petitioned the agency to partially waive Renewable Fuel Standard blending levels for 2027, arguing high fuel prices justify relief. Biofuel producers, soybean growers and corn interests are pushing back hard, and the stakes reach directly into corn and soybean demand, on-farm basis and crush margins across the Midwest and Southeast.

What are the governors asking for?

The two governors argue in a letter to Zeldin that the 2027 biofuel rules would "severely harm" the economies of their states and the broader Southeast. Landry framed the issue on social media as a consumer-price question: "Americans are paying more for gas and diesel because of the Renewable Fuel Standard (RFS). Meanwhile Europe pays zero for the American gas and diesel, and they export it! Time to put American drivers FIRST."

He did not cite blending-cost data in the post. The claim also sits awkwardly beside the profit figures the American Soybean Association put on the table, which point the margin story toward refiners rather than renewable blenders.

How are biofuel and farm groups responding?

Renewable Fuels Association CEO Geoff Cooper called the price argument "abjectly absurd and demonstrably false." In a statement, he said: "Far from delivering 'relief' at the pump, a waiver of the 2027 RFS requirements would remove a dependable source of lower-cost, lower-carbon fuel from the marketplace and cause higher gas prices. It would also harm struggling corn and soybean farmers in Alabama, Louisiana, and across the country by undermining demand for their crops."

The American Soybean Association went further, noting that national average costs of biofuel blends run below conventional petroleum and that at least one petition "falsely claimed" a waiver would support agriculture and poultry producers.

"Make no mistake: undercutting the RFS by waiving compliance would result in a giveaway to refineries that are making record profits while U.S. agriculture would be left holding the bag," ASA said.

Growth Energy CEO Emily Skor warned that granting the waivers would undo what she called the "historic work" of the Trump administration on biofuels and rural economies. "If EPA were to grant these states the special treatment they're asking for, it would increase fuel prices — not lower them — by reducing the amount of ethanol being blended into America's fuel supply," Skor said.

The core farm-side argument: biodiesel demand underpins soybean oil values, and growing crush capacity improves local basis while expanding soybean meal supplies, which lowers feed costs for livestock producers and, ASA argues, consumer prices for meat, milk and eggs.

Can these waivers actually be approved?

University of Illinois ag economist Scott Irwin doubts it. He said he is "very surprised that these two states went with 'severe economic harm' as the justification," noting that the bar is high and EPA has never approved a waiver on that basis. "By my count, the record is a perfect 0-4," Irwin said, adding that other states might try the "inadequate domestic supply" rationale instead, which he considers a lower bar.

The distinction matters. A "severe economic harm" petition faces a four-decade losing streak; a supply-based argument is a different, untested path.

What political pressure is building?

United Steelworkers members gathered on Capitol Hill on Monday to urge Congress to revamp the RFS, arguing that rising compliance costs push fuel prices up and put U.S. jobs at risk. "The midterm elections have put affordability front and center, and for working families, few costs are more visible than the price of gas," said USW Legislative Director Roy Houseman.

The fight follows Democrats winning control of both the House and Senate next year on affordability messages, while some energy lobbyists say those victories could embolden environmental groups to oppose liquid biofuels more loudly. Farm-state lawmakers in both parties back ag-based fuels.

Iowa Renewable Fuels Association Executive Director Monte Shaw offered an alternative: pass legislation allowing year-round, voluntary E15 sales — above the roughly 10% national blend standard — as the real route to lower pump prices.

EPA's volume rules for this year and next have already revived biomass-based diesel production and domestic soybean crush, with a biofuel boom dating to about five years ago driving billions in processing-capacity investment. With EPA holding an 0-4 record on "severe economic harm" waivers, the petitions face long odds — but the political pressure behind them is just beginning to build.