U.S. Senator Mike Lee (R-UT) has introduced new legislation aimed at supporting President Trump’s energy policies and protecting Utah oil refineries from what he describes as unfair financial penalties imposed by the federal government. The proposed Protect Consumers from Reallocation Costs Act seeks to prevent the Environmental Protection Agency (EPA) from requiring refineries to pay fines forgiven for other refineries that do not meet EPA environmental standards.
The bill is cosponsored by Senators John Barrasso (R-WY), Bill Cassidy (R-LA), and Cynthia Lummis (R-WY). It has received endorsements from industry groups including the American Fuel & Petrochemical Manufacturers and the American Energy Alliance.
Senator Lee said, “The Protect Consumers from Reallocation Costs Act advances President Trump’s growth agenda for American energy and lowers costs for hardworking families, ensuring that refineries in Utah and across the nation are not subjected to unlawful regulations invented by DC lobbyists. Nowhere in the Clean Air Act does it say that the swampy corn lobby can force Americans to pay more for their products. By jamming through more biofuels and environmental compliance costs, the corn lobby is stifling US energy producers and jacking up the price of fuel. It’s bad for refineries, bad for American families, and bad for American energy independence.”
Senator Barrasso added, “Our refineries play a critical role in supplying Wyoming families and businesses with affordable energy. Outrageous compliance costs under the Renewable Fuel Standard threaten to raise prices for families across the country. Our legislation will prevent increased compliance costs and help keep gas prices down for the people of Wyoming.”
Senator Lummis stated, “The small refinery exemption was meant to provide relief, not shift costs onto larger refineries. I’m proud to join my western colleagues in introducing legislation that preserves fairness and common sense at the EPA by clarifying Congress’ intent. This will prevent unfair compliance costs, protect Wyoming jobs while keeping gas prices down for people throughout the Cowboy State, and uphold President Trump’s commitment to unleashing American energy.”
Chet Thompson, CEO and President of American Fuel & Petrochemical Manufacturers said: “As if a $70 billion RFS price tag and a mandate for record imports wasn’t enough, the U.S. EPA is threatening to further undercut the President’s energy dominance agenda by reallocating more than a billion gallons of exempted RFS volumes from small refiners to their competitors. This is akin to your neighbor getting a tax break and the IRS showing up at your doorstep with the bill. It is simply wrong and will not meaningfully change the volume of corn ethanol that gets blended into American gasoline. We’re grateful to Senator Lee for introducing this legislation that will make it explicitly clear that EPA cannot re-assign massive regulatory burdens from one refinery to others. This bill will save American consumers billions of dollars. It will benefit U.S. energy security and help to ensure that American fuel manufacturers use more of their resources on productive things — like jobs, facility construction projects, and energy infrastructure — instead of red tape from the EPA.”
Currently, EPA regulations require U.S. refineries to blend renewable fuels such as ethanol or biodiesel into all fuel sold or pay penalties if they do not comply fully with these standards. Small refineries may be granted exemptions if following these rules would cause them significant economic hardship.
The EPA is now considering whether fines forgiven under these exemptions should be reassigned as additional financial obligations on non-exempt refineries—an approach critics argue lacks authorization under existing law.
The Renewable Fuel Standard program was established during George W. Bush’s presidency amid concerns about reliance on foreign oil supplies; however, critics now argue those concerns have less relevance today while requirements under this program continue increasing each year.
According to figures cited in support of Lee’s bill, EPA estimates put annual compliance costs at about $6.7 billion while projecting benefits around $200 million per year; industry sources estimate total annual compliance costs could reach $70 billion.
Supporters of Lee’s proposal argue current policy acts as a subsidy favoring biofuel producers over traditional refiners—and warn consumers could face higher fuel prices if current plans proceed without legislative intervention.
