Document 4vnKeMQ6zabapOjreqeOmvy5R

RENEWABLE FUEL STANDARD - ADMINISTRATIVE CHANGES NEEDED l. HollyFrontier Navajo R efining in New Mexico * HollyFrontier -projects its 2017 RDM costs to be greater than its payroll * Market cap has dropped by half since the 10% blendwail hit (limits ability to blend more ethanol into gasoline) HollyFrontier's Navajo refinery refines more than 25% of the state's daily production of crude oil * The Navajo Refining complex is the largest private employer in Artesia Average salaries exceed $100,000 annually * Employment in New Mexico will be harmed and fuel prices will increase if merchant refiners are driven out of business by RINs costs II. Proposed Administrative Changes We're asking that EPA reform the RES in two ways to save refineries: 1. Establish Renewable Volume Obligations f"RVQ") for 20 18 that are consistent with market realities o The Ed 0 blendwail is imposing significant costs on New Mexico refineries o RIN shortfall, particularly for biodiesel, is imminent * RIN bank has been depleted * RUMdeficit carryover is largest in RFS history - twice that of last year * Domestic production of biomass-based diesel has fallen short of EPA projections o Lower RVOs would throw a lifeline to refiners drowning in RIN obligations 2. Move the Point of Obligation o EPA should change point o f obligation from refiners to blenders who make the RINs, reap the profits from renewable fuels and are best able to comply. The current point of obligation severely disadvantages refiners and small retailers across New Mexico, o A change In the point of obligation would level the playing field and significantly reduce compliance costs for currently obligated parties and would encourage blending of biofuels since the obligated party would be the party that controls blending. The number of obligated parties would not significantly change from the current number, o Withdrawing the Obama Administration's proposed denial of the petition to change the point of obligation would be a neutral action that reflects EPA's current assessment of all options. c-cm6'900trt2 - to! Vi Sierra Club v. EPA 18cv3472 NDCA Tier 3/4 ED 002061 00068268-00001 CONTACT INFORMATION Rep, Yvette Herreil (R"Oie.ro5!) P.C). Box 4338 Alamogordo, NM 88311 I.... Ex. 6.... Denise C, McWatters SVP and General Counsel HoIlyFrontier Corporation 2828 N, Harwood, Suite 1300 Dallas. TX 75201 Ex. 6 Rep, James G, Townsend (R-Chaves, Eddy & Otero-54) 69 W. Compress Rd. Artesia, NM 88210 I...Ex. 6.. 1 ..ix:-0290ife0ij00- 10454S7; v| Sierra Club v. EPA 18cv3472 NDCA 2~ ~ Tier 3/4 ED 002061 00068268-00002 Fuel Industry Structure: Production Process for Current POO Farmers Ethanol Producers LYFRC Biofuels P IN s Created) Crude Oil Producers Retailers Ini H060+ Current POO P ltfe Required) Fuel Industry Structure: Production Process for Proposed POO hollyf v.v.'.v.v.v.v.-.-.v.v.v. Farmers S iM P iS i Producers Biofuels (RlNs Created) Ethanol Storage & I Rack Sellers - Crude Oil Producers Refineries + 1 Importers jfc 1 '230 'S w x W : ? Current POO (RINs Terminal / -200 Proposed POO (RINs Separated) Retailers w\ -1 0 ,0 0 0 + Ethanol, Corn, and Crude Prices lOLLYFr o n t i e r . -- HhanoiRIN To facilitate comparison, all prices have beers divided by 9/1/2009 prices to normalize to 1. A valae of 2, for example, means ffie pace was twice as high that day as on 9/1/2009. Sft) ~ Pfl) / P{9/1/20G9) CONFIDENTIAL BUSINESS INFORMATION