U.S. Senator Mike Lee (R-UT) has introduced the Protect Consumers from Reallocation Costs Act, a bill designed to support President Trump’s energy policy and prevent Utah oil refineries from facing additional penalties imposed by the Environmental Protection Agency (EPA). The legislation aims to stop the EPA from requiring compliant refineries to pay fines that were forgiven for other refineries failing to meet 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 the American Fuel & Petrochemical Manufacturers and the American Energy Alliance.
“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,” said Senator Mike Lee. “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 John Barrasso commented on how these measures would affect his state: “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,” he said. “Our legislation will prevent increased compliance costs and help keep gas prices down for the people of Wyoming.”
Senator Cynthia Lummis added: “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, stated: “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.”
Under current federal requirements known as Renewable Fuel Standards (RFS), U.S. refineries must include set amounts of renewable fuels such as ethanol or biodiesel in their products or pay penalties if they do not comply. Small refineries can receive exemptions if following these rules would cause significant economic hardship.
Recently, there has been discussion within EPA about shifting financial obligations—originally waived—from noncompliant small refiners onto those who have met standards without explicit authority under existing law.
This program originated during concerns over reliance on foreign oil but continues despite domestic production increases; each year sees higher mandated volumes of renewable fuels required.
According to estimates cited in statements supporting this bill, annual compliance could cost $6.7 billion according to EPA calculations or potentially up to $70 billion as estimated by industry representatives.
Supporters argue these policies act as subsidies benefiting agriculture interests at consumer expense since they may lead directly to higher gasoline prices if enforced as proposed.
The new legislation seeks specifically to prevent such reallocation practices by prohibiting EPA from transferring penalty responsibilities among different refinery operators.
