MT Wire

RIN stands for Renewable Identification Number.  They are essentially “credits” that refiners need in order to show they are in compliance with Renewable Fuel Standard (RFS) blending requirements.

 

The EPA assigns RINs to track refiners’ renewable fuel usage.  If refiners do not use enough renewable fuel, they can purchase RINs to satisfy RFS mandates.

This system has led to two negative consequences – soaring RIN prices and fraud.

The Price of RINs

• Refiners are scrambling to find enough RINs to meet their RFS obligation.  This has caused the price of RINs to surge as much as 1,400 percent since last year.
• Because of declining gasoline demand and increasing RFS standards, this rapid increase in RIN cost – which adds to the cost of making gasoline – could continue if RFS requirements are not relaxed.

RIN Fraud

• The combination of high RIN costs and limited availability has encouraged fraud.  Since 2011, the EPA has identified 140 million invalid or counterfeited biodiesel credits.

Problems with RINs are just further proof that the RFS does not work in today’s energy market.  Tell Washington that the RFS needs to be repealed.

In an effort to avoid the E10 blend wall crisis, the EPA has issued a partial waiver to allow gasoline blended with 15 percent ethanol (E15) to enter the market.  But they failed to take into account the significant problems this could cause for filling stations.

These largely independent, small businesses are simply not set up to dispense gasoline containing this high alternative fuel content.

• According to the Petroleum Marketers Association of America, there are 700,000 gasoline dispensers in the U.S., and fewer than 5,000 have been certified for E15.
• The cost to upgrade equipment for E15 would run from thousands to hundreds of thousands of dollars per station.

That’s a tremendous burden on small business owners.

•  The vast majority of the 156,000 gasoline stations are owned by independent businesses (not the major integrated oil companies). 
• 60 percent of all stations are owned by a single individual who owns a single store.
• The average filling station’s annual profit is only $40,000.

The Petroleum Marketers Association of America has estimated that it will cost almost $10 billion industry wide for dispensers to sell E15.  Even when using pump retrofit kits, costs will hit $4 billion , not including the expense of breaking concrete to change out underground storage tanks.  Additionally, over 3,000 miles of underground piping at the station have not been certified safe for E15.

The total price tag of dispensing E15 at $10 billion comes at a steep price for a product that consumers are not even asking retailers to sell. 

Like the RFS, the E15 waiver does not work.  Join us, and tell Congress that the RFS must be repealed.
 

The blend wall is rapidly approaching.

The blend wall is the point at which Renewable Fuel Standard (RFS) mandates will require the biofuel content of our gasoline supply to exceed the 10% level (E10) that most of our vehicles were designed to run on.  It could easily happen this year.

Congress passed the RFS when America’s energy situation was much different.  Today, we use less fuel than RFS supporters predicted, resulting in a much smaller pool of gasoline and diesel available for blending with mandated amounts of ethanol and other biofuels.

The result is an unworkable RFS program that pushes biofuel content above acceptable levels.

• This could mean damaged engines and other mechanical problems.
• It would reduce fuel economy.
• Even family-owned gas stations could be negatively impacted, forced to spend tens of thousands of dollars to retrofit their equipment to dispense high ethanol content fuels.

Our economy will suffer when we hit the blend wall.  One study estimates that, by 2015, it will cause a $580 billion decrease in take-home pay for American workers and a $770 billion reduction in our GDP. 

The blend wall does not have to happen.  Repealing the RFS would put fuel consumers back in charge of determining reasonable ethanol blends, which will protect family budgets and our economy.

Join us in asking Congress to repeal the RFS.  Click here to make your voice heard on this important issue.

Many aspects of the Renewable Fuel Standard (RFS) do not make sense.  But perhaps none are as unreasonable as the cellulosic fuel mandates.

 

The Clean Air Act demands that the EPA require refiners to blend gasoline with not only ethanol -- most of which comes from corn -- but also with cellulosic biofuels.  These are renewable fuels made from plant material such as wood or grasses.

The only problem? Cellulosic biofuels do not exist.

Or at least not in commercially viable amounts.  No one produces cellulosic ethanol for commercial use.  Cellulosic fuels do exist in research labs, but this experimental fuel is essentially still on the drawing board.

Even so, the EPA demands that refiners purchase credits for this non-existent fuel.  This irrational edict does nothing to increase biofuel use, yet it drives up the cost of manufacturing fuel .  It is a stealth tax on producing fuel.

Bob Greco, API group director for downstream and industry operations, called it “regulatory absurdity.”

A court decision in January of 2013 rejected the EPA’s 2012 cellulosic fuel mandate.  So, for now, refiners are safe from the $8 million in additional costs that cellulosic requirements would have triggered.

About the ruling, Greco said, “The court has provided yet another confirmation that EPA’s renewable fuels program is unworkable and must be scrapped.”

If you agree, click here to tell Congress the RFS must be repealed.

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Montanans love the scenic beauty of this state and are fiercely protective of the natural environment here. But the vast majority of us realize that the environment can be preserved without ignoring the incredibly diverse, bountiful energy resources that lie beneath our feet.

• Montana’s share of the Williston Basin contains two of the largest 100 oil fields in America.
• The USGS estimates the total Bakken Shale reserve holds as much as 3.65 billion barrels of oil.
• Montana has four active refineries, processing almost 200,000 barrels of oil a day.
• About 3/5 of Montana households use natural gas for heating and we ship excess natural gas output to out-of-state markets.

All of these energy operations are good for business. In 2010, a University of Montana economist found that energy was a significant pocket of economic growth. Oil and natural gas production alone is the second-largest industry in the state, with a total economic impact of $9 billion. Energy industry jobs also tend to be higher paying, especially important in a state with an average annual wage of less than $34,000—one of the lowest in the nation.

 

 

Canadian oil sands are a massive energy resource, predicted to hit production levels of 3.5 million barrels of oil per day by 2025.  Knowledgeable Energy Citizens understand and appreciate what that could do for our economy and national security. 

Sadly, not all politicians agree on the potential benefits. President Obama recently rejected the Keystone XL pipeline project in an effort to appease his radical environmentalist supporters, even though it would have meant 20,000 new, oil sands-related U.S. jobs.  Here’s how one  observer summed up his feelings on the decision.

In Eastern Montana, support for Keystone XL is strong. Even though some affected landowners have questions (that Keystone builder TransCanada is eager to answer), most Montanans want to see the pipeline project completed. Once it is in place, Montana schools stand to gain $80 million a year in tax revenue, while construction and ongoing pipeline operation would create much-needed, family wage jobs. The Billings Gazette reports on the ongoing issue.

 Of course, Nebraska is still central to the Keystone XL pipeline debate. Small businesses are worried about the lost economic boost they had been expecting from the pipeline. And Nebraska Rep. Lee Terry has introduced a bill that would take politics out of the equation by establishing a structured approval process. The American Petroleum Institute praises this effort by House lawmakers.

Energy Citizens are concerned. Ignoring the potential of North American oil sands hurts workers, students, families, business owners—just about everybody. Our nation’s leaders need to realize that.

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