Agricultural News
Dinneen Letter Urges Senate Committee to Support Renewable Fuel Standard with EPA
Wed, 11 Dec 2013 10:26:45 CST
Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), sent a letter to the Senate's Environment and Public Works Committee early this morning. The letter reminds the Committee that "the RIN system was expressly designed to stimulate investment in expanded renewable fuels production and distribution capacity."
Going straight to the heart of the claim by refiners that RINs prices drive up gas prices, Dinneen writes "-there is absolutely no evidence to support this claim. Data clearly indicate that higher RIN prices in 2013 did not have any discernible impact on gasoline prices. Retail gasoline prices in 2013 followed the same seasonal pattern as in previous years but actually showed less seasonal volatility than in the previous two years- in fact, there were many instances during the year when gasoline prices were falling as RIN prices were rising, and vice versa."
Dinneen highlights a Minnesota case study that underscores that point, "In fact, there is evidence that higher RIN prices actually led to lower fuel prices for consumers of high-level ethanol blends in the summer of 2013, when RIN prices were elevated. Progressive fuel blenders and retailers purchased ethanol (with free RINs attached), blended it to make E85, separated the RINs from the gallons, and sold the RINs to refiners who had stubbornly chosen to buy RINs rather than physical gallons of ethanol. Thus, the revenue from the sale of the RIN allowed enterprising retailers and marketers to reduce the price of the E85 for the consumer. In many cases this spring and summer, E85 was priced at a 25-35% discount to regular E10 gasoline. In response to these discounts, consumer demand for E85 increased dramatically."
Dinneen asks the Committee to join the biofuels industry in encouraging EPA to finalize a 2014 RVO that reinvigorates the RIN market and restores the incentive to expand renewable fuel distribution capabilities.
The entire text of the letter including graphs and footnotes can be found by clicking here.
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