Home Energy Analysis Debunks Claims of RFS Opponents

Analysis Debunks Claims of RFS Opponents


New analysis conducted by Informa Economics, Inc. shows that the Renewable Fuel Standard and its associated RIN credits have not played a role in this spring’s higher retail gas prices. In fact – the study found ethanol costs significantly less than gasoline at the wholesale level and is reducing prices at the pump for consumers across the country. According to the report – a fact-based review of developments in the gasoline, ethanol and Renewable Identification Number markets indicates that the RFS in general – and RINs in particular – have not been a demonstrable factor in the rise in retail gasoline prices that has occurred in early 2013.

Renewable Fuels Association President and CEO Bob Dinneen says this independent study’s findings put the claims of RFS opponents to rest – confirming that RINs are not having any noticeable impact on gasoline prices. Dinneen says the facts and data speak for themselves – adding that drivers could realize even greater savings at the pump if refiners and blenders would break down their self-inflicted blend wall and give up their resistance to offering E15 and E85.

The analysis – commissioned by RFA – found RINs are likely contributing no more than four-tenths of one-cent to the retail price of a gallon of gasoline. When accounting for both the ethanol price advantage and the direct cost of RIN prices – the report found the net benefit to consumers from the usage of ethanol is four-cents per gallon of gasoline. The authors say this savings doesn’t account for the indirect benefit ethanol has on gasoline prices by effectively lowering demand for crude oil and clear gasoline or the enhanced octane value of ethanol over gasoline.

The high gasoline prices in 2013 – according to the report – can be explained by several factors unrelated to the RFS, RINs or ethanol use. The analysis notes there is a distinct seasonal pattern to gasoline prices and crack spreads. The analysis continues that the increase in gasoline prices and crack spreads during the first quarter of 2013 has been generally consistent with increases experienced in 2011 and 2012 – despite the fact that conventional ethanol RIN prices averaged three-cents during the first quarter of 2011 and two-cents during the first quarter of 2012. The Informa report also cites Department of Energy analysis in noting that higher gasoline prices have stemmed from planned and unplanned refinery maintenance; the low starting level for gasoline crack spreads going into 2013; preparation for seasonal fuel specification changes; and developments in global product demand.

Source: NAFB News Service