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Big Oil is Manipulating the RIN Market

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In response to the release of the fifth white paper on the Renewable Fuel Standard (RFS) from the House Energy and Commerce Committee, the Executive Vice President of the American Coalition for Ethanol (ACE) Brian Jennings submitted comments showing how the RFS is working and Big Oil companies are desperate to repeal it so they can control the fuel market.

 

Jennings full comments can be read here. Brief excerpts are highlighted below.

 

With respect to a question from the Committee asking who is responsible for the rise in RIN prices: “The question isn’t what is responsible for the rise in RIN prices, rather, the questions are who is responsible for the rise in RIN prices and why. RIN prices have risen this year because oil companies don’t want to comply with the law.  While oil companies were reluctantly comfortable with 10 percent ethanol in all gasoline, they prefer to control the remaining 90 percent of the gasoline market by preventing the sale of E15 and other mid-and-high-level blends of ethanol called for under the RFS.”

 

How the oil industry is manipulating the RIN market: “That oil companies are willing to pay $1 or more for a RIN, just to avoid buying ethanol at 70 cents per gallon less than gasoline and offering consumers safe, tested, and affordable blends such as E15 and E85, should tell Congress everything it needs to know about the RFS: it is needed now, more than ever. The lack of transparency in the RIN trading marketplace leaves open the possibility that unscrupulous traders or even oil companies could create skewed transactions for the purpose of manipulating the RIN market for financial gain or to make a political point. If Congress reduces or repeals the RFS, it rewards oil companies’ bad behavior, ensures they will control 90 percent or more of the gasoline market, and forces consumers to pay more for dirty fuel by restricting their access to more affordable and cleaner blends such as E15 and E85.”

 

Why the RFS was enacted and how EPA has implemented it: “The RFS wasn’t enacted by Congress to make life comfortable for oil companies or vertically-integrated food conglomerates who managed to operate quite comfortably before the RFS and continue to generate handsome profits today. The RFS was enacted to dramatically improve the way we produce and use transportation fuel, to reduce our dangerous dependence on foreign oil, to create jobs, to reduce gas prices and greenhouse gases, and to spark innovation in new technologies. In its wisdom, Congress provided EPA with appropriate authority and flexibility to implement the RFS, and EPA has judiciously and exercised that authority.”