Ethanol and the Renewable Fuel Standard were blamed for refinery closures in the Northeast at a recent hearing of the Joint Economic Committee. Now Renewable Fuels Association President and CEO Bob Dinneen is trying to set the record straight with a letter written to Committee Chairman Bob Casey – a Pennsylvania Senator – and Vice Chairman Kevin Brady – Texas Representative. According to Dinneen – any reasonable and honest analysis of the situation reveals a host of economic factors completely unrelated to the RFS led to the shuttering of the refineries. He goes on to say that a fair examination of the factors affecting gas prices in the Northeast would have shown that ethanol and the RFS have nothing to do with the recent refinery closures and that ethanol is actually helping to reduce prices at the pump.
Dinneen outlines two factors that have led to the closure of East Coast refineries. First – he says oil acquisition costs for East Coast refineries are substantially higher than for refineries in other regions because they cannot process the lower-cost types of crude oil that are increasing in supply in North America. Second – Dinneen notes that demand for gasoline and other finished refinery products has fallen due to record high crude oil prices. Dinneen also points out in the letter that the owners of the shuttered refineries didn’t mention ethanol or the RFS as precipitating causes of their economic difficulties when announcing the closures.
Ethanol – Dinneen says – is actually the best tool available today for exerting downward pressure on oil and gasoline prices. He says the facts refute the testimony given before the committee against ethanol and it should be disregarded.
Source: NAFB News service