Good morning all,
Worries over last week’s Chapter 11 filing by the massive Philadelphia Energy refineries have made their way to Delaware.
As a story from Delaware Public Media indicated, the skyrocketing cost of the RIN (Renewable Identification Number) system used to track the use of ethanol threatens all East Coast refineries. (See story link in our Reading list section below)
Granted, Philadelphia Energy has problems that go beyond RIN. Most apparent is the crushing debt load faced by the private-equity owned company that acquired the Sunoco refineries.
PBF’s site in Delaware and the four-refinery company is in much better shape than Philadelphia Energy. Still, the current price level for the ethanol tracking system is not sustainable.
Forces in the farm belt have thwarted efforts to reform the system that may actually lead to dirtier air.
That’s because the benefits of ethanol to the air are offset to some extent by refineries having less money to invest in pollution control systems. Now, Environmental Protection Agency Secretary Scott Pruitt is also calling for RIN reforms after some back and forth.
One thing we do know – making ethanol out of corn kernels is expensive and wasteful since corn is a key part of the food supply and ethanol has to be transported by rail.
One option, an Iowa DuPont plant that made ethanol from corn stover (waste in the field after the corn is harvested) has been shut down and put up for sale.
Whether reforms to this messed up system take place in time to avoid further damage remains unclear.
On that happy note, enjoy your Monday. The newsletter returns tomorrow. – Doug Rainey, Publisher.
