U.S. Sens. Chris Coons, D-DE, and Bob Casey, D-PA, joined with House members in New Jersey and Pennsylvania in sponsoring legislation aimed at dealing with the system for monitoring the refining of ethanol.
A coalition of independent refineries, including Delaware City refinery owner PBF Energy and union workers have pushed for a change in Renewable Identification Numbers (RINs). Indie refiners say the system could put their operations out of business.
“The Biden administration has repeatedly promised to restore stability and certainty under the RFS, and reset the program back to its original intention. Originally, RINs were envisioned as administrative fees and predicted to trade for pennies apiece,” the Fueling American Jobs Coalition stated. “The Safeguarding Domestic Energy Production & Independence Act offers a commonsense solution. Issuing a fixed-price RIN would give independent refiners the ability to purchase RINs at low, sustainable, and predictable price – enabling them to better plan and invest for the future.”
The Safeguarding Domestic Energy Production & Independence Act comes after the Environmental Protection Agency posted its proposed biofuel blending levels for 2023, 2024, and 2025.
The decision by the Biden Administration would create more volatility in the system, critics claim.
Coons, a close ally of Biden, Coons has parted company with the administration on the issue.
The Fueling American Jobs coalition, offered the following statement.
“Independent refiners are critical to America’s energy security and support tens of thousands of high-quality, family-sustaining jobs. However, the unpredictable and unsustainable costs of complying with the RFS has created tremendous financial strain on America’s independent refiners. In recent years, the broken compliance program of the RFS has enriched multi-national oil conglomerates at the expense of small and independent American refiners, reducing our nation’s refining capacity and eliminating thousands of jobs.”
Due to the physical makeup of ethanol, most independent refineries are unable to blend it into the fuel supply on-site. Instead, under the RFS, independent refiners have to purchase compliance credits known as RINs to demonstrate compliance. RINs can be bought or traded with little oversight.
Big oil by contrast, can blend more biofuel into gasoline than required and then later sell the RINs to refiners who need to comply with clean fuel standards.
Independent refineres state that RIN prices have soared. Credits previously traded for pennies apiece, but now cost around $1.60. Independent refiners have stated that they are paying more for RINs on a yearly basis than they do on salaries, benefits, maintenance, and utility costs combined– creating long-term financial uncertainty that led some refineries to close, according to the coalition.
The coalition estimates that the RIN system adds 20 to 30 cents to the price of a gallon of gasoline.
