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The House Energy and Commerce (E&C) Committee met this week to conduct some much needed oversight of the Renewable Fuel Standard (RFS), the flawed government mandate designed to promote the use of ethanol and other biofuels in the country’s motor fuel supply. While America’s biofuel production and use has expanded exponentially in the years since the RFS was created—to the point where ethanol has become the most economic form of fuel octane on the market—industry lobbyists seldom miss a chance to claim the sector is somehow harmed by not having even larger mandates than those in place today.... Click to Read Full Post 

Recent EIA data and academic research show that ethanol consumption remains robust and on track to outpace last year’s numbers, even despite small refiner exemptions (SREs) and falling RIN prices. So much for the long-held claims of ethanol demand destruction … we hope … but surely there must be a bogeyman out there somewhere, right?

In fact, a new one has emerged just in time. The ethanol demand destruction  myth is now facing competition from a fresh face: The claim that SREs and falling RINs are causing demand destruction to biodiesel. Brace yourself for another round of house-on-fire hysteria.

Yet a close examination of both the facts and history of the biodiesel mandate warns us against crying wolf once again. The stubborn fact remains that domestic biodiesel production is up compared to last year. And if in fact the product is in some way falling short of its potential, the more fair-minded out there would note that U.S. trade policy and a lack of clarity over the federal biodiesel tax credit would be lead factors in creating market uncertainty... Click to Read Full Post

A recent Real Clear Energy piece highlighting the fallacy of ethanol “demand destruction” certainly hit a nerve with the Renewable Fuels Association (RFA), prompting them to issue a detailed, point-by-point response.  Unfortunately, they missed an important part of the Real Clear Energy piece—the part about inappropriate interpretations from specially selected data points. RFA’s reply included more data cherry picking that did not change the central fact that the editorial highlighted: Even with falling RIN prices and small refiner exemptions (SREs), there is still NO evidence of ethanol demand destruction... Click to Read Full Post

Previous posts have highlighted the fact that despite falling Renewable Fuel Standard (RFS) credit prices and small refiner exemptions (SREs) – and contrary to the claims of biofuel lobbyists - domestic ethanol consumption is actually increasing.  Another erroneous claim from biofuel lobbyists relates to demand for fuels containing greater than 10 percent ethanol (“E10”), particularly fuel with 15 percent ethanol called “E15.”  Biofuel lobbyists claim motor fuel retailers need high priced RFS compliance credits – called Renewable Identification Numbers or RINs  - so they can discount E15 to make it competitive with fuels like E10 and ethanol free gasoline.  However, the facts prove otherwise.  As EPA has issued several SREs and RINs have fallen from highs of near one dollar last year to between 20 and 25 cents per gallon in recent months, the data available shows even E15 use is increasing significantly... Click to Read Full Post

One of the latest issues at the forefront of the Renewable Fuel Standard (RFS) debate centers around allowing fuel containing 15 percent ethanol, or “E15,” to be sold year round.  Air quality regulations currently prevent E15 from being sold in the summer months due to its potential for higher emissions.  Biofuel interests have claimed waiving these air quality restrictions would help advance the objectives of the RFS and lower prices for its compliance credits – known as Renewable Identification Numbers or RINs.  Their argument rests on the claim that “more E15 means more RINs” and, thus, lower RIN prices.  Yet in a flat motor fuel demand environment, it is nearly impossible for E15 to make up the gap between the amount of ethanol all vehicles and infrastructure can safely handle and a mandate requiring 15 billion gallons of conventional biofuel... Click to Read Full Post 

HollyFrontier

“HollyFrontier requests that EPA take three specific actions: (1) further reduce the renewable volume obligation using the general waiver authority given the inadequate volume of domestically produced renewable fuel available to obligated parties; (2) implement Renewable Identification Number (RIN) market reforms to increase RIN liquidity and decrease RIN prices; and (3) continue granting small refinery disproportionate economic hardship exemptions as required by the Clean Air Act when circumstances demonstrate a disproportionate economic harm.”... Click to Read Full Post 

HollyFrontier

“HollyFrontier requests that EPA take three specific actions: (1) further reduce the renewable volume obligation using the general waiver authority given the inadequate volume of domestically produced renewable fuel available to obligated parties; (2) implement Renewable Identification Number (RIN) market reforms to increase RIN liquidity and decrease RIN prices; and (3) continue granting small refinery disproportionate economic hardship exemptions as required by the Clean Air Act when circumstances demonstrate a disproportionate economic harm.”... Click to Read Full Post 

During this week's EPA field hearing in Michigan on the 2019 RVO proposal, RFA’s communications staff tweeted out a recycled claim from an old RFA paper with the bold if shaky assertion that “Small Refiner Exemptions Have Already Cost U.S. Corn Growers, Ethanol Producers, and Ethanol Blenders More than $5 Billion in Economic Losses.” (click here for the paper)

The RFA paper is probably most notable for the complete absence of independent sources that it cites in backing up the claims of economic damage it attributes to the exemptions... Click to Read Full Post