Des Moines Register

October 2, 2017

By Steve Roe

In the decade since the Renewable Fuel Standard (RFS) has been in place, it's been a tremendous success, providing a cleaner, lower-cost choice for consumers and boosting local economies.

However, two recent actions by Environmental Protection Agency administrator Scott Pruitt, and a rumored third proposal, threaten to reverse the progress made and put refiners — not consumers — in the driver's seat.

Administrator Pruitt has indicated he wants to lower the price of Renewable Identification Numbers (RINs), the credits used by refiners in the RFS to add flexibility and lower cost in the program. That's driving EPA's rationale for proposing to lower the 2018 Renewable Volume Obligations (RVO), the first time the agency has lowered the RFS from the previous year's level.

Administrator Pruitt's RIN price destruction campaign is not ending there. Recently, EPA released a Notice of Data Availability, seeking comment on another idea hatched by the oil industry — to lower the 2018 RVO's equivalent to potential biodiesel imports, arguing that the RFS was intended as a domestic fuel program and imported volumes should not be accounted for in determining available supply. 

The problem with this approach is obvious. First, reducing the RVO will not discourage imports from entering the U.S., meaning that available supply will remain the same, but demand will have been butchered, thus lowering prices for refiners. Second, for the U.S. to use a domestic energy program to discourage imports has "World Trade Organization violation" stamped all over it.

Meantime, a rumor circulating now suggests EPA is considering a proposal to allow RINs attached to exported gallons to count toward a refiner's RFS obligation. Currently, those RINs are retired because the statute requires the renewable fuel be used in the United States. It is a domestic energy program, after all.

One might conclude that if EPA were to lower the RFS to account for imports, it would increase the RFS to account for exports. But that's apparently not what EPA is contemplating. The objective here is to add about 1.2 billion RINs (the approximate amount exported today) to an already saturated RIN market, cratering the market and undermining any future investment in biofuels infrastructure or technology.

Administrator Pruitt is missing a critical point — lowering the price of RINs does not translate into consumer savings. RINs are free. When ethanol producers sell a gallon of biofuel to a gasoline marketer, EPA requires them to supply an RIN, as well. The RIN market is created when obligated parties separate them from the gallon of biofuel and sell them to another obligated party that has failed to blend enough ethanol to meet their obligation.

Consumer prices are unaffected.

Whenever President Trump visits Iowa, he extols the virtues of ethanol, American energy and the RFS. It is past time for the President to act on his commitment. He must rein in his EPA administrator, who is implementing the RFS in a way that accommodates oil companies, not renewable fuels and certainly not consumers. He must make the RFS great again.

Read the original article: Trump Must Make the Renewable Fuel Standard Great Again

Renewable Fuels Association

October 3, 2017

By Emily Druckman

The Environmental Protection Agency’s recent “consideration of drastic, unprecedented changes to the Renewable Fuel Standard” would undermine the future growth of the biofuels industry, the Renewable Fuels Association and 10 other biofuel groups wrote today to President Trump. In the letter, the groups urged the president to ensure the administration remains firm in its commitment to the U.S. biofuels industry.

In July, EPA proposed to reduce the total 2018 RFS renewable fuel blending requirements below the levels required in 2017 and late last month, the agency said it was considering further reductions to the 2018 RFS volumes. This is in addition to rumors that EPA is considering a proposal in which U.S. biofuel export volumes would count towards compliance with the RFS.

“If the proposed changes are finalized, EPA’s actions would cause severe harm to our industry, undermining your efforts to drive economic growth and secure America’s status as the global leader in biofuel production. We urge you to act quickly to continue to grow the RFS….” the groups wrote.

In the letter, the groups clarified that they oppose any weakening of the 15 billion gallon conventional biofuel requirement, believe the proposed reduction of the 2018 advanced biofuel requirement is unwarranted and the current treatment of imports and exports under the RFS should be maintained.

“President Trump has been a strong and consistent supporter of fuel ethanol generally and the RFS specifically,” said RFA President and CEO Bob Dinneen. “However, recent proposals by EPA appear to run counter to the president’s renewable energy vision. We want to ensure a strong RFS is maintained, providing consumers with the cleanest, lowest cost and highest octane fuel on the planet.”

To view a copy of the letter, visit: http://www.ethanolrfa.org/wp-content/uploads/2017/10/POTUSletterOct3.pdf.

Read the original release: RFA Signs Letter Urging President Trump to Maintain Strong Commitment to Biofuels