Advanced BioFuels USA

by David Kruse (The CommStock Report/Spencer Daily Reporter)  From a subscriber: “I asked my local Cenex manager why the price of E85 was still high. E10 has dropped 43 cents in the last couple of months and E85 hasn’t changed from $1.94. He told me that the RIN price has often been close to 60 cents but now is only 9 cents. … “

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My answer:

When RINs were selling for 60 cents to $1 a gallon, refiners blended ethanol. When they are 9 cents gallon they buy RINS to fulfill their RFS obligation and forget about blending ethanol. It was Ted Cruz’s objective to reduce the price of RINs to a dime and he has succeeded. The issuance by EPA of 2.25 billion gallons of RIN waivers to “small” refiners absolved them of the obligation to blend ethanol or buy RINs. This significantly lowered the demand for RINs and therefore the price of RINs. Scott Pruitt’s replacement, Andrew Wheeler, announced that they may grant waivers to 15 more refineries. This has produced cheap RINs so they buy those rather than blend ethanol. That is why the price of ethanol has recently hit a 13-year low. The national blend rate has declined and ethanol stocks have grown so the price weakens and ethanol margins are terrible. Thank you President Donald Trump.

Pruitt’s intention was to undermine the enforcement mechanism of the RFS and he has succeeded.

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Remember Carl Icahn was Trump’s first deregulation advisor and he owned a refinery. He recommended that Pruitt get the job at EPA and then Pruitt gave Icahn a RIN waiver. How was that for draining the swamp? Trump used the Branstad’s to paint himself as a strong ethanol backer when what he has done is stab ethanol in the back. Yet many in commodity leadership and ethanol associations have remained quiet … because they are republicans who put their party ahead of their industry?

It is great that you took my advice on E30. I filled up for $1.99 a gallon recently and as you and I know, the idea that you cannot use it without a flex fuel vehicle is bunk. I put over 200,000 miles on my last pickup using E30 and am starting right out using E30 in my new one. Approving E15 for summer use will come no-where close to offsetting the damage being done to the RFS by the issuance of RIN waivers.

FAPRI says that if the EPA continues its practice of approving RIN waivers to small refineries that over the next six years we will lose 4.6 billion gallons of ethanol consumption costing the industry $20 billion. 

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(U.S. Senator Chuck) Grassley thinks that diluting the RFS with RIN waivers was just step one of a comprehensive plan “by EPA to systematically undermine the RFS, and if the reports are accurate, may now use the weakened state to justify gutting the biofuels program further.”

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The EPA wants to do a reset of the RFS in a new rule making process in January, where they lower the applicable feedstock target to account for the RIN waivers. Due to the RIN waivers, the ethanol target will not be met so they argue that allows the EPA to reset it reducing it. Instead of a 15 billion gallon corn feedstock target they may reduce it to 14.24 billion gallons for example.  READ MORE

LETTER: Protect Renewable Fuel Standard (Herald Review)

LETTER TO THE EDITOR: Renewable fuel law must be enforced (Herald & Review)