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Home » Deliver Dispense, Federal Regulation, Infrastructure, Opinions, Policy

Business and Consumers Will Both Lose if Renewable Fuel Standard Is Changed

Submitted by on May 8, 2017 – 8:29 pmNo Comment

by Max McBrayer (The Hill/RaceTrac Petroleum)  …   My perspective comes from over 30 years in the fuels business. Currently, I am chief supply officer of RaceTrac Petroleum, a fuel retailer and operator of more than 700 convenience stores from Texas to Virginia. I am also the president of Metroplex Energy, a fuel supply and trading company and subsidiary of RaceTrac. These positions provide me with a unique perspective. RaceTrac is not an obligated party under the RFS, while Metroplex is an obligated party for a portion of its business. Under current law, refiners, fuel component blenders and importers are obligated parties.

The market has completely adapted to this set of regulations. Mr. Langer (Andrew Langer of the Institute for Liberty) asserted in his April 29 article that 150,000 jobs would be lost if the point of obligation, or the point at which gasoline refiners must comply with the RFS mandate to blend renewable fuels into gasoline, was not changed. Many of the jobs, he claims, would be in trucking and the convenience store industry. However, both the American Trucking Association and the National Association of Convenience Stores oppose changing the point of obligation.
Rather than “draining the swamp” as Langer suggests, his new regulatory framework would engorge it. Indeed, a myriad of new regulations would be required to enforce a program that would have significantly more regulated parties. Many of these would be small businesses, which would be unable to handle this new regulatory burden. Changing the point of obligation would actually cause the very job losses that Langer fears.
Additionally, Langer asserts that Renewable Identification Numbers (RINS) are generated at the point of obligation. This is simply wrong. Biofuel manufacturers create RINS and are not the obligated party.
Ethanol RINS peaked at approximately $1.50 per gallon and are currently trading at approximately $.50 per gallon, far below the value of ethanol.
Finally, Langer claims that major oil companies run large chains of stations, and argues that changing the point of obligation would reduce fraud. However, over 96 percent of retail fuel outlets are owned by independent businesses, not the refineries. The only fraud that has been uncovered in connection with this program happened at the biofuel producer point and not at the obligated party level.  READ MORE and MORE (The Daily Caller) and MORE (Capital Press) and MORE (Biofuels Digest) WATCH VIDEO (Main Street Energy Alliance)


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