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When Refiners Cry Wolf, Who Will Be Fooled?

Submitted by on May 27, 2014 – 12:28 pmNo Comment

by Brent Erickson (Biotechnology Industry Organization/Biofuels Digest)   EPA’s proposed rule went too far in correcting a problem largely of the refiners’ own making.  It’s in the nation’s interest to put the final RFS rule back on course.

Last year, it appears that the Philadelphia area oil refiners had some role in convincing the White House to weaken or dismantle the Renewable Fuel Standard so they could save millions of dollars in compliance costs, a recent Reuters article alleges.

Yet just last month, in early April, the same refiners failed to convince a U.S. Court of Appeals that the RFS places any undue financial burden on them. In fact, the Court case revealed that the refiners’ own actions brought on some of the financial costs. Meanwhile, the changes that the administration proposed for the RFS could undercut advanced biofuel producers and the potential jobs they would create.

Some government officials forget that when the RFS was written, the refiners asked that a credit trading system be put in place to provide flexibility in compliance. A few refiners now have chosen to buy RINs instead of blending biofuels, while howling in mock pain as if this was forced on them. …

When the price of D6 RINs began to rise in the first quarter of 2013, the national and Philadelphia area refiners began aggressively lobbying against the RFS.  …  The irony is that API had previously issued a report on why Sunoco’s refineries were in trouble, in which they mentioned the RFS only as an afterthought, not a major reason.

The Court rightly found Monroe’s and PBF’s arguments “meritless” just one month after the case was argued. One relevant factor in the decision was that in 2013, the advanced biofuel industry generated more than enough RINs to meet the RVO – indeed with some extra to be carried forward to 2014. The Court upheld EPA’s authority to set the RVOs at the statutory level, “so long as sufficient RINs exist for obligated parties to meet the fuel standards.” BIO has long argued that the RFS gives our industry an assurance that if we can produce commercial volumes of advanced biofuels, the transportation fuel market will remain open to them.

Another relevant factor in the Court decision is that Monroe had plenty of time and notice to establish its compliance strategy. Monroe itself made the decision not to blend any biofuels and instead rely solely on purchasing RINs.

Nobody would win if the union jobs in Philadelphia and the surrounding states are lost. But clearly, they would be lost as a result of the business decisions made by Monroe, PBF, and others, not because of the renewable fuel standard or RIN prices. And construction and startup of new advanced biofuel biorefineries are creating thousands of new jobs, many of them also union jobs, for others in different regions of the country. One new cellulosic biorefinery has had as many as 1,000 workers on site as it nears the start of production this year. That means welders, boilermakers, pipe fitters and more are finding new jobs.  READ MORE

 

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