Ag Policy Blog

Sen. Charles Grassley, R-Iowa, and a group of lawmakers has been asking for reassurances that the U.S. Environmental Protection Agency stands by its analysis that the price of renewable identification numbers, or RINs, do not cause significant harm to refiners.

So far, the EPA has not responded to a Jan. 11, 2018, letter to Administrator Scott Pruitt that was previously unreleased to the press.

In the letter, http://bit.ly/…, sent to Pruitt ahead of what was expected to be meetings at the White House to discuss the Renewable Fuel Standard, Grassley, along with Sens. Deb Fischer, R-Neb.; Joni Ernst, R-Iowa; John Thune, R-S.D.; and Roy Blunt, R-Mo., sent a list of questions about the RINs issue.

Grassley said in a press statement on Thursday that he's concerned EPA has changed its mind on how RINs prices affect refiners.

"We are told that action needs to be taken to lower RIN prices to help refiners," Grassley said.

"But under both Democratic and Republican administrations, EPA has found that RIN prices don't affect whether refiners are successful or not. That was true of President Obama's EPA and it's true of President Trump's EPA. Several of my colleagues and I asked EPA about this in light of calls to make changes to the RFS, but we've yet to receive a response. I'm always willing to engage in good-faith discussions on any issue, but the facts need to be on the table. Changing the RFS based on misinformation and baseless arguments isn't fair to the thousands of farmers and workers throughout rural America whose livelihoods would be harmed if the RFS were undermined."

Grassley said EPA determined in November 2017 that refiners are unharmed by RINs costs, http://bit.ly/….

"After reviewing the available data, EPA has concluded that refiners are generally able to recover the cost of RINs in the prices they receive for their refined products, and therefore high RIN prices do not cause significant harm to refiners," the agency said.

In May 2015, http://bit.ly/…, EPA found, "the obligated parties were generally able to recover this increase in the cost of meeting their RIN obligations in the price they received for their petroleum-based products in 2013."

Small independent refiners have been asking EPA for waivers to the RFS, because of cost concerns.

When it comes to small refiners, some of them may be unable to capture extra costs incurred as they move their product downstream.

A refiner makes the fuel and sells it to the wholesale market. They will blend with a renewable fuel if they have the capacity to do so. In that instance, a refiner would purchase the renewable fuel with the RIN attached, blend it, sell the finished product at the wholesale point, or take it straight to retail.

If a refiner doesn't have blending capacity, they sell unblended fuel into the wholesale market. That is where another party would blend it with renewable fuel. In that scenario, the refiner would need to acquire the RIN in the open market separately to meet their renewable volume obligation.

Though many studies have found RINs costs are passed through in the price of fuel, an independent refiner that doesn't have blending capacity generally is unable to pass through costs.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

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