Ethanol and oil interests lost their chance to speak to White House officials yesterday. However, citizens passionate about both commodities continue to advocate for specific reform proposals. A senator notes “these discussions have come a long way since the only solution was capping RINs.”
Senator Chuck Grassley (R-IA) Tuesday praised farmers and biofuel producers campaigning for sustained biofuels sales, rural economies and jobs in the Heartland. Grassley stresses the importance of advocating for a protected Renewable Fuel Standard (RFS).
He further encourages these individuals and groups to continue to reach out to their elected officials in Washington, D.C.
“Rural America is in the midst of a downturn, mostly because of low grain prices,” Grassley said. “Some oil companies want to take another $40 per acre out of rural America because their management made bad bets in how the refinery ought to be run. And that $40 would come because of less ethanol use. Farmers and biofuel workers need to continue to engage their leaders in Washington on this very important issue.”
Iowa State University recently examined the leading Renewable Fuel Standard reform proposal: a cap on D6 RIN prices between $0.10/gallon and $0.20/gallon for a Reid Vapor Pressure (RVP) waiver, or year-round sales of E15. The study further evaluated the demand for E15 and E85 under the reform proposal.
The study’s findings are as follows:
- Year-round sales of E15 would encourage retailers to sell the fuel. However, capping D6 RIN prices would reduce consumption of E15 and E85.
- Furthermore, a cap on D6 RIN prices between $0.10/gallon and $0.20/gallon would likely reduce the effective ethanol mandate from 15 billion gallons to about 14.3 billion gallons in 2018.
- Additionally, unless increased ethanol exports compensate for the reduced mandate, corn price would decrease under the proposal’s D6 RIN price cap.
Senator Grassley believes bureaucrats are seriously considering alternatives to capped RIN prices. Grassley remains optimistic despite having little knowledge of further progress made regarding those alternative considerations.
“There are still people in the Administration listening to Cruz and the refiners and pushing that point of view. I also know there are people in and outside the Administration that have other ideas that are being considered. Then (there’s) the positive comments of EPA Administrator Pruitt yesterday – looking at more transparency of the RINs market and maybe having an impact on speculators. They might even be considering outlawing speculation in RINs,” Grassley said.