D.C. Watch: Congress revisiting ethanol mandates

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There are increasing efforts in Congress and in the public media calling for the Renewable Fuel Standards (RFS) mandates to be revisited. The price of RINs (renewable identification numbers) has soared through the first three months of the year and oil industry representatives claim the rising prices for RINs are driving up retail prices for gasoline.

The RFS requires the blending of 13.8 billion gallons of ethanol this year but ethanol production is currently running at a rate of a bout 12.3 billion gallons. The gap can be met in part by redeeming the extra RINs created in prior years when ethanol production exceeded RFS requirements. But the gap may get even bigger in 2 014 when the mandate rises to 14.4 billion gallons and bigger yet in 2015 when the mandate re aches 15 billion gallons.

Those mandates can only be satisfied if sales of E-15 and/or E-85 incr ease substantially. Or, there is an increasing possibility that Congress will at least consider changing the amount of ethanol that must be used, as some are demanding.

A final ruling forcing companies to increase the amount of E-15 available is expected soon from the Environmental Protection Agency (EPA). As noted above, the increase in E-15 is needed because total U.S. gasoline use is near 135 billion g allons, putting the “blend wall” at 13.5 billion gallons of ethanol, and yet the RFS mandates of 13.8 billion gallons this year and 14.4 billion gallons next year can’t be met with current E-10 blends. The problem is that almost no retail outlets sell E-15.

Retailers need special tanks and/ or special pumps to sell both E-10 (which can be used in any vehicle) and E-15 (which can only be used in cars and light trucks made after 2000). How this all gets worked out remains very unclear. Legislation that would change dairy policy will be introduced next week by Senators from New York and Maine.



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Brian    
VA  |  April, 05, 2013 at 02:08 PM

RFS and RINs increase the price of our fuel to operate our farms, they increase the price of the feed we must buy for our animals, they increase the costs of shipping things to and from our farms, they increase our maintenance costs and create a trading commodity that adds no real value to the economy. There is no benefit to them. We all would be better off using dollar bills for fire starters-- At least we would be getting something of value for our dollars.

bob    
Ill  |  April, 05, 2013 at 10:07 PM

you are right on all counts!!!! when ethonal start we were told cheap feed out the back side. 300$ distillers 8.00 corn 350$ hay are not cheap feed on 18$ milk.good for grain framers to buy more 10-15000$ per acrer land,hope that works with 4.50$ corn and no livestock left to eat it.

Suka Madek    
Chicago  |  April, 07, 2013 at 07:53 AM

There should be NO mandate, you could give the renewable fuel gang money til the sun don't shine. But give these theives a mandate and they own you. The only thing dumber than a politician is... well there's nothing dumber than a politician, sorry just the cold hard truth.

Ken    
Batavia, NY  |  April, 08, 2013 at 10:44 AM

I agree, kill the RFS mandate. The oil companies can go back to using MTBE to reduce air pollution. Then we can have more water polluted from the MTBE. I kind of miss MTBE in the water supply after they switched to using ethanol as the oxygenate in gasoline. By the way, how come I never heard any dairy farmers complain about subsidies when corn was about $2.50 a bushel and subsidized? Hasn't milk been subsidized in the past also? Did anyone besides the taxpayers complain then?

Brian    
VA  |  April, 10, 2013 at 09:48 AM

Ken, please stay on topic. MTBE doesn'r have anything to do with RFS. Also, the argument against goberment farmfare is not an argument for mandates which harm an economy without benefits.

Brian    
VA  |  April, 10, 2013 at 12:44 PM

Ken, please stay on topic. MTBE has nothing to do with RFS. Also, Farmfare is another topic for discussion as well-- Not related to RFS.


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