You Pay, They Profit: How The RFS Costs Americans $30 Billion Each Year

How the RFS Works — And How It Puts Independent Refiners At Risk

When ethanol is blended into gasoline, a tradeable credit called a “Renewable Identification Number” — or RIN — is created, and refiners have to collect the requisite amount of these credits to demonstrate compliance with the law. Refining is the only industry in the U.S. that the federal government requires to purchase credits to prove an ingredient has been blended into a product.

RINsanity: How Big Oil Blenders, large convenience store chains, and Wall Street speculators profit at the expense of independent refiners and American consumers

When the RFS first became law, it was expected that RINs would trade for pennies apiece. On May 9, 2022, RINs were trading at $1.60 per gallon — a 1,200 percent increase since January 2020. RIN prices are driving up operational costs, essentially becoming a hidden tax on U.S. independent refiners and American consumers alike, adding 20 to 30 cents on every gallon of gasoline.

According to Casey’s own earnings highlights, profits were up as the company, “sold $18.7 million in renewable fuel credits (RINs) in the first quarter, an increase of $15.3 million from the same quarter in the prior year.”

“Thanks to the highest RIN values ever, the company realized an additional $7 million to $8 million for the sales,” the Oil Price Information Service (OPIS) reported at the time.

More recently, Murphy USA announced that RINs added 11 cents per gallon of profit to their first quarter operations in 2022.

This broken compliance structure continues to enrich Big Oil Blenders, large convenience store chains, and Wall Street speculators at the expense of independent refiners and American consumers alike.

Fix the RFS: How the Biden administration can reform the federal biofuel mandate to lower costs for consumers

Figure 1 below demonstrates how, at current RIN values, the RFS is costing Americans more than $30 billion each year. Lowering the cost of RINs is one of the few policy measures that would have an immediate, beneficial impact on retail prices for gasoline consumers.

As Energy Policy Research Foundation President Lucian Pugliaresi testified in front of the U.S. Senate Environment and Public Works Committee earlier this year, “the RFS program is raising gasoline prices by approximately 30 cents a gallon.

The Fueling American Jobs Coalition is calling on President Biden, EPA, and Congress to make urgently needed structural changes that will support the original objectives of the RFS — preserving America’s energy independence and security — without putting independent refiners out of business, eliminating thousands of high-quality refinery jobs, and causing higher consumer gas prices at the pump.

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Fueling American Jobs Coalition

Fueling American Jobs Coalition

A coalition of union workers, local gas station owners, small retailers, and independent American refiners fighting to fix EPA’s flawed Renewable Fuel Standard.