A Showdown In RFS And RINs In The Offing? EPA To Move Biofuel Past The "Blend Wall" -- RBN Energy -- August 8, 2016

Active rigs:

	8/8/2016	08/08/2015	08/08/2014	08/08/2013	08/08/2012
Active Rigs	34	73	193	182	199

The reason the RBN story below is important, from The Washington Times:

The Environmental Protection Agency’s move to add more ethanol to gasoline will wreak havoc on lawn mowers, snow blowers, boats and even cars, say critics.

Mixing an additional 700 million gallons of ethanol and other biofuels into the nation’s fuel supply to meet a goal of 18.8 billion gallons in 2017 will raise the biofuel percentage to 10.44 percent, or past the “blend wall” after which car engines can be damaged, said Heartland Institute research fellow Isaac Orr.

“It’s hard for anyone to argue that the renewable fuel standard has been a good policy, and the Environmental Protection Agency’s decision to increase the amount of ethanol in the nation’s fuel supply means this train wreck of a policy will continue for at least another year,” Mr. Orr said in a Thursday statement.

“Owners of small engines like lawn mowers, snow blowers, and boats are hurt by ethanol mandates because ethanol is hard on these engines,” he said.

RBN Energy: is there a showdown on the RFS and RINs in the offing?

Renewable Identification Numbers (RINs) have grabbed the attention of refiners this spring and summer, and for good reason. The price of RINs –– ethanol credits used by refineries to prove compliance with the federal Renewable Fuel Standard –– have soared, and the credits are having an outsized negative effect on some refiners’ costs and profitability. Part of the RIN price spike can be attributed to concerns that there may not be enough to go around this year, and that the situation in 2017 may be far worse. But the rocketing cost of the credits is also raising questions about whether the largely unregulated and opaque RINs market is being manipulated or even cornered by those hoping for a quick, Powerball-size profit. Today, we continue our review of the RINs market with a look at which types of refiners are hit hardest by high RIN prices, and at whether we might be heading off a RIN-availability cliff.

Imagine for a moment that your biggest monthly bills weren’t your mortgage, your car payment, and maybe child-care or private-school tuition but, say, the cost of shampoo or pet food or paper towels. You would know something was seriously out of whack, yes? Well, consider the fact that for a number of U.S. refineries, their biggest operating cost in the second quarter of 2016 was not for labor or natural gas or electricity, but for RINs – paper credits created by the Environmental Protection Agency (EPA) to help ensure that the provisions of the Renewable Fuel Standard (RFS) are being complied with. Few guessed we’d end up here, with RIN prices approaching $1/credit, and no one can say with certainty what 2017 will bring. Still-higher RIN prices? More merchant refiners getting into the fuel-blending business or even the retail gasoline biz to mitigate their RIN risk exposure? A complete reworking of the RFS and the RIN program by EPA or Congress?  In the land of government mandates, it seems like anything could happen.