PW
Español

 

PW
Guyana
Surinam


PW
Trinidad

& Tobago
Caribbean

 

Prices
Graphics

 




Very usefull links



PW
Bookstore





Blogspots

The Global Barrel

Tiempo Culural

Gustavo Coronel

Iran Watch.org

Le Blog des
Energies Nouvelles

News Links

AP

AFP

Aljazeera

Dow Jones

Reuters

Bloomberg

Views and News
from
Norway

 

PW
Bookstore

 

 

 

Biden could revisit renewable fuel mandate to give drivers relief at pumps

 

 

 

 

 

By Gerson Freitas Jr. and Sheela Tobben / Bloomberg

NEW YORK
Petroleumworld 11 15 2021

As U.S. President Joe Biden weighs alternatives to lower fuel prices, one move that could bring immediate relief at the pumps is sparking debate: adjusting the Bush-era renewable fuel mandate.

Drivers could see prices for gasoline fall if refiners were relieved from at least some of their obligation to blend biofuel into the U.S. fossil fuel supply. But such a move could also backfire, failing to slash costs and undermining one of the longest-standing U.S. policies to fight climate change, while at the same time sparking anger from the powerful agricultural lobby.

Biden’s popular support is being eroded by soaring prices for everything from energy to food and shelter as U.S. inflation hit its highest level since 1990, prompting the president to make fighting the surge “a top priority.” Biden has also vowed to take action after the OPEC+ coalition dismissed his calls for extra crude oil supplies, though his available options may be limited.

The so-called Renewable Fuel Standard was authorized in 2005 as part of efforts to reduce greenhouse gas emissions and reliance on imported oil. It requires oil refiners and fuel importers to buy and blend renewable fuels such as ethanol into the U.S. fuel supply. If they don’t, they can still meet their quotas by buying tradeable credits known as Renewable Identification Numbers. The cost of those credits have swung wildly this year amid a perceived shortage, adding to a surge in gasoline prices while squeezing small fuel suppliers.

The Environmental Protection Agency issues a proposal each year on how much renewable energy should be available to consumers for the year ahead. The so-called Renewable Volume Obligations determine how many gallons of biofuel refiners will add to the motor fuel mix, which also determines the amount of credits needed to fill the gaps.

“The removal or modification of the RVO mandate would be the single most immediate and effective way to lower fuel prices at the pump,” said John Auers, executive vice president at energy consultant Turner, Mason & Co. Depending on how the mandate is modified and other conditions, the move could potentially reduce retail gasoline prices “in the double digits” a gallon, he said.

‘Backfire Badly’

But some are in disagreement. The extent to which gasoline costs would benefit from a reduction in the use of biofuels is debatable.

“It would backfire badly on them,” Geoff Cooper, president of the Renewable Fuels Association, said in an interview. It would make prices at the pump “even worse” and doing this a week after the United Nations’ COP26 climate conference would send the wrong signal about commitments to reduce carbon emissions, he said.

Many independent refiners have long opposed these mandates, saying the added cost of buying RINs cuts into margins and jeopardize their existence. D6 RINs, which track ethanol blending in gasoline, have climbed from 62.50 cents a year ago to $1.0825. In June, the price reached a high of $1.98.

The EPA earlier this year extended the deadline for refineries to comply with their 2020 blending obligations into 2022, effectively giving them more time to buy RINs. The extension has helped fuel producers save cash as they recover from pandemic-driven demand losses.

For Biden, adjusting the requirement would come at the cost of a potential spat with corn and ethanol producers, which rely on the mandate for a significant share of the demand for their products. Easing the mandate would also bode poorly for the president’s green credentials.

 

_________________________________

By Gerson Freitas Jr. and Sheela Tobben from Bloomberg 

bloomberg.com 15 11 2021

TOP

                                                                                                                                                                                                                                                                                                                                                                                             Contact: editor@petroleumworld.com,


Editor & Publisher:Elio Ohep /
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2021, Elio Ohep A. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2021, Petroleumworld   / Elio Ohep - All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.