Senators ask McCarthy to outline response to RIN price increase

By Erin Voegele | March 21, 2013

Sens. David Vitter, R-La., and Lisa Murkowski, R-Alaska, have sent a letter to U.S. EPA administrator nominee Gina McCarthy, asking her to outline “how she will protect American citizens from rising gas prices due to the rising cost of ethanol renewable identification numbers.” Vitter is the top republican on the Senate Environment and Public Works Committee, and Murkowski is the ranking member of the Energy and Natural Resources Committee.

In the letter, the senators note that the price of RINs has increased substantially recently, reaching as high as $1.10, and cite media reports that have blamed the price increase on declining gasoline demand, the blend wall, unrealistic renewable fuel standard (RFS) mandates, and fraud. The letter also implies RINs are increasing the price of gasoline.

Vitter and Murkowski asks McCarthy to “utilize any and all existing regulatory authority and flexibility to address the issue of rising RIN costs and alleviate the threat of increased consumer fuel costs.” They also ask her to issue a response within 14 days that includes a detailed plan on how she plans to address the concerns they note in the letter.

“This issue will remain the focus of significant congressional interest as more reports and studies are published on how RIN prices impact the nation’s economy,” said the senators in the letter. “In the meantime, we encourage you to take action to protect working families and address yet another implementation issue with the RFS. We look forward to working with you to accomplish these goals.”

While Vitter and Murkowski question the RFS, at least one federal lawmaker has spoken out noting that its incorrect to simply blame increasing RIN prices on the RFS. During a short speech given in the U.S. House of Representatives, Rep. John Shimkus, R-Ill., noted that “RINs are given away for free by ethanol and other renewable fuel producers to refiners and only have value in the submission of the report in February.” He continued, noting several questions need to be asked on why such dramatic price shifts are being reported in the market. “Are speculators at work?” he asked. “There is an excess of over two billion RINs. Why is that not proving and providing stability?”

Shimkus’ speech can be viewed online here



2 Responses

  1. Steve_V



    Unfortunately this isn’t about protecting the consumer or better vehicle performance or even emissions. This is primarily about protecting market share and the oil company’s way to use the press to misinform the public. The oil industry has done everything to stop ethanol including the fabrication of stories about car damage. This issue with RIN’s or EPA approval of E15 would be hugely drummed out in the media if consumers really knew what they are putting in their gas tank. Unfortunately most regulators don’t know. The oil industry will fight to protect market share as well as stop any competition for octane. Once consumers realize that if they can purchase higher octane at a lower price, suddenly consumers will also see the lowest cost per mile with E15 or E20. E20 has better octane and performance than any premium gasoline on the market today. Not only can ethanol displace market share but by octane benefiting vehicle efficiency, ethanol can reduce the total demand for liquid fuels. This is the main reason the oil guys don’t like more ethanol. They could care less about the consumer wallet or emission. Just ask why EPA never uses consumer 87 octane fuels when testing vehicles.

  2. Greg



    Steve, Fabrication of car damage? Refiners are exposing themselves to claims of engine damage due to E15 voiding car warranties. If the auto manufactures, or even RFA were to indemnify the refiners from these claims then E15 would hit the market place very quickly. You're also sadly misinformed if you think this is an octane fight, and that consumers will be able to buy higher octane fuel for a cheaper price. Refienrs will always strive to blend 87 octane regardless of whether it contains E0 or E20. To blend 90 when you're trying to make 87 is giving money away.


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