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.