Fellow Patriot: The voluntary financial generosity of supporters like you keeps our hard-hitting analysis coming. Please support the 2023 Year-End Campaign today. Thank you for your support! —Nate Jackson, Managing Editor

February 13, 2018

More Evidence the Ethanol Mandate Hurts the Economy

Much of the trouble has to do with a regulatory requirement known as renewable identification numbers (RINs).

Oil refinery Philadelphia Energy Solutions (PES) has a serious beef with the George W. Bush-era biofuel mandate that it says has forced the company into bankruptcy. Unfortunately, other companies face a similar plight absent major regulatory changes. It’s been more than a decade now since Congress stipulated that ethanol be blended with gasoline before hitting the market. It’s a boon for farmers, but it hurts both consumers and refineries like Philadelphia Energy Solution. Much of that has to do with a regulatory requirement known as renewable identification numbers (RINs).

According to The Washington Times, “RINs work to ensure that refiners — who hold the ‘point of obligation’ under law, meaning they are responsible for blending ethanol with gas — meet the yearly biofuels quotas set by the EPA. But many refiners, such as Philadelphia Energy Solutions, don’t have the infrastructure to blend the fuels. In such circumstances, companies use a system that somewhat resembles a cap-and-trade approach: buying unused RINs from larger refineries that have blending capacity and have extra credits to spare. The price of those RINs fluctuates wildly. Just a few years ago, RINs were sold for just a few cents, but they have skyrocketed to well over $1 recently.”

This process is unfair and elicits corruption from major industry players that have better resources and can sell credits for their own benefit. As one energy-sector official explained it: “It’s picking and choosing winners within the oil industry in a way that’s causing some to go bankrupt.” Moreover, when used to support large-scale operations, that money adds up quickly. In fact, PES says crude oil accounts for its biggest expense, but, amazingly, that’s followed in second place by RIN compliance costs. Yet Renewable Fuels Association CEO Bob Dinneen asserts, “If refiners truly want lower RIN prices, the answer is really quite simple: blend more ethanol.” He added, “The very purpose of the [mandate] is to drive expanded consumption of renewable fuels, and the RIN provides a powerful incentive to do just that.”

This is a baffling and self-defeating position to take. Anyone who owns an older vehicle or lawn care equipment knows the mechanical damage that ethanol causes. Despite this, congressional leaders like Sen. Chuck Grassley (R-IA) remain diehard fans of the mandate. According to Grassley, “I’m confident that the Renewable Fuel Standard isn’t harming refineries, that other factors are at work and that the RFS law is working as Congress intended. Once these facts are known, there ought to be an end to the misleading rhetoric blaming the RFS.” Grassley is so invested in this ruse that last October he threatened to sideline Trump’s nominees unless they left the mandate alone.

Unfortunately, Grassley’s support is shared by the Trump administration. Last May, Agriculture Secretary Sonny Perdue announced the mandate would stay intact. At least EPA Administrator Scott Pruitt recognizes the RIN catastrophe. He recently said, “We need RIN reform. It’s something I’ve talked to Congress about. We have to take steps to address this, and I think there are many that understand that.”

But even he went on to explain, “This isn’t getting rid of the ethanol requirement; this is the accounting mechanism to ensure that a certain percentage of our fuel actually has ethanol. So it truly is an enforcement mechanism that is being used in ways that it really wasn’t intended. We need to get reform around that.” What all of them miss is that the RIN situation is just a symptom of a very bad law. The U.S. is awash in oil, but that production can’t be maximized unless the biofuel mandate is repealed in its entirety. At least the Philadelphia Energy Solutions ordeal provides another good reason to keep trying.

Start a conversation using these share links:

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!

The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)


“Our cause is noble; it is the cause of mankind!” —George Washington

Please join us in prayer for our nation — that righteous leaders would rise and prevail and we would be united as Americans. Pray also for the protection of our Military Patriots, Veterans, First Responders, and their families. Please lift up your Patriot team and our mission to support and defend our Republic's Founding Principle of Liberty, that the fires of freedom would be ignited in the hearts and minds of our countrymen.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2023 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.