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Ethanol RINs Aren’t Raising Gasoline Prices, RFA’s Dinneen Says

Record prices for Renewable Identification Numbers aren’t causing more expensive gasoline prices at the pump, Bob Dinneen, president of the Renewable Fuels Association, said.

The value of RINs, which are used to help the Environmental Protection Agency track compliance with federal biofuel policy, touched a record $1.06 for the corn-based ethanol variety on March 8, compared with 7.1 cents on Jan. 7, data compiled by Bloomberg show.

Ethanol advocates and oil interests differ over the impact of the higher RINs values and their effect on gasoline prices. The American Petroleum Institute said March 8 that its members can’t blend more ethanol into gasoline and that fuel shortages may occur if the U.S. doesn’t repeal the Renewable Fuels Standard.

“There is no way that the opaque marketplace for RINs is driving up the cost of gasoline today,” Dinneen said on a conference call with reporters from Washington, where the ethanol advocacy group is based.

Conventional RINs for corn-based ethanol rose 12 percent to 86.5 cents yesterday, data compiled by Bloomberg show, while advanced RINs, which include biodiesel and Brazilian sugarcane- derived ethanol, dropped 5.4 percent to 87.5 cents. Both certificates reached records on March 8.

Dinneen said refiners are using RINs to create “hysteria” and “undermine” the 2007 energy law that requires the U.S. to consume 13.8 billion gallons of ethanol this year and 14.4 billion in 2014.

Tracking Fuel

RINs are attached to each gallon of ethanol produced. Once ethanol is blended with gasoline, refiners can keep the certificate to show compliance with the mandate or trade it. There are about 2.5 billion RINs available, Dinneen said.

Ethanol is mixed into gasoline and sold at filling stations in a formula of 10 percent additive and the rest motor fuel. Ethanol production last week averaged 797,000 barrels a day, or 12.2 billion gallons on an annual basis, the lowest level for the period in records going back to June 2010, data compiled by Bloomberg show.

Tom Buis, chief executive officer of Growth Energy, a Washington-based renewable fuels trade group, said refiners can sell higher concentrations of the fuel to ease RIN prices and meet the government requirements.

The EPA in 2011 granted an industry request to allow 15 percent ethanol in gasoline, a mix known as E-15, for vehicles made after 2001.

AAA, the nation’s biggest motoring organization, has said that more testing of the fuel is needed and the American Petroleum Institute and other groups last month said they petitioned the U.S. Supreme Court to overturn the EPA’s decision.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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