COST OF RIN CREDITS IN 2013
'RINSANITY' SEES ETHANOL RINS HIT $1/GAL; MAY BE IMPACTING NYMEX RBOB
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RINs serve the same function as carbon credits — a way for companies to pay others to be environmentally friendly. You as a gas consumer pay for this. Did you know? Its an EPA SCAM that is legal!!!
RINs were created by the 2007 Energy Independence and Security Act, which mandated that companies that refine, import, or blend fossil fuels (the “obligated parties,” in the bill’s legalese) blend a certain, annually increasing amount of biomass-based diesel from 2008 to 2022. RINs are a way of tracking how much biodiesel these companies create. One gallon of corn-starch ethanol is worth one RIN; of agri-biodiesel, 1.5 RINs; and of cellulose ethanol, 2.5 RINs.
The numbers are transferable. Whenever a gallon of biodiesel changes hands, so does the RIN associated with it. The numbers can also be purchased. A company — a mining company, say — that blends fuels but doesn’t deal primarily in fossil fuels might blend its own biodiesel and then sell the associated RINs to an obligated party. In this case, RINs serve the same function as carbon credits — a way for companies to pay others to be environmentally friendly.
Fraud and Biodiesel Credits Obama and the EPA
Fraud in renewable fuel marker sales was predictable
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HR6 Energy Independence and security act of 2007 (This is why you are paying more for gas!!!!!!!!) Look it up.
H.R. 6 (110th): Energy Independence and Security Act of 2007
Title II Subtitle A
SEC. 202. RENEWABLE FUEL STANDARD.
(2) APPLICABLE VOLUMES OF RENEWABLE FUEL- Subparagraph (B) is amended to read as follows:
(I) RENEWABLE FUEL- For the purpose of subparagraph (A), the applicable volume of renewable fuel for the calendar years 2006 through 2022 shall be determined in accordance with the following table:
Applicable volume of renewable fuel
(in billions of gallons):
2006
--4.0
2007
--4.7
2008
--9.0
2009
--11.1
2010
--12.95
2011
--13.95
2012
--15.2
2013
--16.55
2014
--18.15
2015
--20.5
2016
--22.25
2017
--24.0
2018
--26.0
2019
--28.0
2020
--30.0
2021
--33.0
2022
--36.0
(More and more ethynol must be added to gas every year. This means the cost of gas is going to go up year after year because the government has mandated it.
If a refiner doesn't blend more ethynol as mandated they will be fined by the epa.
But the refiner can by RIN credits under this stupid bill to not blend more ethynol in gas.
The refiners know that anything over 10% kills and engine so they are buy RIN credits and passing the cost on to YOU the gas consumer!!!
The refiners are about to run out of RIN credits.
If they can't buy credits, which is stupid, they will be forced to blend MORE tah 10% of ethynol in gas!!!
This will start maybe in 2014.
So look for the price of gas to go up much more because of this stupid government law.) Story Reports
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Gasoline demand in the United States has declined since 2007, while the amount of ethanol they must add to it under the 2005 RFS continues to rise. Refiners are reluctant to blend more than 10 percent - the so-called "blend wall" - as that is the level automakers deem safe for engines and anything higher could leave refiners liable for vehicle damage.
But if they cannot meet the mandate or they let others do their blending, they must buy the credits known as RINs in the market to cover that obligation or face large fines.
The ethanol industry, meanwhile, argues that the refining industry is driving up gasoline prices and RIN values by refusing to blend up to 15 percent of ethanol per gallon of gasoline, as allowed by the U.S. Environmental Protection Agency.
The Renewable Fuels Association says that would ease the demand for RINs and reduce gasoline prices.
Refiners can carry over RINs from previous years if needed, which has been the practice since the mandate was imposed in 2007.
But now that they are reaching the blend wall, concern is high that all the available RINs will be bought up in 2013 - in a high-priced, volatile market - leaving refiners hanging next year.
"You're not really at the blend wall until 2014," Bill Klesse, chief executive of Valero Energy Corp, the largest U.S. independent refiner, told reporters at the conference.
"So what it is, is anticipation. You can tell people are buying RINs, hoarding RINs, keeping RINs, not selling RINs - they think prices are going higher, and when you get into a squeeze, how high is the price?" he told reporters.
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UNINTENDED CONSEQUENCES
Paul Eisman, chief executive of Alon Energy USA, one of the nation's smaller independent refiners, told Reuters in an interview that the increasing mandate not only encourages refiners to export more gasoline, it discourages imports. Exported gasoline faces no mandate -- while imports do, adding to importers' costs.
"The effect that potentially has on the supply of gasoline in the U.S. and the price of gasoline will be something that has an impact,' Eisman said. "A high RINs cost inventivizes the export of gasoline and disincentivizes the import of gasoline."
Klesse told reporters that the U.S. government must address the issue because consumers will feel the effects with higher pump prices.
"This isn't the intent of the (Renewable Fuels Standard) program and the consumer at the end of the day is going to pay," he said.
The price added at the pump would be 10 percent of the price of the credit because each RIN represents a gallon of ethanol.
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(And your thought ethynol was a good idea, right. Ethynol added to gas is an EPA scam. The law allows RIN credits to be traded and guess what you and I pay for them!!!) Story Reports
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A day in the life of a RIN Credit
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The Ethanol Gas-Pump Surcharge A 2007 mandate is needlessly raising U.S. gasoline prices.
Refiners are now crashing into what is called a "blend wall," meaning the feds have forced them to purchase more ethanol than they can safely put in their gasoline. Refiners are reluctant to blend more than 10% ethanol into gasoline because consumers don't want it, and because a higher blend can damage the engines of older cars, boats and electrical equipment.
Refiners must therefore purchase RIN credits from companies that have used more ethanol than required. But the credits are running out, and so the price of RINs has soared to nearly $1 a gallon, up from about seven cents at the start of the year. According to Darrel Good, a University of Illinois agriculture economist, the RIN price "could continue to rise as we approach the higher ethanol mandate for 2014" as credits run out. These costs are mostly passed on to motorists.
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