President Joe Biden has a choice to make during the 2024 election cycle.
So far, he has repeatedly caved to Big Ethanol’s demands under the federal Renewable Fuel Standard (RFS). It’s not looking good for good-paying union jobs.
Despite the harmful effects higher ethanol mandates bring, the Environmental Protection Agency (EPA) blew out the ethanol blending rates to 15 billion gallons or more for the next two years. In doing so, EPA is close to signing a death warrant for independent refiners.
Independent refiners are responsible for making the gasoline and diesel for our cars, trucks, and planes. Without them, transportation grinds to a halt. It’s clear independent refiners are the backbone of our energy economy. So why have they been paying Big Ethanol’s bills for so many years? They spend more on Renewable Identification Numbers (RINs) than payroll and maintenance. Simple math says this can’t continue without financial consequences.
Unfortunately, we are already seeing these consequences in action. Faced with sky-high RINs costs, independent refiner LyondellBasell was forced to close its Houston refinery that once produced over 260,000 barrels of oil daily. “We need a RINs reset,” said LyondellBasell CEO Bob Patel.
But Big Ethanol wants more. It is pushing President Biden to force year-round E15 gasoline blend sales. It wants Congress to waive Clean Air Act requirements, allowing E15 to be sold year-round.
It tried this before, illegally going behind Congress’s back to allow year-round E15, and even still, that wasn’t enough for Big Ethanol – it had to have its cake and eat it, too. It made it clear that year-round E15 sales should accompany a drastic rise in ethanol blending levels, which EPA ultimately granted.
As RINs prices climb higher and higher, more independent refiners will have to shut their doors for good. The good-paying union jobs at these facilities that tens of thousands of families rely on will disappear. If President Biden allows this, he’ll have broken his promise of standing with union workers. But he doesn’t have to do this. His administration can balance year-round E15 sales with a permanent solution to rising RFS costs.
Luckily for President Biden, a permanent solution already exists in Congress. The authors of a bill titled the “Safeguarding Domestic Energy Production and Independence Act of 2023” (HR 4576) want to keep RINs at a fixed price. With a fixed price RIN, independent refiners wouldn’t have to worry about RINs becoming wildly expensive overnight, whether from higher ethanol blending rates or manipulation from Wall Street traders.
By making sure this bill is attached to any law mandating year-round E15 sales, Congress and President Biden could help independent refiners and Big Ethanol find a middle ground without leaving union workers in the cold. Big Ethanol gets what it wants in year-round E15 sales, and independent refiners get what they need: an end to rising RINs costs threatening their businesses. A win-win solution that doesn’t result in President Biden breaking his promise to be “the most pro-union president in history.”
