DV Journal

America must lead the world in addressing climate change caused by greenhouse gas emissions. However, we must do so without damaging U.S. energy security and economic prosperity. As such, we must do everything possible to lower emissions without radical measures like banning fossil fuels.

Luckily, America has one option at its disposal: E15 gasoline. E15 gasoline refers to petroleum gasoline blended with 15% ethanol, an organic compound made from corn. Most Americans already fill up their cars with E10 gasoline, or fuel with 10% ethanol. E15 simply contains 5% more ethanol than E10. E15 is a renewable biofuel, meaning that it reduces consumption of a scarce resource – oil and gas – by mixing in a renewable resource, ethanol. E15 is safe, clean, and cheap.

Despite this, some special interests oppose E15 gasoline. They claim that the year-round sale of E15 gasoline hurts independent refineries and union workers in the state. However, these arguments do not stand up to scrutiny and could prevent drivers from having the option to use a better and cheaper fuel.

There is a common myth that E15 fuel hurts independent refineries by increasing the price of Renewable Identification Numbers (RINs), the credits distributed by the EPA for producing renewable fuel. Yet, independent refineries in Delaware like PBF and Monroe Energy enjoyed record-breaking profits in recent years when RIN prices were sky-high. RIN prices had no effect on independent refineries’ profits or union workers’ jobs. Many refineries will continue to make record profits regardless of E15 policies. Although refineries paid more to meet EPA biofuel requirements, the market nonetheless allowed them to secure massive profits. People want E15, and refineries big and small benefit from this high demand.

E15 demand is so high because it is environmentally friendly and cheap.

The U.S. Environmental Protection Agency (EPA) designates E15 as a renewable fuel for a reason. E15 allows us to replace fossil fuels with ethanol, which is made from corn crops that absorb carbon dioxide as they grow. The evidence shows that E15 reduces emissions. Studies done at the University of California, for example, prove that E15 significantly reduces the pollution emitted from vehicles. One study found a 40 percent reduction in greenhouse gas emissions, all from blending a corn-based compound into our gasoline. Given the current climate crisis, consumers everywhere are looking for ways to reduce their carbon footprint.

E15 fuel is also cheaper than other petroleum-heavy alternatives. Studies show that drivers save an average of 25 cents per gallon with E15 fuel, sometimes saving upwards of $1 per gallon. With inflation for necessities like housing and clothing rising across our state, Delawareans could benefit immensely from cheaper gas prices.

Strangely, E15 gasoline cannot be sold year-round because of an outdated law. Currently, the EPA must issue permits to allow for the sale of E15 during the summer months, and the agency issues them at unpredictable times or not at all.

The evidence in favor of E15 is overwhelming. Congress should pass legislation to allow E15 to be sold nationwide year-round because it is cheaper and better for the environment. Our very own Senator Tom Carper (D-DE) can help pass legislation allowing E15 to be sold year-round as chair of the Committee on Environment and Public Works. It’s the obvious decision for cost-conscious drivers, the environment, and refineries that will continue to make significant profits.

A little-known federal mandate designed to encourage renewable fuel use has morphed into a form of ‘energy bitcoin’ driving up gas prices, critics say. And the costs are endangering energy jobs right here in the Delaware Valley.

 Fueling American Jobs Coalition, a collaboration of union workers, local gas station owners, small retailers, and independent American oil refiners, is pushing for reforms that could protect workers and ease pain at the pump.

“Union jobs are at stake,” said Jim Snell, business manager for Steamfitters Local 420, one of the unions participating in the coalition. “It ties in directly to this whole RINs issue.”

Renewable Identification Numbers (RINs) are part of the federal government’s Renewable Fuel Standard (RFS) system used to address carbon emissions.

“When refiners are not able to essentially generate enough fuel from the RFS they must buy or sell those credits,” Nick Loris, Vice President of Public Policy at Conservative Coalition for Climate Solution told Delaware Valley Journal. “If the refiners can’t comply by generating their own fuel, then the demand for these credits increases, and that increases the price of these credits anywhere from 30 cents to a few bucks.”

High gas prices are hurting the Biden administration politically. An ABC/Ipsos poll found 70 percent of Americans disapprove of how Biden is handling the issue, and the White House is reportedly looking at temporary changes to renewable fuel regulations to address the problem. According to White House press secretary Jen Psaki, the administration may allow the sale of gasoline with higher blends of ethanol this summer — the so-called “winter blend” — to keep supplies up and help bring prices down.

Loris thinks temporarily waiving blending requirements for refiners could provide some relief.

“Spring is the time of the year where some of these refiners will shut down and switch from winter to summer grades of gasoline,” he said. “Studies have estimated that can add five to 15 cents per gallon, and while it’s a sensible regulation, it helps reduce smog, that temporarily reprieve of this regulation can help avoid an even higher cost increase at the price of the pump.”

Then there is the cost of the RINs themselves. Instead of a regulatory tool to help cap emissions or promote renewable fuel production, they have become a form of “energy bitcoin” with an intrinsic value of their own. According to the Fueling American Jobs Coalition, a group promoting reform of the RFS system, the price of RINs rose 1,250 percent between January 2020 and January 2022.

“It’s clear it has become its own phony market, much like carbon credit trading that is wrecking the European Union and its members,” Dan Kish, distinguished senior fellow at the Institute for Energy Research. told DVJournal. “The middle-men make all the money and the farmers who produce ethanol and consumers end up paying the price.”

“We’re spending more on RINs than to run six refineries—more than on all other operating costs combined,” said Brendan Williams with BPF Energy in a recent interview on WPHT radio.  “RINs are raising fuel costs, putting jobs and fuel supplies at risk.”

Some of those jobs are at the Monroe Energy refinery in Trainer, Pennsylvania.

“A stone’s throw away, also on the Delaware River but inside Delaware, is a refinery called PBF,” says Snell. “Those two facilities are union facilities, and if either one of those refineries is suffering, struggling, which they have been, it’s going to threaten the closure of those refineries, and that puts my members out of work and members of the Philadelphia building trades along with Steamfitters 420.”

Meanwhile, it is not just building trades at risk. Snell notes workers at the refineries are represented by the steelworkers union.

“But I’m here to tell you that down the street, so to speak, if that refinery was to close due to the RINs issue, (it would be bad),” says Snell. “They’re not crying wolf. They’re doing everything they can to keep that place open. But somebody might just come in and say ‘that’s it, lock the gates, it’s over,’ and that’s what we’re scared to death might happen.”

Supporters of renewable fuels and the RFS do not think reforms are necessary. 

“Some oil refiners want to have it both ways,” says Renewable Fuels Association President and CEO Geoff Cooper. “First, they argue RINs are a cost they have to ‘eat’ and they can’t pass on. Then they say they fully pass on their RIN cost all the way to consumers in the form of higher gas prices.”

Cooper disputes those claims.

“The truth is, refiners don’t really have to buy RINs at all—if they just purchased and blended the biofuel volumes as required by law, then they would not need to purchase RINs from refiners who blend more biofuels than required,” says Cooper. 

In any event, Cooper says it is broadly understood that refiners who choose to buy RINs instead of blending biofuels pass RIN costs on to wholesale customers, but not to retail pump prices. 

“Even the biggest U.S. refiner (Marathon Petroleum), the American Petroleum Institute, and EPA itself agree that all refiners, both small and large, recoup the cost of RIN credits through higher wholesale prices for gasoline and diesel,” says Cooper. “Meanwhile, RIN prices do not have an effect on retail fuel prices, according to EPA and independent university researchers. The primary driver of retail gasoline prices has always been crude oil prices—that has not changed in the RFS era.”

Snell is not pleased. He hopes legislators will do something fast. If they do not, it may be at their own peril.

“If I’m one of these people up for reelection in the fall, the one thing I want to see is the price of gas going down,” says Snell.

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