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High Gas Prices? Blame the ‘R’ Word — And It’s Not ‘Russia’

Talk about high gasoline prices often revolves around Russia, but energy experts say another factor is making an even bigger impact:


RINs, or Renewable Identification Numbers, 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 these 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 — so-called “winter blend”‘ — to keep supplies up and help bring prices down.

Loris thinks that 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 grades of gasoline to summer grades of gasoline,” he said. “There have been studies that 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 [RINs] 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.”

“There have been legislative ideas to cap the price or essentially cap it at 25 cents per RIN or 50 cents per RIN that would prevent against the cost fluctuation that we’re seeing as a result ….Ultimately, I think the better solution would be to waive the requirements altogether and do away with this mandate altogether and, again, allow the market to dictate how much ethanol and biofuels we put into our fuel supply.”

Those costs make it more difficult to open or operate refineries in the U.S., which makes it harder to increase domestic energy supplies. And, says Jim Snell, business manager for Philadelphia-based Steamfitters Local 420, if the last few months have taught us anything it is that energy is the economy.

“In the moment we’re in, elected leaders should be reaffirming their commitment to domestic energy production and refining capacity,” Snell told DVJournal.

“Critics cheered it as a victory, despite the very real consequences then and now, and they continue to oppose refineries because they don’t fit their new “green” image for our region,” said Snell. “Imagine what would happen today if we lost our remaining merchant refiners like Monroe Energy in Trainer and PBF Energy in Paulsboro — both of which remain vital but underappreciated.”

Not only would we lose thousands of jobs, but Snell said the global environmental problems would be worse.

“The demand for the output that these refineries produce won’t change,” said Snell. “What will change is where the product is refined — somewhere overseas, where there are lax environmental laws.”

Congressman Donald Norcross (D-N.J.) has urged the Biden administration to fix the broken RINs compliance scheme.  “The administration in Washington talks about giving the middle class a shot. What better example of the middle class getting the shaft than these RINs?”

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