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Busy week on the ethanol front.. Icahn in trouble..?!?
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white shadow
Posted 3/12/2017 10:27 (#5893895 - in reply to #5893780)
Subject: RE: point NOT taken..



East Central South Dakota

Should we have a mandate for farmers to be forced to use a certain amount of manure as fertilizer and if there's not enough Manure you can buy credits? 

I believe this is a terrible analogy that is the total opposite of the situation.  There is NOT a shortage of ethanol or RINS.  The refineries are CHOOSING to buy credits to control the supply of gasoline into the market rather than simply blending more ethanol into their gasoline supply.  Every gallon of ethanol refined generates a RIN.

The RIN hysteria generated by the media ( big oil) is a result of looking only at the message being conveyed by the petroleum industry, i.e. “the current volume requirement of approximately 13.8 billion gallons cannot be blended into 130 billion gallons.” As explained, this is based on obligated parties imposing a self prescribed limit of 10% blend volume. This is the supposed blend wall a    Simply blend more ethanol in higher blend rates to take down the wall.

We are generating extra RINS above the domestic gasoline usage, thus they are buying ( hoarding ) RINS when all they would have to do is simply blend the extra ethanol production in blends higher than the e-10 mandate.  If we blended higher blends there are no longer excess RINS and their value goes to zero.  The actions of big oil today is simply an attempt to keep blends higher than the mandate-- out of the nations gasoline supply.

Ethanol is available nationwide at a discount to gasoline at the wholesale level. In past years the oil industry has used this price differential for discretionary ethanol blending to take advantage of the high octane value of ethanol. Today, oil companies are not marketing ethanol on a discretionary basis in E15 or other ethanol blends despite the high potential profit. Electing the option of higher blends would immediately reduce RIN values while facilitating compliance by obligated parties



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