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We've lost 3 Billion gallons of domestic demand to Illegal Waivers.
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JonSCKs
Posted 3/14/2019 06:48 (#7379382)
Subject: We've lost 3 Billion gallons of domestic demand to Illegal Waivers.


Restating from below because THIS is where the RUBBER meets the ROAD!!

Through the Illegal RIN Waivers we have Lost 3 Billion gallons of domestic ethanol demand.. consequently 600 million gallons of ethanol capacity has gone off line.

The Trump administration is about to roll out E-15.. but unless the tide is turned from the fatal cut to the RFS.. the oligopolistic Oil Industry can CRUSH Ethanol... or more likely.. bleed it out.. take it over.. and then dictate it's future.

For a Brief Shinning moment.. US Ag rose up.. and met the scarcity shortage caused by the Crude Oil Spikes.

History..  2005  Hurricanes Rita and Katrina destroy MAJOR Infrastructure in the US Gulf shutting off the Gulf of Mexico Crude Oil supply.. (Rita took out the Infrastructure.. Katrina took out New Orleans..)  Consequently Crude Oil spiked (along with a War in the Middle East..) to $145 a barrel..

https://www.brookings.edu/wp-content/uploads/2009/03/2009a_bpea_hamilton.pdf

The price of oil has been anything but stable over the last four decades (figure 1). A series of dramatic events in the 1970s sent the price of crude oil over $40 a barrel by the end of that decade, which would be over $100 a barrel at current prices. The price remained very volatile after the collapse in the 1980s but was still as low as $20 a barrel at the end of 2001. The next six years saw a steady increase that tripled the real price by the middle of 2007. Later that year the path of oil prices steepened sharply, sending the nominal price to an all-time high of $145 a barrel on July 3, 2008, only to be followed by an even more spectacular price collapse.1 What caused this remarkable behavior of oil prices, and what were the effects on the economy?

Ethanol was first on the scene.. ramping up production quickly and moving into fill the void..  Domestic Crude Oil production followed more slowly.. as events caused US Production to dip to 4.5 million barrels per day..

https://www.cfr.org/timeline/oil-dependence-and-us-foreign-policy

In 2005, the U.S. Congress passes the Energy Policy Act, which includes new incentives for transportation fuel alternatives and flex-fuel cars as well as new subsidies for domestic oil exploration. The law mandates that 7.5 billion gallons of renewable fuels be blended into gasoline by 2012. In his 2006 State of the Union address, U.S. President George W. Bush says "America is addicted to oil.

...

In 2006, a time of near 
record-high U.S. oil consumption and imports, oil prices begin to rise steadily, topping a record $147 a barrel in the summer of 2008. This translates to gasoline averages above $4 per gallon in much of country. Experts debate the cause of the record prices, blaming it on factors such as the economic rise of India and China, commodity market speculation, and basic issues of supply

...

In May 2009, the Obama administration announces accelerated CAFE standards of 39 mpg for cars and 30 mpg for light trucks, which the administration highlighted as part of its climate change policy goals
.
...

But in April of 2010, a deepwater drilling rig explodes and sinks in the Gulf of Mexico, causing a massive, four-month oil spill. The Obama administration, in response, places a temporary ban on all new offshore drilling projects in order to review U.S. safety and environmental enforcement. Calls renew for strengthened measures to reduce U.S. oil consumption, now at less than nineteen million barrels per day, down nearly two million barrels from 2005 record levels.
...

 In a March 30 speech, U.S. President Barack Obama says: "We will keep on being a victim to shifts in the oil market until we get serious about a long-term policy for secure, affordable energy." He pledges to reduce U.S. oil dependence by one-third within a decade
...

November 2014, 
U.S. tight oil producers contribute to a global supply glut that puts downward pressure on prices. By November, crude oil falls below $75 a barrel, down from $110 in June. OPEC members meet in Vienna, where, despite opposition from some members who want to cut OPEC oil production to halt the price slide, Saudi Arabia pushes the group to maintain a production target of thirty million barrels per day. The organization meets and regularly exceeds that target, leading to further price declines below $50 a barrel by early 2015, which squeezes the finances of oil-exporting countries and forces unconventional drillers in the United States to curb costs and sharply cut production.
...

December 2015, 
Even as the United States continues to import oil, opportunities for exports will arise since many of the country's existing refineries are not optimized to process the type of light crude drawn from shale. However, most analysts believe that the impact on production, prices, and geopolitics of lifting the restrictions will be modest.
...

We're about to come back FULL CIRCLE to OVER RELIANCE on CRUDE OIL.. as prices are high enough to sustain US Shale Drillers.. but once CAFE Standards are reduced.. demand returns.. and ethanol is cut.. OPEC can Lower the price and US Shale drillers will once again go bankrupt.. and we will be back at square 1.. 

Anyone wanna go send their kids or Grandkids to foreign lands to fight for Crude Oil... again?  aka George W Bush.

..

Okay so now I've set the stage.. with the FACTS above.

US Gasoline demand is roughly 9.2 million barrels per day.. of which US Ethanol is currently supplying about 1.050 million barrels

Total Petroleum usage is around 18 to 19 million barrels.. the US is cranking out 12 million.. up from 4.5 before the Shale Drillers kicked in..  The Shale boys are hollowing out the BEST acreage now.. and it's a DRILL BABY DRILL program which takes expensive Crude Prices (currently) to sustain.. WHEN that fails..  US Production will fall.  (which is a whole nother thread.. )

The Trump administration SAYS it supports Ethanol.. and the Upper Midwest Vote.. but the Oil Interests IN the Administration has slashed CAFE standards.. and through Scheme and Device Undercut the Renewable Fuels Standard the RFS through ILLEGAL RIN Waivers to their Crony's in the Oil patch.

We have NOW ARRIVED at a CRITICAL POINT.. the Trump administration is offering e-15 in exchange for RIN Reforms.. depending upon HOW those reforms go.. determines whether ethanol lives.. or Dies.

5.5 Billion BUSHELS of CORN DEMAND are on the table...

If you thought the TRADE WAR was bad.. "you ain't seen nothing yet."

Do we want high prices?  No..  Ethanol production will ebb and flow.. it's been a defacto demand sink for Chronic US Overproduction... saving the Taxpayer $$$ in former Farm Supports.. and the US Consumers $$$ at the fuel pump.

... AND it LIMITS TOXIC Carcinogens like Octane enhancing aromatics such as BENZENE which the API has KNOWN CAUSES CANCER SINCE 1948!!

as much as a third of a gallon of gasoline is comprised of aromatics.. Is there a link to CANCER?!?

YES!!  

Google "Tricks of the Trade" and start reading about page 70 onward.. the API has KNOWN about CANCER in GASOLINE since 1948!!

"In 1948 the American Petroleum Institute's "API Toxicological Review of Benzene" discussed "reasonably well documented instances of the development of leukemia as a result of chronic benzene exposure."  The Report concluded that, "it is generally considered that the only absolutely safe concentration for benzene is ZERO."

page 70.

the book then discusses HOW the Oil Industry covered this up..  WOW SHAME on the API!!

Without Lead, or MTBE.. AROMATICS such as BENZENE is what they got left.. and they are pumping it into our climate by the barrel full.. as much as a THIRD of a gallon of gasoline is AROMATICS.. 

9.2 myn bbls per day - 1.05 of ethanol = 8.15 myn bbls x .28 (rough estimate) = 2.28 million Barrels PER DAY of CANCER CAUSING AROMATICS being released at US Filling stations and on the Roads DAILY!!

OUTRAGEOUS!!

but whatever moves the economy forward eh?

...

"uh-hum."

but back to the Illegal RINS.. 

The RFA and others have sued the epa for the "Waived" RINS not being made up which so far adds up to about 3 billion gallons of lost demand.. 

repeating from below..

specifically...

http://ethanolproducer.com/articles/15931/rfa-asks-epa-to-use-rfs-undefinedresetundefined-rule-to-reallocate-waived-rvos

The Renewable Fuels Association is calling on the U.S. EPA to use its upcoming Renewable Fuel Standard “reset” rule to reallocate renewable volume obligations   (RVOs  ) impacted by recent small refinery exemptions, a 2016 lawsuit, and a recent bankruptcy settlement.

 

A notice released by the Trump Administration in October 2018 indicates the EPA is scheduled to release an RFS reset rule in early 2019 and finalize that rulemaking by the end of the year. The notice states that “under the statutory provisions of governing the [RFS] program, EPA is required to modify, or reset, the applicable volume targets specified in the statute for future years if waivers of those volumes in past years met certain specified thresholds. Those thresholds have been met or are expected to be met in the near future. As a result, EPA is proposing a rulemaking that will propose modifying the applicable volume targets for cellulosic biofuel, advanaced biofuel and total renewable fuel for the years 2020 - 2022.

On Jan. 29, Geoff Cooper, president and CEO of the RFA, sent a letter to Acting EPA Administrator Andrew Wheeler in which he said the RFA expects the EPA will use the rest rule as an opportunity to adjust future implied blending obligations for conventional fuels upward to account for the 500 million gallons of renewable fuel improperly waived from the 2016 standards, as required by the D.C. Circuit Court of Appeals’ remand in Americans for Clean Energy v. EPA; the approximately 232 million renewable identification number (RIN) “write-off” as part of the Philadelphia Energy Solutions Refining and Marking LLC bankruptcy settlement; and the 2.25 billion RINs attributable to 48 small refinery exemptions granted for compliance years 2016 and 2017.

“As a result of these waivers or exemptions from required volumes, many ethanol plants have recently idled, shut down, or announced layoffs,” Cooper wrote. “These compliance exemptions have also hurt demand and price for American farmers. At a time when trade disputes are dampening export market opportunities, the EPA-induced disruption in domestic ethanol and corn demand is devastating.”

In his letter, Cooper notes that due to the exemptions he listed, the RFS—as implemented—has not achieved the applicable volume requirements set by the EPA in its annual rules. He also stressed that EPA has statutory mandate to ensure those volume requirements are met, noting that mandate can only be accomplished if EPA adjusts volumes upward to account for volume obligations previously exempted by EPA and not accounted for in the subsequent year’s volume requirement.

You are gonna have to FIGHT for it.. if ya want to keep it.



Edited by JonSCKs 3/14/2019 06:56
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