Daily Caller: Soaring renewable fuel costs spark new fight over ethanol mandate

July 17, 2013

Michael Bastasch, July 17- Renewable fuel credit prices rose to record highs Monday, reigniting the debate over repealing the federal government’s ethanol mandate.

For months now, refiners and the petroleum industry have been pushing for the full repeal of the Renewable Fuel Standard (RFS), which requires that 13.8 billion gallons of ethanol be blended into gasoline this year and 14.4 billion in 2014.

However, refiners are hesitant to blend more than 10 percent ethanol into the fuel supply over safety concerns. Skyrocketing renewable fuel credit prices indicate that the industry is nearing the limits of what it can blend, or the “blend wall.”

“The energy landscape in the United States is markedly different today than it was when the RFS was enacted in 2007,” said Charles Drevna, president of the American Fuel and Petrochemicals Manufacturers. “Today it is clear that the RFS is not only failing to achieve its environmental goals, but is actively undermining them.”

As renewable fuel credit prices increase, refiners are burdened with higher costs. Valero Energy Corporation CEO and Chairman William Klesse said in a Senate hearing that his company expects cost increases between $500 million and $750 million in 2013. Valero is also the third-largest corn ethanol producer in the U.S.