Robert Campbell, August 6 – Eight months after the legal deadline the Obama Administration has released the 2013 Renewable Fuels Standard rule. More importantly it promised waivers next year that will supposedly keep this badly designed law from inflating gasoline prices.
Is this a cause for celebration? Hardly anyone will be truly happy with this decision. The agricultural lobby will be dismayed by the tacit abandonment of the effort to dump ever more corn into the nation's fuel mix.
Those merchant oil refiners who do not blend their own fuel such as Valero or CVR Refining are still on the hook to buy up as many ethanol blending credits, known as RINs, as they were before.
The firms that profit from this set up – the traders and hedge funds that have been speculating on RINs as well as companies like oil major BP that blend more gasoline than they import and manufacture – will still be winners from this flawed system but even they must be wondering if it would be preferable to have a clear legal regime rather than an endless series of ad hoc fixes.