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WASHINGTON, D.C. — The U.S. Environmental Protection Agency (EPA) proposed denying a group of merchant oil refiners' petitions to change the point of obligation under the Renewable Fuels Standard (RFS) on Nov. 10. It also announced a 60-day period during which interested parties can make comments on this proposal.
The RFS seeks to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in the overall amount of ethanol and other renewable fuels blended into gasoline over time. The renewable identification numbers (RINs) generated from fuel blending can be sold on the open market.
Under the current structure of the RFS, merchant oil refiners are obligated to blend more renewable fuel. The petition seeks to shift the obligation to entities that own gasoline before it is blended for retail sale.
Groups such as the Small Retailers Coalition are among those seeking to "even the playing field" by moving the point of obligation, as CSNews Online previously reported.
"Because parties that blend renewable fuels or sell fuel at the rack cannot dictate the retail price of the fuels they sell (unless they also own the retail stations), changing the point of obligation of the RFS program would only be expected to directly impact the wholesale pricing of fuels such as E15 and E85, and could only impact the retail pricing of these fuels indirectly," wrote the EPA in its proposed denial of the petitions. "While some of the parties that would become obligated if EPA were to change the point of obligation according to the petitions we have received (the blenders or position holders) own retail stations, many do not."
Ethanol industry groups such as Growth Energy applauded the EPA's proposed petition denial.
"The current structure appropriately incentivizes marketers to blend additional biofuels, and encourages the availability of higher-level ethanol blends to retailers who wish to sell them," stated Growth Energy CEO Emily Skor. "The bottom line is that the current point of obligation encourages consumer choice and cost savings at the pump, and any change would undermine the intent of the RFS and reward those parties who have refused to comply with the intent of the law."
The EPA's full proposed denial of petitions is available here.