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U.S. House Subcommittee Holds Hearing on RINs

 

On July 24, the House Energy and Commerce Subcommittee on Environment held a hearing to examine the use of Renewable Identification Number’s (RINs) as part of the RFS program. The witnesses included: Sandra Dunphy - Director, Energy Compliance Services, Weaver and Tidwell, L.L.P; Dr. Gabriel E. Lade - Assistant Professor of Economics, Iowa State University; Corey Lavinsky - Director of Global Biofuels, S&P Global Platts Analytics; Paul Niznik - Senior Consultant, Argus Media Incorporated; and Brent Yacobucci - Energy and Minerals Manager, Congressional Research Service.

In his opening statement, Subcommittee Chairman John Shimkus (R-IL) stated that the hearing was “intended to promote greater understanding of how RINs fit into the overall Renewable Fuel Standard. In order to chart a legislative path forward, it is critical that the subcommittee first gather the facts and comprehend the various complexities of the RFS program.” Full Committee Chairman Greg Walden (R-OR) added that it was his “desire to move legislation that will pave the future of transportation fuels in the United States, and in order for this to happen it is important that we understand what RINs are and how they fit into the Renewable Fuel Standard – a program that in 2017, spurred the production of 15.8 billion gallons of ethanol and 1.6 billion gallons of biodiesel in the United States.”

In his testimony, Mr. Yacobucci spoke about the confusion and uncertainty surrounding the RINs market, stating that “whether you’re talking about refiners or biofuel producers, all the participants in the market have raised issues, in one form or another, about uncertainty.” When asked by Chairman Walden how well she thought the EPA was overseeing the RIN market and implementation, Ms. Dunphy stated that “the EPA does a pretty good job administering the regulations as they were written, but the RIN market oversight is missing. There’s really not any oversight of the trading activity of RINs.” Lastly, when asked by Subcommittee Chairman Shimkus if anyone believes there is a RIN market transparency issue, Mr. Niznik responded, “We track RINs transactions from real market participants reporting from actual trades, so that’s how we gather data on pricing. And still even at that level we can’t have the understanding of the full volumes of the marketplace at any one given time that would be able to elucidate any issues on market manipulation.” There was a consensus by most witnesses in the hearing that there are many flaws in relation to the RINs market and that Congress must pass legislation to fix the problems. The most significant problems that exist in the current RINs market are volatility due to commodity prices, uncertainty, and fraud.

In other biofuels news, EPA Acting Administrator Andrew Wheeler said this week that he will continue to work for changes in biofuel mandates that were sought by former EPA Administrator Scott Pruitt, including policies such as counting ethanol exports toward annual biofuel quotas.

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