NATSO, Fuel Groups Unite To Oppose Moving Point of Obligation Under the Renewable Fuel Standard

NATSO joined seven fuel associations representing the majority of participants across the transportation fuels sector in expressing unified support for the Environmental Protection Agency’s (EPA) recent proposal to keep the current point of obligation under the Renewable Fuel Standard (RFS). 
 
Their Nov. 30 letter to EPA Administrator Gina McCarthy marks the first time that these organizations have collectively backed a single issue. 
 
NATSO, the American Petroleum Institute, the Advanced Biofuels Association, Growth Energy, the National Association of Convenience Stores, the Petroleum Marketers Association of America, the Renewable Fuels Association and SIGMA said that each strongly supports EPA’s recent proposed denial of petitions for a rulemaking to change the point of obligation under the RFS. 
 
“There is no sound public policy rationale for moving the point of obligation and further, such a change would add complexity and uncertainty to the current RFS program,” the trade groups said in the letter.
 
Under the RFS, refiners and importers are obligated parties to ensure that renewable fuels are integrated into the nation’s fuel supply. Recently, however, there has been a coordinated effort on the part of obligated parties to encourage policymakers to shift the point of obligation under the RFS from refiners and importers to "rack sellers." 
 
In November, EPA sided with NATSO and said that it will not alter the “point of obligation” under the RFS. The announcement was accompanied by a comprehensive analysis detailing the effectiveness of the current point of obligation. 
 
In their most recent letter, the groups urged EPA to finalize its November proposal not to alter the point of obligation under the RFS and deny petitions to move the point of obligations.
 
This unprecedented alliance of the fuel retailing community underscores the critical importance of the current compliance structure on the fuels market as well as the U.S. economy and consumers.
 
The current policy creates a strong incentive for fuel marketers to blend renewable fuels into the fuel supply while lowering the price at the pump for consumers. Changing the point of obligation would discourage fuel marketers from integrating renewable fuels into the fuel supply while simultaneously raising prices at the pump.
 
EPA said Nov. 10 that it will not alter the point of obligation under the RFS after an intense lobbying effort by obligated parties pushed for policymakers to shift the point of obligation from refiners and importers to rack sellers. 
 
EPA’s announcement was accompanied by a comprehensive analysis detailing the effectiveness of the current point of obligation as well as a thorough rebuttal of arguments in support of changing the point of obligation.
 
In evaluating the efficacy of the RFS compliance structure, EPA determined that the current point of obligation is successfully achieving the agency’s objectives of displacing petroleum-based fuel with renewable substitutes in a manner that stabilizes price, deepens supply options, all while incentivizing fuel marketers to blend and sell renewable fuels. 
 
The American Fuel and Petrochemical Manufacturers had petitioned EPA to shift the point of obligation from refiners to fuel marketers, and Valero Energy filed its own petition in June.
 
In comments filed with EPA in July, NATSO said EPA should explicitly reject the idea of revising the definition of obligated party under the RFS. 
 
In a recent statement, NATSO said that the entities seeking to shift the RIN compliance burden away from the refiners have spent considerable resources in recent years to repeal the RFS and therefore their claims that they have identified an effective way to improve the efficiency and functionality of the program should be “greeted with suspicion.”
Tiffany Wlazlowski Neuman's photo

Tiffany Wlazlowski Neuman

Tiffany Wlazlowski Neuman develops and executes communications strategies to advance NATSO’s public relations and advocacy goals. Tiffany also develops and oversees partnerships related to the NATSO Foundation’s public outreach initiatives. Tiffany lives in the D.C. metro area with her husband and their two sons.More
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