Moving the point of obligation under the Renewable Fuel Standard (RFS) downstream away from refiners would discourage fuel marketers from integrating renewable fuels into the fuel supply while simultaneously raising fuel prices at the pump, NATSO Vice President of Government Affairs said Sept. 21 at an energy conference.
Speaking to more than 250 attendees of the PMCI and RIN Alliance second annual Energy Conference in Des Moines, Iowa, Fialkov said current policy creates a strong incentive for fuel marketers to blend renewable fuels into the supply.
"The current policy where refiners and importers are obligated parties has led to a system where companies that introduce more renewable fuels into commerce are able to make money while at the same time sell fuel to consumers at a lower cost. That is a good thing. It doesn't make any sense to change it," Fialkov said.
In recent months, 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."
Specifically, Valero Energy, the country's largest refiner, earlier this summer petitioned the Environmental Protection Agency (EPA) to begin a rulemaking to change the point of obligation to fuel marketers. The American Fuel and Petrochemical Manufacturers (AFPM) subsequently asked EPA to change the obligation, arguing that the current system is worsening RFS implementation and compliance.
NATSO along with renewable fuels producers strongly oppose the change and think the RFS is working and helping to bring renewable fuel to market.
NATSO sharply criticized efforts to move the point of obligation urging regulators to remember that the entities seeking to shift the RIN compliance burden away from the refiners have spend considerable resources in recent years to repeal the RFS.
"Their claims that they have identified an effective way to improve efficiency and functionality of the program should be greeted with suspicion," Fialkov said.
In July, NATSO filed comments with EPA detailing how fuel marketers, including NATSO members, prefer the current point of obligation because it results in a more diverse source of supply from which they can acquire product and then sell it to their customers. The fact that some marketers have made money by buying and blending renewable fuel into the fuel supply demonstrates that the RFS is working.
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