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More Refiner Bailouts: A Broken Promise that Will Haunt Rural America
News Releases
E15 Sales Up Following Removal of Summertime Barrier, But RFS Refiner Exemptions Suppress Expansion
August 8, 2019 by Ken Colombini in News Releases
Click on image for full size.

August 8, 2019 – Data released Wednesday by the Minnesota Department of Commerce prove that the marketplace is already responding to President Trump’s elimination of a decades-old regulatory barrier severely limiting the sale of E15 in the summertime. In June 2019—the first month following elimination of the summertime E15 restriction—sales of the blend virtually doubled when compared to June 2018. At the same time, the Minnesota data show that the wave of Renewable Fuel Standard compliance exemptions granted to oil refiners is suppressing more rapid expansion of E15 and other higher-level ethanol blends.

For the first time ever, E15 sales volumes did not plummet in June, as the Environmental Protection Agency issued a rule on May 31 finally allowing retailers to continue offering E15 throughout the summer months. Sales of E15 jumped from 3.66 million gallons in June 2018 to 6.30 million gallons in June 2019, according to the data. The number of Minnesota stations selling E15 also increased by 18 percent during that period.

“The data from Minnesota confirm that the market is already reacting positively to the elimination of the unnecessary and ridiculous summertime restriction on E15,” said Geoff Cooper, President and CEO of the Renewable Fuels Association. “In the past, when the calendar flipped to June, E15 sales volumes would begin a summer-long nosedive because of EPA’s antiquated gasoline volatility regulations. But because President Trump kept his promise to remove the summertime barrier to E15, those days are over and retailers now have the ability to sell E15 all year long. Customers looking for a cleaner, lower-cost, higher-octane fuel option can finally fill up with E15 during the busy summer driving season.”

While the June boost in E15 sales is good news, Cooper said the data also underscore the demand destruction resulting from EPA’s unrestrained abuse of small refiner exemptions. In recent months, E15 sales volumes per station have been slightly below year-ago levels due to weakened RFS requirements and lower prices for the RFS compliance credits known as RINs. From December 2018 through May 2019, E15 sales per station per day were 13% lower, on average, than the average during the same period the year before. Not coincidentally, RIN prices were three times lower in the period of lower E15 sales.

“These data provide further evidence that EPA’s rampant issuance of RFS small refiner exemptions is suppressing growth in E15 and other higher-level blends,” Cooper said. “The bailouts given to refiners in recent years led to a collapse in the price of RFS compliance credits, which provide the marketplace with a powerful incentive to expand E15 availability. That incentive is greatly diminished when credit values are very low—as is currently the case. This is more proof that EPA’s reckless use of small refinery waivers is resulting in lost demand for ethanol producers. With another 40 small refiner exemption requests pending, we urge the Trump Administration to exercise far more constraint and judiciousness in deciding these petitions. And we implore EPA to ensure that any exempted volumes are redistributed to non-exempt parties.”

Minnesota is the only state that consistently reports sales volumes of E15 and flex fuels like E85. The data are available here.

Ken Colombini

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We are the leading trade association for America’s ethanol industry, working to drive expanded demand for American-made renewable fuels and bio-products worldwide.

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