Seeking Alpha

Refiners rally as EPA declares ethanol blend wall a reality

  • Refiners continue to rise a day after news of a leaked EPA proposal that would significantly scale back biofuel blending requirements next year.
  • The EPA's rationale for a cut in the volume of ethanol that must be blended echoes an argument the oil industry has made for months: The U.S. fuel chain cannot absorb more ethanol.
  • Let the lawsuits begin: "Any plan to roll back the targets... under the guise of addressing the blend wall would be patently unlawful," says the head of the Renewable Fuels Association.
  • TSO +4.4%, VLO +3.4%, PSX +3.1%, MPC +2.2%, WNR +4.5%, HFC +2.2%, ALJ +6.8%, CVI +2.6%, NTI +2%, DK +7.8%, CLMT +1.8%.
Comments (18)
  • Congrats to all you refiners! And for reality..
    11 Oct 2013, 11:53 AM Reply Like
  • I know many small engine mechanics who will lose a lot of business if they reduce the amount of ethanol in our gasoline as it is just terrible for marine & small engines. Ethanol was one of the worst ideas foisted on us. Not only did the price of cattle & poultry go up because the price of corn escalated, but many of us noticed a definitive decrease in our mpg. I had a 4 cylinder Highlander at the time ethanol first became mandated and my mpg dropped by about 3 mpg. How is that a good thing???
    11 Oct 2013, 12:26 PM Reply Like


    11 Oct 2013, 12:54 PM Reply Like
  • I'll wager the EPA is in the pocket of ADM.


    This same thing failed back in '78. Back then, it was called "gasahol", and was something the Carter Administration dreamed up.
    11 Oct 2013, 12:45 PM Reply Like
  • I'm willing to bet they'll reduce the amount of cellulosic ethanol that is required but the corn ethanol will remain at current level. I wouldnt get too excited for the refiners.
    11 Oct 2013, 01:21 PM Reply Like
  • Luckily, locally we have a marina where I live and boats use 89 octane 100% pure gasoline, so that's where I get all my power lawn equipment gasoline.
    11 Oct 2013, 02:44 PM Reply Like
  • Refiners are up because the Brent-WTI spread has increased to $9.00.


    Texas and North Dakota production is backing up again.
    11 Oct 2013, 08:19 PM Reply Like
  • Where do you find the spread listed? ...Thanks
    11 Oct 2013, 10:06 PM Reply Like
  • fendermon


    Brent stands for north sea oil while WTI stand for west texas intermediate grade.


    The refiners win because most refined products are quoted off the brent oil price while the WTI is a cheaper and better to refine.
    11 Oct 2013, 11:04 PM Reply Like
  • Plus we now export a growing amount of refined products. Wide spread means lower input costs for our refiners = bigger profits on exports.
    12 Oct 2013, 11:32 PM Reply Like
  • I have been against this whole ethanol thing from the start. Growing up in South Dakota I know a little bit about farming. I believe it's not good for the land. They already put to much chemicals into the soil. To grow this corn, it's all nitrogen. They harvest it before corn is produced. It's like silage just green matter. Then they cook it. Using a lot of farm equipment energy, refinery energy, and fertilizer energy. Remember Jimmy Carter was a farmer. The political lobby for farmers.


    And yes, you do not get the mileage from this stuff. And yes, less corn for the livestock. All is true.
    11 Oct 2013, 11:10 PM Reply Like
  • Send your opinion regarding the damage that ethanol is doing to your automobile, the environment, and the price of food to the EPA. I got this advise from my US Senator. Congress can't do anything, and the EPA needs to hear from us.
    12 Oct 2013, 04:46 PM Reply Like
  • Siegfredincolorado
    Timpzerbes, you must be an eastern Obama apologist that is masquerading as a past South Dakota farmer! I am against ethanol in gasoline because of the effect on corn prices ie food, fertilizer, equipment etc but standing green corn, before maturing, is cut and chopped for ENSILAGE then put in silos and fed exclusively to animals. Mature dry KERNAL corn is hauled to ethanol plants by thousands of truckloads [one - five miles from my home in Sterling Colorado] and my stepson drives one of the trucks that hauls some of thousands of truckloads of left over mash to feedlots for fattening cattle! NOT one bit of the corn disapears so the higher price of corn is just manipulated by greenies [Obamaites] We have an oil boom going on and we shouldn't be putting food [corn] in gasoline, how stupid! It's a myth that ELIMINATING ETHANOL would hurt farmers.!!
    13 Oct 2013, 08:45 AM Reply Like
  • From your comment it looks like you are drinking the stuff.
    13 Oct 2013, 08:19 PM Reply Like
  • Corn prices a very low now.
    13 Oct 2013, 08:27 PM Reply Like
  • I just want this stuff out of my car. Ask any mechanic. Ethanol deposits something called white rust that can't be removed from parts deep within your engine, and for those cars with plastic engine parts it can't be removed at all. For your car it's an early death sentence. It takes more energy to produce it than it gives back to the economy, not to mention the lost mpg. So we're paying for ethanol in the damage it does to our cars.
    13 Oct 2013, 09:39 AM Reply Like
  • Hmmm...I wonder about the gasoline back in the day that was supposedly 102 octane and was called "Ethyl"...hmmm. Wonder why they called it that, but of course, the real problem is that Detroit doesn't want to build an engine to run the higher content.
    14 Oct 2013, 08:24 AM Reply Like
  • "I wonder about the gasoline back in the day that was supposedly 102 octane and was called "Ethyl"...hmmm."


    Gasoline octane is not a function of how much lead is present in the gasoline. The "octane rating" refers to the fuel's resistance to pre-igniting under very high temperature conditions. In the early 1900's chemists learned that they could control detonation and pre-ignition easily and inexpensively by blending in varying amounts of "tetra-ethyl lead". This additive is why high octane fuels were referred to as "Ethyl". The lead in these gasoline's not only acted as an octane rating enhancer, but (in four cycle engines) it also acted as a lubricant for valve stems and a cushion for valves seats
    21 Oct 2013, 12:00 PM Reply Like
DJIA (DIA) S&P 500 (SPY)