Ethanol blend wall cost refiners at least $1.35B in 2013, Reuters review says

Last year's spike in the price of ethanol blending credits cost independent refiners at least $1.35B, more than 3x as much as the year before, according to a Reuters' review of securities filings.

The tally is seen as a conservative estimate, since it includes only nine refiners that disclosed the figures; others affected did not specify the cost of buying RINs used to meet quotas for blending biofuel into gasoline and diesel.

The review also highlights how the impact was unevenly distributed, with independent refiners CVR Refining (CVRR) and LyondellBasell (LYB) alone bearing more than 20% of the cost although they account for 2.5% of daily U.S. refining capacity.

Valero Energy (VLO), with ~10% of U.S. refining capacity, spent ~$517M on RINs in 2013, and estimates it will spend another $250M-$350M on RINs this year.

The data may give the companies more firepower as they urge regulators to stick to an earlier proposal to cut back ethanol requirements after an outcry from biofuels companies.

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Comments (9)
  • User 353732
    , contributor
    Comments (5166) | Send Message
    Actually it will cost consumers not refineries since government mandates costs on business are always an imposition on consumers. Businesses have no source of revenues aside from their customers so regulatory costs on business are just another tax on consumers.
    31 Mar 2014, 12:45 PM Reply Like
  • Jake2992
    , contributor
    Comments (1135) | Send Message
    Not regulating leads to costs being socialized, which is just another tax on consumers.


    An example would be the cost to clean up groundwater because a gas station didn't use a double walled gas tank. The gas station goes bankrupt and now the tax payer is on the hook for the clean up. Happens all the time.


    This isn't a black and white issue, its an issue that can't be understood if you can only think about things on a primitive conservative ideological level.
    31 Mar 2014, 01:20 PM Reply Like
  • epeon
    , contributor
    Comments (553) | Send Message
    sure, but what is the benefit to ethanol? As far as I can see the only benefit is to Iowas voters in the Iowa caucuses. It doesn't do much for everybody else but raise the price of gasoline.
    31 Mar 2014, 03:35 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
    It gives a lot of small engine mechanics a lot of extra work!


    Obama's broken window theory for the economy.
    31 Mar 2014, 04:38 PM Reply Like
  • Jack Hutchison
    , contributor
    Comments (523) | Send Message
    There are two distinct benefits of ethanol in gasoline: oxygenate to reduce emissions, and octane enhancement. Ten percent added exceeds the above reguirements, therefore any more is counterproductive other than to buy votes.


    1 Apr 2014, 08:21 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
    Modern Closed loop fuel injection eliminates any emissions reduction from the extra oxygen.


    That is the reason it used to be mandated in only winter months in most areas, as extra oxygen would lean mixtures in carburetors and Throttle body injection running in choke mode (rich) in cold weather. thereby reducing CO emissions.


    Even then it (ethanol) was only mandated as a substitute for MTBE after it was banned as an oxygenate additive for winter.


    None of that applies any longer.


    Any argument for using ethanol now, is around "Renewable" or Energy independence goals.
    1 Apr 2014, 08:34 AM Reply Like
  • jjoux
    , contributor
    Comment (1) | Send Message
    How many Flexfuel E-85 vehicles are on the road? How many haveconsumed more than three tanks of E-85 fuel before they realize it costs them more per mile than E-10 but the EPA and DOT still mandate the production of E-85 vehicles and California continues to grant funds for the construction of E-85 stations!!!


    Big brother still knows what is best!,,,
    31 Mar 2014, 06:08 PM Reply Like
  • fox dad
    , contributor
    Comments (16) | Send Message
    We could buy ethanol from Brazil cheaper, but the true purpose is to raise the price ocorn and land prices in Iowa . Everything this administration does is for votes.
    31 Mar 2014, 09:47 PM Reply Like
  • koolsool
    , contributor
    Comments (497) | Send Message
    Nobody talks about how much energy & carbon footprint it takes to produce ethanol. Once it is produced, then it is burned again in vehicles. No carbon footprint gain for using ethanol, just votes for bama.
    1 Apr 2014, 09:22 AM Reply Like
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