Retailers Highlight Risks of Shifting RFS Point of Obligation

WASHINGTON, D.C. — Various groups are speaking out against a potential shift in the point of obligation requirement under the Renewable Fuels Standard (RFS) by focusing on the risks involved.

In an op-ed for The Hill, RaceTrac Petroleum Chief Supply Officer Max McBrayer objected to both a shift and specific arguments put forth by Andrew Langer of the Institute for Liberty.

"Rather than 'draining the swamp' as Langer suggests, his new regulatory framework would engorge it. Indeed, a myriad of new regulations would be required to enforce a program that would have significantly more regulated parties," McBrayer wrote. "Many of these would be small businesses, which would be unable to handle this new regulatory burden. Changing the point of obligation would actually cause the very job losses that Langer fears."

He also pointed out what he said were factual inaccuracies being asserted about Renewable Identification Numbers (RINS), such as that they are traded at 20 times the value of a gallon of ethanol. Ethanol RINS peaked at approximately $2.50 per gallon and are currently trading below the value of ethanol, he said.

McBrayer also stated that the only fraud discovered in connection with the point of obligation occurred at the biofuel producer point, not the retail level, and that changing the point of obligation favor merchant refiners at the expense of independent businesses and consumers.

The full op-ed is available here.

Additionally, NATSO released a video that demonstrates how shifting the point of obligation away from refiners would raise fuel prices, hurting small retailers and the U.S. economy. Joining NATSO, which represents the nation's truckstops and travel plazas, on the video were NACS, the Association for Convenience & Fuel Retailing, and SIGMA: America's Leading Fuel Marketers.

NATSO developed the video "to dispel the widespread confusion created within the marketplace by a handful of merchant refiners and investors who have petitioned the Environmental Protection Agency to shift the compliance requirements," the organization said. "Doing so would undercut the program's efforts to sustain the use of renewable fuels in gasoline and diesel fuel."

The organization also stated that the RFS is working as intended by creating stable gas prices and encouraging renewable fuels in the fuel supply.

"It is imperative that policymakers, fuel marketers, and consumers understand how moving the RFS point of obligation will impose significant costs on small fuel marketers and ultimately American consumers while lowering the nation's overall consumption of renewable fuels," said David Fialkov, NATSO vice president of government relations. "It is a very complicated issue, however, so this video should clarify how the program really works, and how damaging it would be to change the point of obligation."

The video "provides a clear representation of how the fuel marketplace works today under the RFS and eliminates the confusion that has been created by those who wish to shift the point of obligation," said Tim Columbus, general counsel for NACS and SIGMA.

The video is viewable here.