House subcommittee holds hearing on RINs

By Erin Voegele | July 25, 2018

On July 25, the U.S. House Committee on Energy and Commerce’s Subcommittee on Environment held a hearing that aimed to educate members of the subcommittee on renewable identification numbers (RINs) and the role RINs play in the Renewable Fuel Standard.

In his opening statement, Subcommittee Chairman John Shimkus, R-Ill., stressed that the hearing aims to provide committee members the opportunity to better understand RINs. “The purpose of today’s hearing is very much educational in nature and is intended to promote greater understanding of how RINs fit into the overall Renewable Fuel Standard,” he said. “In order to chart a legislative path forward, it is critical that the subcommittee first gather the facts and comprehend the various complexities of the RFS program.”

“While understanding that the topic of this morning’s hearing can bring out strong viewpoints, my hope and intent, is that this hearing will result in a constructive and productive dialogue that will further this subcommittee’s efforts to improve the nation’s transportation fuel policies,” Shimkus continued.

Greg Walden, R-Ore., also stressed the educational nature of the hearing. “As I have said before, it is my desire to move legislation that will pave the future of transportation fuels in the United States, and in order for this to happen it is important that we understand what RINs are and how they fit into the Renewable Fuel Standard—a program that in 2017, spurred the production of 15.8 billion gallons of ethanol and 1.6 billion gallons of biodiesel in the United States,” Walden said.

“That said, this hearing is not meant to drive a pre-ordained policy or to settle scores,” Walden continued. “It is intended to help members understand the program so that they can make informed decisions when the time to legislate comes.”

Sandra Dunphy, director of energy compliance services at Weaver and Tidwell LLP; Gabriel E. Lade, assistant professor of economics at Iowa State University; Corey Lavinsky, director of global biofuels at S&P Global Platts Analytics; Paul Niznik, senior consultant at Argus Media Inc.; and Brent Yacobucci, energy and minerals manager at the Congressional Research Service, testified at the event.

The Renewable Fuels Association sent a letter to Shimkus and Ranking Member Paul Tonko, D-N.Y., stressing the most effective way to reduce the price consumers are paying at the pump is to let RINs to the job they were intended to do by stimulating increased ethanol production and blending.

“RIN credits are the engine that drives the RFS. Not only are RINs used to demonstrate compliance with annual RFS blending obligations, but they also serve as a critical economic incentive to expand the production and use of renewable fuels,” RFA explained to the lawmakers. “Studies show that higher RIN prices facilitate deeper discounting of ethanol-blended fuels (such as E15 and E85) relative to gasoline, and that wider discounts lead to greater consumption of these blends. In turn, greater demand for E15 and E85 stimulates increased production of ethanol, which leads to increased RIN generation and larger supplies,” the letter noted.

Within the letter, RFA also said “there is no evidence to support the notion that RINs push retail gas prices higher. In fact, RINs and retail E10 gas prices tend to be negatively correlated, with periods of high gas prices occurring during periods of low RIN prices and vice versa.”

Full copies of written testimony and a video recording of the two-hour hearing are available on the U.S. Committee on Energy and Commerce website. A full copy of RFA’s letter is available here