Bob Dinneen, president and CEO of the Renewable Fuels Association gave a legislative update during the 8th Annual Iowa Renewable Fuels Summit and spoke of the efforts of Big Oil to quash the renewable fuel industry. The Summit took place on the last day of the EPA comment period for the 2014 proposed Renewable Fuel Standard (RFS) and Dinneen told a funny story.
In December when the EPA hosted its public hearing, that lasted nearly 10 hours, the American Petroleum Institute (API) hired young kids to ride around in support of oil. However when Iowa Governor Terry Branstad gave his comments (he also gave an impassioned speech during the Summit) the kids hired by API cheered for renewable fuels. Needless to say, Dinneen noted that API was none too happy, but he said that shows that consumers do want the choice and they will choose renewable fuels like ethanol.
So I asked Bob why this fight is this happening. Why did the EPA go backwards on its 2014 RFS proposal?
“Well it’s happening because some bean counter in the Office of Management and Budget decided to take API’s talking points and accept them as fact,” answered Dinneen. “That somehow the rising price of renewable fuel credits (RINs) was going to drive up the price of gasoline. “Now there is no credible evidence to make that suggestion. Indeed if you were to plot the price of RINs versus the price of gasoline, there is actually a negative correlation suggesting that gasoline prices will be driven down by higher RIN prices.”
Dinneen noted that the EPA has become confused by the issue and hopes as the agency reviews all the comments will have a better understanding in RINs and what they were supposed to do – incentivize investment in E85 refueling infrastructure, allow E15 to be offered and provide consumer choice at a reasonable cost.
This fight is about access to the consumer, its about market share said Dinneen. API has been losing battles and is trying to re-litigate the RFS. Yet Dinneen said the RFS is doing everything it is supposed to do. He believes that at the end of the day, API will lose again.
This process will take several months. “I wish they would come to their senses sooner. The marketplace could certainly use the certainty that that would provide. But the reality is its going to take a while,” explained Dinneen.
I asked him what consumers should do after the comment period closes. “Consumers should recognize while farmers have a lot of stake here, they do as well,” answered Dinneen. “Because without ethanol, without the RFS, there price of gasoline goes up. So consumers should recognize they have as much at stake in all of this as the ethanol industry itself.”
Listen to my interview with Bob Dinneen here: Bob Dinneen: Consumers Want Choice at the Pump