Oil Industry Blames RFS for Gas Prices

Cindy Zimmerman

With gas prices on the rise again, the Senate Energy Committee held a timely hearing today on domestic oil production and fuel prices, and representatives of the oil industry used it as an opportunity to blame the Renewable Fuel Standard (RFS) for volatile prices.

gas-prices-valeroValero Energy CEO Bill Klesse noted in his testimony that his company supports ethanol production and owns ten ethanol plants, but he blames the RFS system of buying biofuels credits, called Renewable Identification Numbers (RINS) for fuel price volatility. “The Renewable Fuel Standard is out of control. It is broken. RINS are going up as we speak,” he said. “The RFS must be fixed. This cost is just skyrocketing.”

Klesse and other witnesses also challenged the use of E-15 as a way of increasing the use of ethanol. “We are not supportive of E-15 for all the reasons that have been stated – car warranties, pumps, everything that goes with it,” he said. Klesse RFS Comments

gas-prices-stabenowCommittee member Debbie Stabenow (D-MI), who chairs the Senate Agriculture Committee, questioned the panel about support for blender pumps to allow higher blends of ethanol in the marketplace. Petroleum Marketers Association of America President Dan Gilligan claims other types of infrastructure are needed. “We spend a lot of time talking about making dispensers capable of E15, we’re concerned about all the stuff under the ground – storage tanks, piping, glues that were used – how will those perform with a higher level of ethanol?” he asked. “It’s a real tangled web of issues.”

Stabenow pointed out the need for competition in the marketplace. “I’m all for competition and I’m anxious to make sure that we have the opportunity for lots of different choices for fuel at the pump,” she concluded. Senator Stabenow Q&A

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