35 groups urge EPA to maintain RFS point of obligation

February 26, 2017 |

In Washington, a diverse group of more than 35 organizations and companies representing downstream blenders, fuel retailers, marketers and end users at the federal and state levels expressed support to keep the current compliance structure under the RFS.

“NATSO is heartened by the overwhelming number of stakeholders who are urging the EPA to keep the RFS compliance with refiners, importers and manufacturers,” said Lisa Mullings, president and CEO of NATSO. “We urge the EPA not to shift compliance onto thousands of small business fuel retailers, which would inject massive disruption into fuels markets and raise fuel prices, ultimately harming the economy and hard-working Americans.”

The RFS has been an ongoing point of contention between major players in the fuel industry. A handful of refiners and investors have petitioned the EPA to shift compliance requirements down the supply chain. Doing so would undercut the program’s efforts to sustain the use of renewable fuels in gasoline and diesel fuel. The current structure creates a strong incentive for blenders, retailers and marketers to integrate renewable fuels into the supply chain.

“The RFS is working as intended by creating stable gas prices and encouraging renewable fuels in our gas supply,” said Tim Columbus, general counsel of the National Association of Convenience Stores and SIGMA. “But if the EPA shifts compliance, it would unnecessarily complicate the program, needlessly disrupt the markets for motor fuels, and hurt consumers most.”

In addition to undermining the purpose of the program, this change would increase gas prices for consumers as downstream players’ ability to satisfy their obligations would be dictated by upstream counterparts, who have the leverage and incentive to raise prices. A recent Penn Schoen Berland (PSB) survey released earlier this year revealed that 86 percent of voters agree that a compliance shift would increase gas and diesel prices at the pump.

The change would also add significant compliance costs and burdens to freight shippers, which would ultimately raise the cost of consumer goods through higher shipping costs. For example, if the compliance changes, Class I railroads would need to expend between $112.5 million and $214 million just to acquire Renewable Identification Numbers (RINs) to comply with 2016 Renewable Volume Obligations (RVOs) – based on 2016 numbers. California’s enactment of the Low Carbon Fuel Standard is a cautionary tale. In light of the market’s experience in California, it would not be implausible for the railroads to have to pay between $260 and $447 million more for fuel.

Following is a list of the diverse group of associations and companies that submitted comments in support of keeping the current compliance requirements:

Advanced Biofuels Association

Giant Eagle

Petroleum Marketers & Convenience Store Association of Kansas

Association of American Railroads

Gresham Petroleum

Owner-Operator Independent Drivers Association

American Short Line and Regional Railroad Association

Growth Energy

Pilot Travel Centers LLC

American Trucking Associations

Guttman Energy

Ports Petroleum Company Inc.

Boyett Petroleum

J.D. Streett

QuikTrip Corporation

California Independent Oil Marketers Association

Kwik Trip, Inc.

RaceTrac Petroleum, Inc.

Casey’s General Stores, Inc.

Midwest Petroleum

SEI (7-Eleven)

Circle K

Murphy USA

Sheetz

Chronister Oil

National Association of Convenience Stores

SIGMA

Cumberland Farms

Ohio Petroleum Marketers and Convenience Store Association

Thorntons Inc.

Double Quick, Inc.

Pennsylvania Food Merchants Association

UPS Global Public Affairs

GATE Petroleum Company

Petroleum Marketers and Convenience Stores of Iowa

Wawa

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