RFA says Indiana oil refinery shutdown shows need to rely less on fossil fuels

In Washington, Renewable Fuels Association President and CEO Bob Dinneen issued the following statement in response to the shutdown of the BP 240,000-barrels-per-day refinery in Whiting, Indiana, which has caused gasoline prices to spike in Illinois, Michigan, Indiana, Ohio, Missouri, and Wisconsin, and could cause prices to increase in other Midwest states.

“The Whiting refinery outage demonstrates, once again, the folly of relying too heavily on one source of motor fuel. It’s worth noting that the refinery represents just 6 percent of the Midwest region’s refining capacity (and just 1 percent of national refining capacity); yet retail gas prices in some Midwest markets have spiked by 50 cents per gallon or more. This is exactly why we need to further diversify our nation’s fuel supply and allow more renewable fuels by removing arcane barriers erected by the oil companies and the Environmental Protection Agency (EPA). Using more low-cost ethanol would absolutely help insulate consumers from these kinds of price shocks.

“All of the lost gasoline output (roughly 120,000 bbls/day) resulting from this outage could be offset if all gasoline in the Midwest region immediately transitioned from E10 to E15. Moreover, ethanol in the Chicago wholesale market is roughly $1 per gallon lower than gasoline today. That means if refiners and blenders serving the Midwest market immediately switched to producing E15 to blunt the impacts of this refinery outage, gas prices would instantly fall by at least 5 cents per gallon and drivers in the Midwest would save about $6 million per day. In reality, the price impacts would likely be even more significant, as ramping up ethanol blending would immediately take the pressure off tightening gasoline stocks and ease wholesale gasoline prices.

“EPA and the Obama Administration have all the tools they need to help alleviate this situation quickly. We call on EPA to immediately waive RVP requirements for E15 and also allow E12 blending—based on the fact that it is substantially similar to E10—in the Midwest region to facilitate expanded ethanol blending and blunt the consumer impacts of this refinery outage.”