As part of his ongoing war against the ethanol industry, Senator Ted Cruz traveled to Philadelphia this week to meet with oil refinery workers who claim to be facing layoffs and financial ruin due to the federal mandated Renewable Fuel Standard (RFS).
The now-bankrupt refinery, Philadelphia Energy Solutions, has argued that the cause of its financial problems are renewable identification numbers, or RINs, federal credits that refineries must purchase if they are unable to blend ethanol with gasoline as federal law requires. Credit prices fluctuate and in the past year, have risen from a few cents to nearly $1.40 apiece.
Cruz describes RINs as a government license, and using the refinery’s narrative to further his plans to overhaul the ethanol industry and reform the RFS, Cruz states that requiring a business to “spend more than double [their] payroll to write a check not to buy anything, not to pay anybody, not to buy any supplies, but simply to purchase a government license […] is crushing.” Cruz, along with other RFS critics, says the RFS will be disastrous for the oil refining sector.
However, while Cruz cites RINs as being the cause of 1,100 working class jobs lost, the ethanol industry continues to push back. The Renewable Fuels Association, the industry’s leading trade group, claims that Philadelphia Energy Solutions “has fallaciously blamed the RFS and RINs for its recent decision to seek bankruptcy protection.” The association also provided research that it says shows RINs aren’t a serious concern for refineries.
Ethanol leaders claim they’re willing to speak further on the topic, but maintain that the Philadelphia refinery’s woes has nothing to do with their product, but rather “antiquated technology” and the new Dakota Access pipeline and the elimination of the oil export ban, both of which have cut off its supply of crude oil. Bob Dinneen, Renewable Fuels Association President, goes on to comment: “But it’s so much more expedient to blame ethanol.”
Back in Philadelphia, the refinery and the United Steelworkers, which represents its employees, called those claims “dishonest.”