HARRISBURG – Senator Bob Mensch (R-24) Senate Resolution 139 was adopted today by the Pennsylvania Senate. This Resolution encourages the United States Environmental Protection Agency (EPA) to consider and act quickly to implement strategies to help provide more certainty and price stability in the Renewable Identification Number (RIN) market.
The Renewable Fuel Standard (RFS) requires U.S. transportation fuel to contain a minimum volume of renewable fuel. The RFS—established by the Energy Policy Act of 2005 and expanded in 2007 by the Energy Independence and Security Act – began with 4 billion gallons of renewable fuel in 2006 and is scheduled to ascend to 36 billion gallons in 2022. The Environmental Protection Agency (EPA) has statutory authority to determine the volume amounts after 2022.
Reduced demand for oil and gas due to COVID-19, along with actions taken in the Trump administration, have resulted in enormous volatility in the RFS markets. This has made it difficult for independent merchant refiners, such as Monroe Energy Transfer in Delaware County to meet their RFS obligations.
Of particular concern is the implementation of the RFS compliance trading system used by EPA, the Renewable Identification Number (RIN) market, which has fluctuated wildly as a result of various market forces. The market prices for a biodiesel RIN or a corn ethanol RIN are surpassing all-time high levels. In May of 2020, the price of RINS was 36 cents, and in May 2021, it has now reached $1.86
“Allowing RIN prices to spike to these levels makes it extraordinarily challenging for refiners to engage in midterm economic planning and budgeting—let alone to attract capital to undertake long-term major investments that create new, high-quality jobs,” said Mensch.
Senate Resolution139 asks the EPA to consider and act quickly to implement strategies to help provide more certainty and price stability in the RIN market.
“Inaction by the EPA would have a ripple effect in the state,” said Mensch. “According to a study performed by the Commonwealth of Pennsylvania, each refining job in southeastern Pennsylvania has a large multiplier effect on the regional and statewide economy, supporting an estimated 18.3 jobs in southeastern Pennsylvania, and 22 jobs statewide. Inaction could also create a national security threat: If US refineries close, PA and the country would be more reliant on foreign petroleum and cybersecurity threats on pipelines.”
Watch Senator Mensch’s floor remarks here.
For more information on Senator Mensch’s legislation, visit www.senatormensch.com. State updates can also be found on Senator Mensch’s Facebook at facebook.com/PASenatorBobMensch/ or Twitter @SenatorMensch.
CONTACT: Madison Scarfaro firstname.lastname@example.org (215) 541-2388