Get Ready For The Ethanol ‘Blend Wall’


corn field

Here’s another liberal policy that’s coming back to bite us. The drought last year caused a reduction in corn crops, but thanks to the renewable fuel standards set by the government, that’s going to translate to even higher fuel costs for consumers. The producers will either have to pay more for ethanol, which is derived from corn, or pay for Renewable Identification Numbers (RINs), which is a trading scheme dreamed up by the progressives. The price for RINs is skyrocketing as the availability of ethanol declines, a situation that industry insiders refer to as a “blend wall.”

Prices of renewable fuel credits, needed by refiners to comply with the nation’s Renewable Fuel Standard, have skyrocketed over the past few months, an indication to some that the dreaded “blend wall” is close.

The price for the traded Renewable Identification Numbers (RINs) for corn-based ethanol have jumped from a trading range of about 2-3 cents/RIN to as much as 79 cents/RIN.

Trading for 2013 ethanol RINs Tuesday started the day at 75 cents/RIN and got as high as 79 cents/RIN before droppingback down to 75 cents/RIN by assessment time. Platts assessed RINS Tuesday at 75 cents/RIN.

In other words, don’t expect the cost of gas to come down any time soon. And just think, the progressives want to increase the amount of ethanol mixed with gasoline.

H/T to Hot Air where there’s more on this misguided progressive policy.