Let's Start a War on Ethanol; Why RINs Could Be 2013's 4-Letter Word For Gas PricesSubmitted by Michaelwiseguy on Tue, 04/09/2013 - 02:01
From one of my favorite posters on Zero Hedge, and you may have noticed I don't write too much of my own original content, because I don't like re-inventing the wheel.
Mon, 04/08/2013 - 22:31 | 3424792
"I love the Ethanol program; it would be hard to find a program that combines so much damage into one synergistic inferno!
1) Drives up the cost of food inputs, and meat. So JQ Hapless spends more on food.
2) Lowers the avg. mileage per gallon by lowering the energy in Ethanol contaminated gas. So JQ Hapless must spend more to go a given distance.
3) Adds complication to refining and distribution, further increasing the cost per gallon, driving up JQ Hapless' expenses.
4) Requires massive subsidies which the nation, bankrupt, can hardly afford.
5) Uses massive amounts of groundwater that is not/cannot be replenished. Aquifer, goodbye.
6) Damages vehicles, destroys chainsaws and other small engines.
It may be the most Evil, incompetent and criminally Demonic program in the History of the Republic - and that's saying something. I marvel at it, and I gape with wonder."
"RIN is the mechanism for enforcing the Renewable Fuel Standards (RFS) - Suppliers can either blend their own to meet standards OR buy RINs from other blenders... due to weather issues last year 2012 RINs were in short supply - and with Feb as the last date to pay for them we saw prices surge. These RIN prices were passed on to customers at the pump. The problem is there is now not enough for 2013 (and even less for 2014) which means that instead of $0.03, RINs for 2013 could stay high in the $0.75 to $1.00 range (depending on ethanol production) and higher for 2014. This could mean the implementation of several possible alternatives - dependent on exogenous factors such as the supply of feedstock (corn, soybeans, sugar and palm oil) and spare biofuel production and blending capacity - supporting corn prices but the higher prices, we suspect, will lead Congress to revise (lower) its RFS mandates. At current levels, given the weighting of renewable fuels, RINs are adding around 7c to each gallon at the pump; should the RINs rise to $3, then that will mean a 10% rise in the price at the pump implying a 0.9% drag of GDP growth - something our Congress won't accept."