3-19-2013
http://www.bloomberg.com/news/2013-...d-ethanol-credits-valero-says.html?cmpid=yhoo
Ethanol Upending Refiners Pushes $13 Billion on U.S. Drivers
Bloomberg By Bradley Olson & Dan Murtaugh
U.S. drivers face a $13 billion increase in the cost of gasoline this year as the price of federally-mandated ethanol credits has risen 10-fold for oil refiners including Valero Energy Corp. (VLO) and CVR Energy Inc. (CVI)
Refiners buy biofuel credits, known as RINs, which are available as an alternative to actually blending ethanol into gasoline. The cost of those credits has ballooned from 7 cents at the start of the year to more than $1 as the 2013 federal mandate for biofuel exceeds 10 percent of gasoline sales, the maximum that refiners say the market can absorb.
Consumers are at risk of paying 10 cents a gallon more for gasoline this year if the ethanol credits continue to sell at a price of more than $1, Roger Read, a Houston-based analyst for Wells Fargo & Co. (WFC), said in a March 11 note to investors.
Pump prices may surge even more as the credits make imports more expensive and create an incentive for U.S. refiners to seek export opportunities where no ethanol blending is required, Read said.
Economic Cost
“The likely impact for U.S. consumers is higher gasoline prices as supply declines,” he wrote.
The Renewable Fuels Association, a Washington-based group that represents biofuel companies, had no immediate comment on the refiners’ statements.
An increase of 10 cents for every gallon of gasoline consumed with ethanol would equate to more than a $13 billion cost to consumers for the 13.8 billion gallons of ethanol that are mandated for blending this year, according to data compiled by Bloomberg.
To contact the reporters on this story: Bradley Olson in San Antonio at bradleyolson@bloomberg.net; Dan Murtaugh in San Antonio at dmurtaugh@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
================================================
Classic Scapegoating by Big Oil
This article is one of the most far-fetched cases of misinformation that I have ever seen reported. While this factually devoid piece may have a place in an opinion column, it is truly shocking that this is being reported as hard news.
First of all, just this morning, AAA, reported that average gas price has fallen for 17 of the last 19 days, when gasoline hit its year-to-date high of $3.79.That is in complete contrast to RIN prices, which are increasing. This negative correlation between lowering gas prices and increase RIN prices is definitive evidence that RINs are not a factor in gas prices.
This shows that the testimony of one individual from Marathon Oil at an EPA field hearing on March 8 suggesting that RINs will increase gas prices by 10 cents a gallon should not be taken as gospel. While he is entitled to an opinion, he certainly does not own the facts. It is time to peel back all the rhetoric and truly discuss what is going on with RINs and also discuss how they have NO impact on gas prices.
This is an issue about the forthcoming blend wall and refiners opting to pay a premium not to increase their blends from 10 percent ethanol to 15 percent, regardless of the exhaustive testing and EPA approval.
Their unflinching refusal to bring alternative fuels into the commercial marketplace, denying consumers both a choice and savings should be the real story.
Study after study has shown show that ethanol blended into fuel saves domestic consumers about $8 billion per year. Ethanol is not to blame, it is the solution. None of the recent press, or inflammatory statements from the oil companies mention the price savings that ethanol has generated in savings to the U.S. motorist. The reality is that ethanol is significantly less expensive, trading at substantial discounts to gasoline – roughly 70 cents.
When RINs were trading at only a few cents per gallon in February, when record gas prices were set after some 40 days of increases in gas prices, who was to blame then?
This is nothing more than a coordinated effort by oil companies and refiners who will stop at nothing to hold their near monopoly on the liquid fuels market and RIN prices are simply the most recent scape goat in the long quest to blame others for their absurd profits and never-ending increasing gasoline prices at the pump.
All we hear about is a domestic energy boom; more drilling and new oil and gas reserves.
But nothing changes; gas prices still increase and every time it’s the other guys fault, not the oil companies.
Let’s be honest here.
The oil industry is experiencing record profits on the backs of the American consumers.
And their industry sees renewable fuels such as ethanol that can be produced far less expensive than gasoline as a threat and they will go to great lengths to discredit any competition through misinformation and smear tactics.
Enough is enough – it is time to call this what it is – an orchestrated sham by the oil companies to manipulate markets, cause panic and attempt to use false data to blame an industry that has grown to be a threat to their record profits and bottom lines.
Ethanol is a win-win for America, creating jobs and revitalizing rural economies, it is better for our environment and it is reducing our dependence on foreign oil, all while providing consumers a choice and savings at the pump.
It is time for Americans to hear from someone other than oil companies, which are holding American consumers hostage to excessive prices and a dangerous dependence.
Tom Buis CEO, Growth Energy Washington, DC
Growth Energy Board Co-Chairs
Gen. Wesley Clark – U.S. Army (Ret.); Wesley Clark & Associates
Jeff Broin – POET, LLC
Growth Energy Board Members
Todd Becker, President — Green Plains Renewable Energy, Inc.
Bob Casper — POET Ethanol Products
Richard Childress — Richard Childress Racing
Ray Defenbaugh — Big River Resources, LLC
Dave Vander Griend — ICM, Inc.
Abe Hughes — New Holland Agriculture
Mark Marquis — Marquis Energy, Inc.
Steve McNinch — Western Plains Energy
Gary Pestorious — Pestorious, Inc.
Bruce Rastetter — Hawkeye Energy Holdings
Committee Chairs
Greg Breukelman, Communications
Greg Krissek, Technical
Mr. Gary Pestorious
Co-Owner
Frontier Family Farms
www.frontierfamilyfarms.net
20770 707Th Avenue
Albert Lea, Minnesota 56007
United States
Company Description: Frontier Family Farms is a local, family-run partnership comprised of three farming families, and a group of skilled employees, most of which have been with us for ten or more years. We are dedicated to improving the quality of every acre we farm through the use of new technologies. We work as a team with each landowner to optimize the productivity of each and every acre. By farming together, we maintain a financial strength upon which landowners may rely. Because of our unique business structure, we can assist with machinery liquidation or trading, offer tax-saving strategies to landowners who are nearing retirement, and help to protect the future of family farms.
www.growthenergy.org
Gary Pestorious, CEO, Pestorious, Inc. Gary Pestorious is CEO of a family-run 8,500-acre operation in Minnesota. Mr. Pestorious is a long-time member of the Minnesota Corn Growers Association and served as Chairman of POET-Glenville for the last ten years. He has served on the MCGA Board of Directors, the National Corn Growers Association's Ethanol Committee, and the American Coalition for Ethanol Board of Directors. Mr. Pestorious also served on the board of the Ethanol Promotion and Information Council and the Renewable Fuels Association. He currently serves on the boards of POET-Hanlontown and POET-Lake Crystal.
Daily Article Directory
www.mncorn.org, 22 Nov 2005 [cached]"Yes, this can be done," said Gary Pestorious."I see this industry growing as fast as possible and I do not think it will be a problem to get to ten percent by 2010." Pestorious is a member of the Minnesota Corn Growers Association board of directors and chair of EXOL, a farmer-owned ethanol cooperative in Albert Lea.He believes locally owned ethanol production can double in the next four years, and the remainder of the ten percent can be made up by ADM and other agribusiness conglomerates who have announced their intentions to build major ethanol production facilities in the US.
"I'm for Gil Gutknecht's plan," said Pestorious.
"Anything we can do as a country to stop losing our country's assets to foreign interests, whether it's ethanol, biodiesel, ethanol, solar, wind-any form of energy we can produce here, we should," said Pestorious....
Pestorious represents MCGA at ACE convention "I know SoyMor biodiesel meets ...
forums.tdiclub.com, 17 Dec 2009 [cached]"I know SoyMor biodiesel meets the specs," said SoyMor Chairman of the Board Gary Pestorious, "because it's a new state-of-the-art plant. We have an in-house lab and all our fuel is checked and is the highest quality that can be. THIS is what I like to see! ~BG Pestorious said the month-old law required diesel fuel sold in Minnesota to contain 2 percent biodiesel but it did not require the fuel to be produced in Minnesota. The impure biodisel may have been produced elsewhere in the midwest, he said, and shipped to Minnesota. "This is a very new industry," said Pestorious, "and when an industry grows as fast as this one is going to grow, there will be problems. This will make people in the industry real sure that their fuel meets specs. And that is as it ought to be." SoyMor General Manager Tony Prehm, agreed with Pestorious, saying it will probably be good for the industry.
Gary Pestorious, the ...
www.albertleatribune.com, 15 July 2011 [cached]Gary Pestorious, the chairman of the SoyMor Board of Governors, said more than 600 members of the SoyMor Cooperative approved the sale during a meeting June 27. "It hasn't been running for 3 1/2 years," Pestorious said. "We believe REG is going to start it back up." He said the plant closed after a big jump in soybean oil prices. ...
Pestorious said he thinks it will be positive for the community to have the company started back up and people hired.
===========================================
Interesting we continue to buy what the Oil companies shovel out.
Somehow Americans like to pay Valero, Exxon, BP, Halerburton, ect but not the American farmer.
The idiot author of the article can not do math he comes up $13BB...
If the shortfall is 400 MM gallons and the RIN's are $1 then the math is $400MM but he comes up with a number 32.5 times higher than the cost of the RIN's.
The idiot further ignores the fact that ethanol is now $0.70 per gallon cheaper than gasoline so @ 13.4BB gallons it saves the Oil companies roughly $9.1BB to blend ethanol into your gas...
Maybe Bloomberg needs to look at the math skills of their analyst...
==============================================
http://www.bloomberg.com/news/2013-...d-ethanol-credits-valero-says.html?cmpid=yhoo
Ethanol Upending Refiners Pushes $13 Billion on U.S. Drivers
Bloomberg By Bradley Olson & Dan Murtaugh
U.S. drivers face a $13 billion increase in the cost of gasoline this year as the price of federally-mandated ethanol credits has risen 10-fold for oil refiners including Valero Energy Corp. (VLO) and CVR Energy Inc. (CVI)
Refiners buy biofuel credits, known as RINs, which are available as an alternative to actually blending ethanol into gasoline. The cost of those credits has ballooned from 7 cents at the start of the year to more than $1 as the 2013 federal mandate for biofuel exceeds 10 percent of gasoline sales, the maximum that refiners say the market can absorb.
Consumers are at risk of paying 10 cents a gallon more for gasoline this year if the ethanol credits continue to sell at a price of more than $1, Roger Read, a Houston-based analyst for Wells Fargo & Co. (WFC), said in a March 11 note to investors.
Pump prices may surge even more as the credits make imports more expensive and create an incentive for U.S. refiners to seek export opportunities where no ethanol blending is required, Read said.
Economic Cost
“The likely impact for U.S. consumers is higher gasoline prices as supply declines,” he wrote.
The Renewable Fuels Association, a Washington-based group that represents biofuel companies, had no immediate comment on the refiners’ statements.
An increase of 10 cents for every gallon of gasoline consumed with ethanol would equate to more than a $13 billion cost to consumers for the 13.8 billion gallons of ethanol that are mandated for blending this year, according to data compiled by Bloomberg.
To contact the reporters on this story: Bradley Olson in San Antonio at bradleyolson@bloomberg.net; Dan Murtaugh in San Antonio at dmurtaugh@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
================================================
Classic Scapegoating by Big Oil
This article is one of the most far-fetched cases of misinformation that I have ever seen reported. While this factually devoid piece may have a place in an opinion column, it is truly shocking that this is being reported as hard news.
First of all, just this morning, AAA, reported that average gas price has fallen for 17 of the last 19 days, when gasoline hit its year-to-date high of $3.79.That is in complete contrast to RIN prices, which are increasing. This negative correlation between lowering gas prices and increase RIN prices is definitive evidence that RINs are not a factor in gas prices.
This shows that the testimony of one individual from Marathon Oil at an EPA field hearing on March 8 suggesting that RINs will increase gas prices by 10 cents a gallon should not be taken as gospel. While he is entitled to an opinion, he certainly does not own the facts. It is time to peel back all the rhetoric and truly discuss what is going on with RINs and also discuss how they have NO impact on gas prices.
This is an issue about the forthcoming blend wall and refiners opting to pay a premium not to increase their blends from 10 percent ethanol to 15 percent, regardless of the exhaustive testing and EPA approval.
Their unflinching refusal to bring alternative fuels into the commercial marketplace, denying consumers both a choice and savings should be the real story.
Study after study has shown show that ethanol blended into fuel saves domestic consumers about $8 billion per year. Ethanol is not to blame, it is the solution. None of the recent press, or inflammatory statements from the oil companies mention the price savings that ethanol has generated in savings to the U.S. motorist. The reality is that ethanol is significantly less expensive, trading at substantial discounts to gasoline – roughly 70 cents.
When RINs were trading at only a few cents per gallon in February, when record gas prices were set after some 40 days of increases in gas prices, who was to blame then?
This is nothing more than a coordinated effort by oil companies and refiners who will stop at nothing to hold their near monopoly on the liquid fuels market and RIN prices are simply the most recent scape goat in the long quest to blame others for their absurd profits and never-ending increasing gasoline prices at the pump.
All we hear about is a domestic energy boom; more drilling and new oil and gas reserves.
But nothing changes; gas prices still increase and every time it’s the other guys fault, not the oil companies.
Let’s be honest here.
The oil industry is experiencing record profits on the backs of the American consumers.
And their industry sees renewable fuels such as ethanol that can be produced far less expensive than gasoline as a threat and they will go to great lengths to discredit any competition through misinformation and smear tactics.
Enough is enough – it is time to call this what it is – an orchestrated sham by the oil companies to manipulate markets, cause panic and attempt to use false data to blame an industry that has grown to be a threat to their record profits and bottom lines.
Ethanol is a win-win for America, creating jobs and revitalizing rural economies, it is better for our environment and it is reducing our dependence on foreign oil, all while providing consumers a choice and savings at the pump.
It is time for Americans to hear from someone other than oil companies, which are holding American consumers hostage to excessive prices and a dangerous dependence.
Tom Buis CEO, Growth Energy Washington, DC
Growth Energy Board Co-Chairs
Gen. Wesley Clark – U.S. Army (Ret.); Wesley Clark & Associates
Jeff Broin – POET, LLC
Growth Energy Board Members
Todd Becker, President — Green Plains Renewable Energy, Inc.
Bob Casper — POET Ethanol Products
Richard Childress — Richard Childress Racing
Ray Defenbaugh — Big River Resources, LLC
Dave Vander Griend — ICM, Inc.
Abe Hughes — New Holland Agriculture
Mark Marquis — Marquis Energy, Inc.
Steve McNinch — Western Plains Energy
Gary Pestorious — Pestorious, Inc.
Bruce Rastetter — Hawkeye Energy Holdings
Committee Chairs
Greg Breukelman, Communications
Greg Krissek, Technical
Mr. Gary Pestorious
Co-Owner
Frontier Family Farms
www.frontierfamilyfarms.net
20770 707Th Avenue
Albert Lea, Minnesota 56007
United States
Company Description: Frontier Family Farms is a local, family-run partnership comprised of three farming families, and a group of skilled employees, most of which have been with us for ten or more years. We are dedicated to improving the quality of every acre we farm through the use of new technologies. We work as a team with each landowner to optimize the productivity of each and every acre. By farming together, we maintain a financial strength upon which landowners may rely. Because of our unique business structure, we can assist with machinery liquidation or trading, offer tax-saving strategies to landowners who are nearing retirement, and help to protect the future of family farms.
www.growthenergy.org
Gary Pestorious, CEO, Pestorious, Inc. Gary Pestorious is CEO of a family-run 8,500-acre operation in Minnesota. Mr. Pestorious is a long-time member of the Minnesota Corn Growers Association and served as Chairman of POET-Glenville for the last ten years. He has served on the MCGA Board of Directors, the National Corn Growers Association's Ethanol Committee, and the American Coalition for Ethanol Board of Directors. Mr. Pestorious also served on the board of the Ethanol Promotion and Information Council and the Renewable Fuels Association. He currently serves on the boards of POET-Hanlontown and POET-Lake Crystal.
Daily Article Directory
www.mncorn.org, 22 Nov 2005 [cached]"Yes, this can be done," said Gary Pestorious."I see this industry growing as fast as possible and I do not think it will be a problem to get to ten percent by 2010." Pestorious is a member of the Minnesota Corn Growers Association board of directors and chair of EXOL, a farmer-owned ethanol cooperative in Albert Lea.He believes locally owned ethanol production can double in the next four years, and the remainder of the ten percent can be made up by ADM and other agribusiness conglomerates who have announced their intentions to build major ethanol production facilities in the US.
"I'm for Gil Gutknecht's plan," said Pestorious.
"Anything we can do as a country to stop losing our country's assets to foreign interests, whether it's ethanol, biodiesel, ethanol, solar, wind-any form of energy we can produce here, we should," said Pestorious....
Pestorious represents MCGA at ACE convention "I know SoyMor biodiesel meets ...
forums.tdiclub.com, 17 Dec 2009 [cached]"I know SoyMor biodiesel meets the specs," said SoyMor Chairman of the Board Gary Pestorious, "because it's a new state-of-the-art plant. We have an in-house lab and all our fuel is checked and is the highest quality that can be. THIS is what I like to see! ~BG Pestorious said the month-old law required diesel fuel sold in Minnesota to contain 2 percent biodiesel but it did not require the fuel to be produced in Minnesota. The impure biodisel may have been produced elsewhere in the midwest, he said, and shipped to Minnesota. "This is a very new industry," said Pestorious, "and when an industry grows as fast as this one is going to grow, there will be problems. This will make people in the industry real sure that their fuel meets specs. And that is as it ought to be." SoyMor General Manager Tony Prehm, agreed with Pestorious, saying it will probably be good for the industry.
Gary Pestorious, the ...
www.albertleatribune.com, 15 July 2011 [cached]Gary Pestorious, the chairman of the SoyMor Board of Governors, said more than 600 members of the SoyMor Cooperative approved the sale during a meeting June 27. "It hasn't been running for 3 1/2 years," Pestorious said. "We believe REG is going to start it back up." He said the plant closed after a big jump in soybean oil prices. ...
Pestorious said he thinks it will be positive for the community to have the company started back up and people hired.
===========================================
Interesting we continue to buy what the Oil companies shovel out.
Somehow Americans like to pay Valero, Exxon, BP, Halerburton, ect but not the American farmer.
The idiot author of the article can not do math he comes up $13BB...
If the shortfall is 400 MM gallons and the RIN's are $1 then the math is $400MM but he comes up with a number 32.5 times higher than the cost of the RIN's.
The idiot further ignores the fact that ethanol is now $0.70 per gallon cheaper than gasoline so @ 13.4BB gallons it saves the Oil companies roughly $9.1BB to blend ethanol into your gas...
Maybe Bloomberg needs to look at the math skills of their analyst...
==============================================
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