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Baker & O’Brien presents ‘The Renewable Fuel Standard: Petroleum Marketing Issues’ at the Petroleum Marketing Attorney’s Meeting.

April 20, 2012

The ability of Obligated Parties to meet the Renewable Fuel Standard (RFS) requirements will become much more difficult and costly in the next few years due to the significant marketing barriers to expanded ethanol use in gasoline. The growth potential for E85 does not appear promising and the rollout of E15 in the marketplace is fraught with a multitude of regulatory, environmental, and marketing issues. With the increased use of ethanol stymied for the next several years, RFS compliance will rely heavily on the increased blending of biodiesel into on-road diesel fuel and heating oil. Compliance costs to satisfy the 2012 RFS biodiesel blending requirement are estimated to account for more than 80 percent of total RFS compliance costs. Unless the current RFS requirements are significantly modified to reflect marketplace realities, including the actual availabilities of specified biofuels and various economic issues, the net result will be an increase in energy costs, which will pose a threat to long-term economic growth and make the United States (U.S.) less competitive in the world market.

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