Craddick: Ethanol mandates help Wall Street, and hurt Texas
HOUSTON – In case you missed it, please see Railroad Commission Chairman Christi Craddick’s editorial on reforming the Renewable Fuel Standard (RFS) and capping Renewable Identification Numbers (RINs) prices, as published in the Houston Chronicle today. The editorial can be read online here and below.
Ethanol mandates help Wall Street, and hurt Texas
By Chairman Christi Craddick
The Lone Star State is blessed with strong energy and agriculture industries, both of which sustain thousands of jobs all over our state and play an important role to our national and economic security.
The mining and utilities industry is the largest contributor to Texas’ GDP, and the food and fiber system is ranked second.
Unfortunately, both industries are falling victim to a broken regulatory framework out of Washington, D.C. Right now, there is debate surrounding the Renewable Fuel Standard (RFS), a federal program requiring transportation fuels to contain a certain amount of renewable resources such as ethanol, specifically as it regards the price of Renewable Identification Numbers (RINs).
The EPA made up RINs with the goal of designing a minimally burdensome enforcement mechanism for the RFS. In fact, when they were first introduced, RINs sold for a penny or two each. Now, however, RIN prices have skyrocketed and cost as high as $1.40 each. These increased costs are putting considerable pressure on Texas refiners as they have had to direct more and more of their bottom line to paying these fees, rather than reinvesting in the state’s economy. As a result, thousands of Texas refinery jobs are at risk.
The most unfortunate part about the RINs system is that those who benefit from it are neither corn farmers nor refinery workers, but rather Wall Street speculators who reap profits from RINs.
Our own governor recognized the threat of high RIN prices on Texans’ jobs and wrote to the EPA asking for relief, explaining that “current implementation of this dated federal mandate severely impacts Texas’ otherwise strong economy and jeopardizes the employment of hundreds of thousands of Texans. ”
And U.S. Senator Ted Cruz, R-Texas, is currently leading the effort in Washington to defend the interests of Texans from this broken system. Senator Cruz has called for a “win-win” solution that will simultaneously bring RINs prices down and protect Texas refinery jobs, while enabling Texas farmers to grow and sell more corn.
The White House is meeting with senators from Texas and the Midwest and interests representing ethanol producers, refiners and unions. Negotiations are ongoing.
Senator Cruz and those working to achieve a fair and reasonable solution are focused on allowing all industries across the state to grow — from agriculture, to oil and gas, to renewable and alternative sources of energy — and take full advantage of the agricultural and energy resources we have right here at home. Texans should support efforts to reform the RFS and cap RIN prices, for the good of the Texas economy and all Texans.