The four-week rolling average blending rate for ethanol in the United States reached 9.94% in the week ending October 10, according to Platts. The 10% blend rate was surpassed for one week in mid-September.
Ethanol blenders, including major independent refiners like Valero Energy Corp. (NYSE: VLO) and Tesoro Corp. (NYSE: TSO), in general like the low price of ethanol, which dropped below $1.60 a gallon earlier this month, less than half the price of a gallon of ethanol at its peak in August. Blenders took a beating in 2013 when corn prices skyrocketed, demand was falling and blenders bought renewable energy credits called RINs, bidding the price up from a few cents to more than $1.00.
Producers like Archer Daniels Midland Co. (NYSE: ADM) and Pacific Ethanol Inc. (NASDAQ: PEIX) are not so happy this year. The producers want the federal government to raise the federally mandated blending amounts for 2014. Refiners and blenders oppose raising mandated limits and sent a letter to the U.S. EPA outlining its case for leaving the mandated levels where they are:
EPA is now 10 months late in finalizing the 2014 rule. If EPA raises the volume requirements, the supply chain is unable to retroactively generate additional compliance credits for the first nine months of 2014. This problem will grow in 2015 as EPA continues to delay release of the 2015 proposed rule, compounding compliance challenges for obligated parties managing volatile and uncertain RIN markets,” according to the refiners’ letter. … Our industry does not oppose renewable fuels and is one of the largest investors in renewable technologies. However, technological and market limitations exist and consumers, not the federal government, should determine what goes in their cars.
Why this matters to consumers is that, if the EPA waits too long and increases the blending requirements — unlikely but possible — the scramble for RINs and more ethanol could undo some of the drop in prices we have seeing at the gas pump.
ALSO READ: 5 Reasons Oil Is Not Rising
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
