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Fuels

Fuel Coalition Launches to Fight RFS Change

Main Street Energy Alliance brings together fuel retailers, associations, major oil to battle point-of-obligation shift

WASHINGTON -- Opponents of a major proposed change to the Renewable Fuel Standard (RFS) are getting organized, launching a coalition of more than two dozen fuel retailers and marketers and major oil and industry associations.

The Main Street Energy Alliance (MSEA) formed this week to counter efforts by some merchant refiners to get the point of obligation—the party responsible for meeting biofuel blending quotas under the RFS—shifted downstream to fuel blenders and retailers. The more than two dozen members include major oils BP and Shell; associations NACS, SIGMA and NATSO; retailers 7-Eleven, Casey’s General Stores, Cumberland Farms, Giant Eagle, Kum & Go, Kwik Trip, Pilot Travel Centers, RaceTrac, Ricker’s, Sheetz, QuikTrip and Thorntons; as well as several fuel marketers.

Last year, the Environmental Protection Agency (EPA) under President Barack Obama proposed to deny petitions by refiners including CVR Refining and Valero Energy Corp. to move the point of obligation. But since the election of President Donald Trump, the dynamics have quickly shifted. In late February, reports emerged that Carl Icahn, a special adviser to Trump on regulatory issues and a majority owner in CVR Refining, was attempting to broker a deal with ethanol industry group Renewable Fuels Association (RFA) to drop its opposition to the change, with the hopes that Trump would then issue an executive order directing the EPA to change the point of obligation.

While the White House has denied an executive order is in the works, the news clearly alarmed fuel retail and biofuel industry groups, who argue it would undermine the RFS. They insist the point of obligation should stay with refiners who control fuel composition, which also provides an incentive for retailers, marketers and other non-obligated parties to blend renewable fuels.

“A small group of refiners and their investors are trying to push through changes to the RFS to line their pockets at the expense of consumers and small businesses,” said Michael Steel, spokesman for the Washington, D.C.-based MSEA, in a statement. “Shifting the point of obligation would add complexity for businesses, decrease the use of biofuels, and potentially increase costs for consumers. Many energy businesses and consumers on Main Streets across this country could be negatively impacted by this effort to reward just a small few.”

The formation of MSEA follows efforts by U.S. legislators, many in ethanol-producing states, to fight a change in the point of obligation. In March, nearly two dozen senators sent a letter to Trump urging him to not make this change to the RFS, arguing that moving the point of obligation downstream would “result in a massive, costly, time-consuming shift in compliance.”

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