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Rift over renewable fuel credits divides energy industry all the way to the gas pump
Monday, July 10, 2017 at 2:56pm

Bill Douglass Talks about renewable fuel credits.

Dallas Morning News story: 

Full Article Here

...the heavyweight push for that change comes from independent refiners like San Antonio-based Valero and Dallas’ HollyFrontier. They offer prime examples of obligated parties that don’t blend enough biofuels to meet their federally mandated quotas.
That means they have to buy RINs, potentially ones produced by BP, Shell or other competitors that maintain robust blending operations.
George Damiris, HollyFrontier’s chief executive, said his company spent $250 million on RINs last year — “more than we spend on anything in our company, other than the crude oil.” He said that with no change, the “non-sustainable” trend is “going to cost our employees their jobs.”
Some smaller fuel retailers led by Sherman distributor Bill Douglass have also joined that fight.
Smaller operators typically carry the signage of major oil companies like Exxon Mobil, simply because they sell that brand of gas. Some of them take issue with chains like QuikTrip and Irving-based 7-Eleven, who are positioned to blend fuel and reap the revenue from selling RINs.
Douglass said that disparity could be “fatal,” pricing out some mom and pop shops.
Opponents of the shift contend that it would inject uncertainty and complexity into the system. They argue, as a top BP official put it this year, that such a move would force them to spend lots of money to reconfigure “considerable investments in systems, people, and processes.”
And they say if others are at a disadvantage, that’s the result of those companies not making the right business choices.
“This isn’t a structural impediment,” said Tim Columbus, who’s been the point person for several entities in his role as general counsel for the National Association of Convenience Stores. “This is a commercial decision.”
So what does it all mean for the price-conscious consumer like Juanillo, the Dallas driver? It can be hard to tell.
Experts disagree on how exactly the RIN value — as either expenses or revenue — gets taken into account by refiners, retailers, and others in the fuel chain. The debate at the retail level is illustrative, given that the big chains point to many factors that allow them to price competitively.
A 7-Eleven official said the RIN is indeed used to “pass down the savings to consumers.” Douglass, the smaller retailer, agreed consumers might find “nothing bad about that.” But he wondered what happens to prices if there is consolidation because the “little guy can’t compete.”

 

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