Op-Ed: Rick Santorum: Refiners Attack President Trump at Their Peril
The Renewable Fuel Standard is working, exactly as intended when we passed the law with bipartisan congressional support more than a decade ago. (AP Photo/Nati Harnik)
Source: By Rick Santorum, Washington Examiner • Posted: Tuesday, January 2, 2018
Oil lobbyists aren’t accustomed to hearing the word “no.” And from an all-of-the-above perspective, that’s not always a bad thing. America needs more energy, not less. We still import about a quarter of all the oil we consume. But some petroleum companies seem to be taking their influence for granted, and that could prove their undoing with a White House that is known for drawing a clear line between friends and foes.
Most recently, a few refiners have begun smearing the president and his allies in Congress for refusing to abandon the Renewable Fuel Standard, which protects U.S. production of biofuels made from agricultural crops, farm waste, and even used cooking oil.
These refiners claim that allowing homegrown energy to compete at the fuel pump is too great a burden. A quick look their bottom line show that is simply not true. After the most recent quarter, Bloomberg reported that “oil refiners found themselves floating on a sea of cash.”
In truth, the RFS is working, exactly as intended when we passed the law with bipartisan congressional support more than a decade ago. That’s why 38 Senators, along with members of the House and a coalition of GOP governors, fought to protect the RFS this past summer. It allows hundreds of rural biorefineries and America’s hard-working farmers to compete at the fuel pump against foreign oil.
As a result, biofuels now supply at least 10 percent of America’s motor fuel, and they’ve saved the average U.S. household about $142 in gasoline expenses, according to the American Journal of Agricultural Economics. Moreover, the U.S. Department of Agriculture reports that starch-based ethanol cuts emissions by 43 percent, while research shows that cellulosic biofuels can cut emissions by 100 percent or more. It’s a win-win for America’s economy and the environment.
Thanks to the RFS, billions of dollars have been invested into making America the global leader in biofuel production, supporting hundreds of thousands of jobs and shielding drivers against price manipulation by OPEC and Russia. That’s why President Trump promised legions of Midwest voters that he would revitalize the rural economy and spur growth in rural towns by expanding the biofuels market. Since then, the president’s support for the RFS has been rock solid, helping turn around three straight years of falling farm income under the previous administration.
Without the RFS, this would never be possible. The petroleum market is not a free market. Global prices are under the direct influence of a foreign cartel, and oil companies still control the distribution and sales of motor fuel. In this environment, the RFS ensures that consumers benefit from real competition, and that’s where homegrown fuels shine. Ethanol costs less than gasoline and it replaces costly additives, providing a high-performance octane boost without the expense of toxic alternatives like benzene.
The complaints by oil refiners are as empty today as they were when these same refiners cried foul under Presidents Bush and Obama. In truth, RINs — the tradeable credits used by refiners to meet their obligations — are free for any refinery that is willing to blend renewable energy into the fuel mix. Those with extra RINs can sell them to others who refuse to invest in modern infrastructure. But those are not true costs. The value of RINs remains with the finished product, and it is returned to refiners once finished gasoline is sold to distributors and retailers.
The whole argument is an accounting gimmick designed to justify a D.C. talking point. Academic research proves the point, and the Trump EPA has independently verified “that refiners are generally able to recover the cost of RINs in the prices they receive for their refined products, and therefore high RIN prices do not cause significant harm to refiners.” Even the unions that some refiners have turned into campaign tools acknowledge that RINs “might not be impacting them as stated.”
That’s why, outside of the D.C. swamp, business-oriented refiners like Tesoro are investing in new blending capacity to offer consumers cleaner, more affordable options at the pump.
In truth, the RFS makes crystal clear economic sense, and it remains vital to U.S. energy security. President Trump deserves credit for protecting U.S. energy investments and rejecting deeply flawed arguments from those seeking to destroy rural jobs and undermine U.S. biofuel production.
Former Sen. Rick Santorum, R-Pa., is co-chair of Americans for Energy Security and Innovation, a non-profit organization supported by biofuels producers and investors across the country.
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