Marathon CEO rails against ‘flawed’ Renewable Fuel Standard

Source: By Houston Chronicle • Posted: Tuesday, March 26, 2019

This July 11, 2012, handout photo provided by the Renewable Fuels Association shows a Lawrence, Kansas, fueling station pump with various Photo: Robert White, HO / Associated Press

The program mandates that refineries blend ethanol into their fuels to curb pollution or buy credits to subsidize others that do blending.

“The objective of the RFS was to help us achieve energy independence,” Heminger said, but instead refineries often rely on importing biofuels to meet the standards.

“It has not created a market for next-generation biofuels,” he added, speaking at the American Fuel and Petrochemical Manufacturers annual meeting in San Antonio earlier this week.

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It’s the second time in two weeks Heminger has spoken against the standard. Last week at IHS Markit’s CERA Week in Houston, he said U.S. refiners already rely on ethanol to boost octane in gasoline, a point he reiterated this week.

“My company, Marathon Petroleum, was using ethanol in gasoline long before the RFS was enacted. We have no objection to ethanol or other biofuels, but we do have a problem with mandates, because they subvert consumers’ choices and distort markets,” he said Tuesday.

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In spite of the Trump Administration’s attempts to reform the standard, much of the existing framework in the law is still in place because of support from corn producers in the Midwest.

The EPA is set to take over setting the program’s renewable fuel targets after 2022.

In light of the upcoming reset, Heminger called on the petroleum and ethanol industries – normally at odds over the RFS issue – to come together to reform the program. He highlighted how collaboration between the industries is needed now, particularly as governments try to push electric vehicle adoption over traditional gasoline-powered cars, which could undercut demand in their respective industries.