The high price of ethanol credits has energy industry experts saying the U.S. refining industry has hit the “blend wall,” which could limit the country’s fuel supply as refiners cut back production or export more fuel to stay in compliance with the federal Renewable Fuel standard.
“That’s a very real concern that we have, that the RFS acts as a limitation on fuel supply,” Patrick Kelly, senior policy advisor at the American Petroleum Institute, told The Daily Caller News Foundation. “The blend wall is a 2013 problem. It gets worse as years go on. You can see it in the RIN price — we’re there now.”
“The increase in RIN prices — it increases the cost of manufacturing,” Kelly added. “We’re also concerned about the impact on supply. Any reduction in supply would also put upward pressure on prices.”