Gov. John Carney (D-Delaware) and members of Delaware’s Congressional delegation are calling on the Trump administration to investigate possible price manipulation of renewable fuel credits.
The credits in question are used by oil refineries to meet renewable fuel standards.
It’s an issue for PBF Energy, which owns the Delaware City refinery. PBF Energy’s Michael Karlovich compares the current fuel credit system to ticket scalping.
Oil refiners and importers must blend a certain amount of ethanol into the nation’s gas supply every year. But merchant refiners like PBF Energy do little or no blending, so they buy the credits to comply with federal law.
Sen. Chris Coons (D-Delaware) said price of fuel credits have spiked from a few cents per gallon of ethanol to nearly $1.50 a gallon. He says that market volatility hurts East Coast refineries.
“I think that merchant refineries, refineries that aren’t connected to a big international oil company, are facing really unjustifiably high costs because of this and it’s my hope that either the FTC or the EPA will take action to try to address the burden on the refinery in Delaware City,” he said.
Coons and the rest of Delaware’s Congressional Delegation have signed a letter with officials from Pennsylvania and New Jersey in calling for an end to any price manipulation.
“I’ve joined with Sen. Carper and with Gov. Carney and others in advocating the EPA to look hard at whether this is fair and appropriate,” he said.
The EPA will decide on 2018 renewal fuel levels by the end of the month.