By Robert Rapier, Guest blogger / March 22, 2013

Prices of ethanol credits have skyrocketed 1,400 percent as refiners get stuck with ethanol that they can’t profitably blend with gasoline. Courts may take up fairness of renewable fuel standard, which has caused the glut.

Last week, US refiners suffered a bit of a setback as the cost of complying with US ethanol mandates skyrocketed. The Financial Times recently reported that the price of ethanol credits has risen 1400 percent — from pennies to more than a dollar each — since the beginning of 2013. This situation was set into motion nearly a decade ago when the Energy Policy Act of 2005 created a Renewable Fuel Standard (RFS) requiring 7.5 billion gallons of renewable fuel – primarily corn ethanol – to be blended into the fuel supply by 2012.

Read the full story here.

In addition to the “free RINs” sham, the ethanol lobby touts that corn ethanol is lowering gasoline prices, but they fail to account for the fuel’s lower energy content. Perhaps they’re simply not aware that ethanol contains 33 percent less energy per gallon than gasoline contains. Vehicles fueled with ethanol cover fewer miles per gallon than those running on conventional gasoline, meaning that if more ethanol makes its way into gasoline, consumers will be filling up their vehicles more often. Furthermore, when adjusted for this energy difference, AAA’s fuel gauge report shows E85 is more expensive than gasoline. On Friday, April 19, for example, nationally energy adjusted E85 at $4.13 per gallon was running 62 cents per gallon higher than regular gasoline, which averaged $3.51 per gallon.

Read more: http://www.politico.com/story/2013/04/energy-ethanol-corn-fuel-90583_Page2.html#ixzz2RU2Ymb6w

When Churchill said Americans do the right thing after exhausting all the other options, he was unacquainted with modern Washington. But every now and again that maxim turns out to be true, and so it may be this year with ethanol.

A growing right-left bicoastal coalition is loosening the ethanol lobby’s thrall over U.S. politics, and now it may succeed in introducing some rationality to the renewable fuels mandate that passed amid the George W. Bush energy panic in 2007.

To read the full piece, click here.