It’s a welcome surprise that the latest attack on the Renewable Fuels Standard mandate was recently launched by the head of Valero Energy Corp, which is the nation’s third largest corn-ethanol producer. Valero CEO Bill Klesse called on lawmakers to scrap and rewrite the country’s renewable energy policy. Testifying before the Senate Energy and Natural Resources Committee, Klesse said “the RFS is broken. We should repeal it and start over. The situation has completely changed.”
He couldn’t be more right.
Valero operates 15 refineries and 10 corn-ethanol plants. Klesse told the Senators the eight-year-old law that requires refiners to produce alternative fuels to help reduce the country’s dependence on foreign energy is “out of control” and needs to be overhauled to better reflect today’s marketplace.
Specifically, when the fuel standard was passed in 2005 and set the volume of alternative fuels required, refiners were mandated to meet renewable volume obligations through the submission of renewable identification numbers. The numbers provided a method of tracking the program as well as some flexibility because they could be bought and sold. But, the numbers market has caused significant unintended consequences. READ MORE….