Relief in sight for gas prices? Maybe:
Federal environmental regulators are expected to significantly reduce their biofuel blending mandates for next year, marking a historic retreat from an ambitious 2007 law, according to industry and trade sources.
The U.S. Environmental Protection Agency (EPA) is considering a proposal that would set next year’s target for use of renewable fuels at 15.21 billion gallons, less than the 18.15-billion gallon 2014 target established in the law, according to the sources, who said the new figures have circulated in Washington policy circles over the past week.
At 15.21 billion gallons, the proposal would leave room only for some 13 billion gallons of corn-based ethanol to be blended into the nation’s gasoline supply – down from 13.8 billion this year and 14.4 billion required by law for 2014.
Speculation and media reports about the potential reduction in the blending levels ripped through financial markets on Thursday, spurring a major rally in the shares of independent refiners who have been paying hundreds of millions of dollars to buy ethanol credits to cover their blending obligations.
Last I’d read, those ethanol credits are adding a dollar to the price of every gallon of gas you buy. This was never about protecting the environment; it was always about lining the right pockets.