Renewable Fuels Association President Wraps Up 2018

ORLANDO (DTN) -- For Renewable Fuels Association President and CEO Geoff Cooper, the ethanol industry's struggles in 2018 can best be summed up with a baseball analogy. "Yes, the ethanol industry had some big home runs in 2018," Cooper said during the National Ethanol Conference in Orlando, Florida, on Tuesday. "But we just couldn't seem to score that go-ahead run. We were always playing catch-up and it felt like we couldn't gain any ground in the standings. "Why? Because the other team on the field has the payroll of the New York Yankees and seemingly limitless resources. They play to win at any cost. They play dirty. They steal signs, throw spitballs, and use too much pine tar. They might even be using those PEDs (performance-enhancing drugs)." In the past two years, the ethanol industry has fought what it says has been lost demand from EPA granting at least 48 small-refinery waivers to the Renewable Fuel Standard, loss of the Chinese market, and a seeming reluctance on EPA's part to approve the year-round sale of E15, all while the industry struggled mightily financially. Above all, Cooper said, the small-refinery exemptions have hurt the industry most. "The effect of these refinery bailouts was devastating to the domestic ethanol market," he said. "Billions of RINs (renewable identification numbers) that refiners previously thought would be needed for RFS compliance were no longer needed, resulting in a flood of surplus RINs back onto the market, a collapse in RIN prices, and demand destruction in the physical markets." Cooper said the "deluge" of biofuel credits back onto the market meant that obligated parties such as refiners could comply with RFS by purchasing and turning in cheap RINs rather than taking steps to expand ethanol blending. Ethanol RIN prices fell to just 8 cents, meaning a refiner could buy 15 RINs for the same price as one gallon of ethanol. Ethanol prices plummeted with the collapse in RIN prices, Cooper said. Ethanol futures fell to their lowest price in history and rack prices collapsed to their lowest levels since 1999.