The national average for gas prices has surpassed $4.50 per gallon, up roughly 45% from a year ago. If Congress passes a bill that allows for year-round higher ethanol content in gasoline (“E15”) without protecting small refineries, Americans’ pain at the pump will only get worse.

The proposal moving through Congress would permanently allow E15 to be sold year-round. The issue is not the use of ethanol, or even higher blends, for that matter. Rather, the problem is a 20-year-old mandate that requires ethanol to be blended into the fuel supply.

The Renewable Fuel Standard (RFS) requires refiners to mix biofuels into America’s gasoline supply, primarily by using corn-based ethanol. Each domestic refiner must have a percentage of its domestic sales be blended ethanol. 

Refiners have the option to meet part of their obligation by buying credits, known as renewable identification numbers (RINs).  The Environmental Protection Agency requires RINs to track and hold refiners accountable for meeting government-mandated renewable-fuel volumes.

The RFS and RIN obligations raise fuel prices. RINs are trading roughly between $1.65 and $1.95. The costs move through wholesale markets and supply chains and ultimately show up at the fuel pump. At those levels, the cost embedded in a gallon of gasoline is on the order of 20 to 30 cents.

For small refineries, RFS compliance can be........

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