Total to hike Texas plant fuel exports amid costly ethanol credits
NEW YORK Oct 11 (Reuters) - French oil major Total will boost distillate exports and increasing the share of jet fuel it produces at its 174,00 barrel per day Port Arthur, Texas, refinery to ease a $100 million hit from rising ethanol credit costs, a company spokeswoman said on Friday.
Joining a list of refiners who have put a public price on the cost of complying with a landmark 2007 U.S. biofuel law, Total has been forced to buy renewable identification numbers (RINs) this year to meet its obligation because it does not blend any fuel itself, the spokeswoman said.
"The increase in (RIN) price is indeed translated into an additional cost for the company (around $100 million) and as a consequence, Total plans to increase exports and jet (fuel) production" because they are not subject to RIN requirements, the Total spokeswoman said in an emailed response to questions.
She declined to comment on figures for exports or jet fuel production.
The spokeswoman also said Total is working to improve logistics for exporting gasoline at the refinery in Port Arthur, its only plant in the United States.
Ethanol RINs, which in previous years had rarely traded for more than a few pennies, surged this summer to a record of about $1.45 each, with refiners and traders scrambling to stock up on credits for fear that they may not be able to blend enough ethanol into the U.S. gasoline pool to meet ambitious blending targets.
Prices have slumped since then, reaching around 30 cents on Friday, partly on signs that the Environmental Protection Agency (EPA) will make it easier for refiners to meet their blending mandate next year. A leaked EPA proposal obtained by Reuters showed a surprisingly deep reduction in next year's ethanol blending volumes.
But the drop may come too late to help the dozen or so U.S. refiners who may have already stocked up on RINs to cover their obligations, adding some $2 billion in costs, according to a Reuters review of company earnings.
- Cortege departs to take Mandela's body to lie in state |
- U.S. Mega Millions lottery up to $344 million, fourth biggest in its history
- Uruguay becomes first country to legalize marijuana trade
- UPDATE 1-U.S. Mega Millions lottery up to $344 million, fourth biggest in its history
- Ukrainian riot police clash with protesters in Kiev square