Message Posted: Sep 7, 2013 10:32:57 AM
"For instance, Delek Refining Ltd., said in its filing with the Securities and Exchange Commission that the Tyler, Texas-based company anticipates that it “will internally generate most, if not all, the RINs required to meet the obligations of our refineries” in 2013. The company anticipates ” net surplus of biodiesel RINs that may be sold to purchase other RIN categories, if necessary.”
Marathon Petroleum Corp. said that while its cost of purchasing RINs jumped to $107 million in the first six months of 2013, compared to $66 million during the same time frame last year, it was able to cash in on selling some of the credits. The company said other income increased $22 million during the first six months this year over the same time period last year “primarily due to increases in sales of renewable identification numbers and dividends received from pipeline affiliates.”
Murphy Oil Corp. said its favorable second quarter profit of $77.9 million “was primarily due to stronger results for the company’s two ethanol production facilities, . . . coupled with higher values realized for ethanol (renewable) credits sold in the current year.”
Some companies obligated to comply with the renewable fuel standard are particularly exposed when RIN prices climb. The biggest hit is for merchant refiners who sell their products into the wholesale market without owning blending infrastructure and mixing in the biofuels themselves — are particularly exposed when RIN prices climb.
For instance, even though San Antonio-based Valero Energy Corp. is the nation’s third-largest ethanol producer, the tradable RINs associated with each gallon of biofuel they make stay attached with that fuel even when it is sold to blenders. Because Valero doesn’t blend the majority of its own product, it can’t take advantage of those credits, though it still can price its ethanol to reflect the added value of the embedded RIN in each gallon."
Renewable fuel pays of for some refiners