Consulting Group to Provide Free List of Verified Biodiesel Plants to Refiners and Importers
|March 30, 2012||Filled under releases, United States||
Little Rock, AR: As a service under its RIN 9000 program, Lee Enterprises Alternative Fuels Consulting is providing free information about biodiesel plants to the U.S. oil industry. Compliance with the renewable fuel standard (RFS2) has always been a service provided to biodiesel producers by Lee Enterprises, and the group has now undertaken the administration of a program allowing RIN Obligated Parties—refiners of gasoline or diesel fuel and importers of those products—access to free information. The group’s CEO Wayne Lee said this latest service was undertaken to help address what he calls a “RIN purchase hesitation” that now appears prevalent in the biodiesel industry.
“RFS2 mandates that these refiners and importers purchase renewable identification numbers to show compliance with RFS2,” Lee said. “Last year the EPA uncovered two isolated instances of people apparently producing RINS without producing any biodiesel. But when the EPA started invalidating some of these RINs, it caused quite a problem for oil companies who then were understandably hesitant to purchase RINs.” This hesitation to purchase has taken a big toll on small producers and Lee speculates that unless something changes, a chain reaction will occur that could result in huge costs for oil companies and biodiesel producers.
“The problem is actually quite simple,” Lee said. “Obligated parties must have RINs and RINs can only be created when biodiesel is produced. So if biodiesel producers can’t sell their RINs and quit producing biodiesel, it will likely cause a significant price increase for those that do exist.”
Lee noted that the very large biodiesel producers seem to be faring better than smaller producers in the sale of RINs. “There seems to be a perception that very large biodiesel companies are ‘safer bets’ in the event that the RINs are ultimately invalidated,” Lee said, adding that this is faulty logic and overlooks the distinction between RIN creation and RIN separation. “I suspect that if there are more RIN problems, they will be in how the RINs are separated. I don’t know of any producers that are creating them improperly—big or small.”
The real question, said Lee, is who will have the liability, not who has the financial capabilities. “I don’t know of anyone that will agree to be liable for RINs they validly created and sold, which are later invalidated due to someone else’s actions outside of their control.”
In an attempt to help alleviate the problem, Lee’s group recently undertook administration of a RIN procedure verification program designed to assist producers and obligated parties. The service includes education, onsite plant inspections, verification of plant procedures, and independent testing of the biodiesel. The group then compiles a comprehensive list of biodiesel producers that have undertaken and successfully completed their review, and provide the list to obligated parties, blenders and brokers. Lee said he knows there are similar, adequate services on the market.
“I think the biggest difference with our program is that we provide the results free to the obligated parties,” Lee said. The decision to provide this information free-of-charge to obligated parties was based on discussions within his group. “It was our feeling that if we were going to charge a plant to undergo this scrutiny, we had an obligation to try and get the information out to as many obligated parties as possible,” he said. Lee added that providing the information free to those who could use it was the easiest way to insure that everyone who wanted the information could get it.
“I don’t know many oil companies that will pass up free information,” Lee said. Preregistration can be done by emailing email@example.com or by visiting the company’s website, www.lee-enterprises.com.
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Lee Enterprises is a biodiesel consulting firm specializing in project oversight & management, feasibility studies, grants, business plans, and assistance with planning, market analysis, site evaluation, feedstock selection and procurement, process technology, evaluation, offtake distribution, RINs, financing, capital budgeting, cold soak, filtration, personnel, and contract negotiations (for feedstock, off-take, transportation, construction, site purchase/lease, and plant management). The group also owns National Business Brokerage, Inc., a full service business brokerage firm specializing in the buying and selling of biodiesel plants. Lee Enterprises, 1503 East Kiehl Ave., Sherwood, AR 72120. (501) 833-8511. www.lee-enterprises.com.
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