Guest Commentator: Sharon Watkins, Vice President, Operations Leader, Monroe Energy @MonroeEnergy
How is the renewable fuel standard impacting our region’s refining industry?
As a third-generation refinery worker (my daughter being the fourth), I know first-hand the life-changing opportunities our local refineries provide. For generations, tens of thousands of hard-working men and women in our region have spent their lives working to produce the critical transportation fuels we all rely upon to get us to work, take us on vacation, transport food to grocery stores, and more. Refineries are also critical partners in the production of countless additional products that we use every day like N95 masks, cell phones, and solar panels, to name a few.
Our regional refineries are facing an existential threat caused by the Renewable Fuel Standard (RFS); a well-intentioned federal program that is not operating as Congress intended. The RFS was aimed at reducing our dependency on foreign oil by increasing our usage of domestically-produced, renewable fuels, like ethanol. The RFS requires refiners to demonstrate compliance either by blending renewables themselves or through the purchase of compliance credits. While many large, multi-national oil companies have the ability to blend renewables, many of the smaller, independent refining companies in our region like Monroe Energy and PBF Energy do not. As a result, we must purchase compliance credits in order to satisfy our RFS obligations.
For a variety of reasons, the price of compliance credits over the years has been subject to wild fluctuations, going from just a few pennies per credit to nearly $2.00 apiece earlier this summer. To put this into perspective, at today’s prices, Monroe will have to spend more on RFS compliance than we do on wages, benefits, and capital costs combined. To further illustrate how off-track this program has become, at current prices, compliance costs this year alone represent more than double the purchase price of our entire company. This is clearly unsustainable.
While this is of major concern to the nearly 500 team members I work with, there are tens of thousands of indirect jobs on the line too. We know this because a 2012 PA Department of Labor study indicated that each refinery job supports 18.3 jobs in southeastern Pennsylvania and 61 across the nation.
Monroe and PBF have been waging an advocacy campaign calling on the President for RFS reform. We have received tremendous support from unions, elected officials from both parties, chambers, and many more.
The Chamber supports an advanced, affordable, diversified, low-carbon energy economy. Our Greater Philadelphia Energy Action Team brings together 150+ industry leaders committed to delivering affordable energy solutions that will benefit the current families and businesses living and operating in Greater Philadelphia while attracting new development and growth opportunities.
