Oil refineries in Southeast Pennsylvania have been seeing a comeback over the last year. But a federal law requiring American refiners to mix more corn-based ethanol into gasoline may be hurting their profit margins as well as the environment.
Next time you’re at the gas pump, you might notice a sign that says your fuel has ethanol in it. Ethanol is an alcohol made from corn that produces less carbon dioxide than gasoline when it burns.
For months, U.S. Sen. Pat Toomey of Pennsylvania has been pushing to repeal the law or at least cut back on the amount of ethanol the federal government requires refiners to blend into their supplies.
“First of all, the original idea is this would be good for the environment. Except that everyone’s discovered that it’s counter-productive,” he said during a summer visit to a refinery in Delaware County.
A new Associated Press investigation has found that growing more and more corn to meet the increased demand for ethanol may be increasing greenhouse gas emissions.
Refineries can pay to opt out of the program by buying credits. The federal government increased the ethanol mandate this year from from 13.2 billion gallons in 2012 to 13.8 gallons, which also drove up credit prices. Toomey said it’s putting refineries like the one in Marcus Hook in the red.
“It costs them more to comply with this government mandate than all of the labor and all of the jobs that they have on this facility,” he said. “This makes no sense and as a result, this refinery is not profitable.”
Toomey hopes there will be some relief when the federal government announces next year’s ethanol mandate sometime this week.