Replies to post #607 on Northern Tier Energy LP (NTI)

[bzusa]

Thanks for that Pete
Here's my best interpretation of the RIN situation (certainly not RENT).
Renewable Identification Numbers (RINs)
The gov mandates that more ethanol be put into gasoline than people will buy (E15), otherwise NTI could buy ethanol and add it to the gasoline they sell - which actually increases refinery profits.
Ethanol is a bit cheaper than RBOB gasoline.
To show that NTI has virtually used enough ethanol they have to buy certificates that demonstrate this virtual use.
The price of these certificates (RINs) has escalated over the last 6 months as the need to show use of more ethanol has increased.
While the need to buy RINs is certainly not cost efficient (paying for nothing), at least NTI can actually use some ethanol through their service stations, which puts them in a better position than most refiners.

[jugs]

Rents is probably the wrong word, possibly the result of speech-to-text transcription without adequate proofing. Obviously "RINS" is the correct term here---reverencing credits.

Jugs