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U.S. Senators Urge President Trump to Maintain Point of Obligation

The senators outlined the detrimental effects of changing the point of obligation under the Renewable Fuel Standard from refiners to blenders, marketers or retailers.
March 20, 2017

​WASHINGTON – Last week, U.S. Senators Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) led 23 senators in a bipartisan letter urging President Trump to maintain the point of obligation under the Renewable Fuel Standard (RFS) and reject petitions to  upend the current successful system.

“We believe such changes are unwarranted and indefensible,” the senators wrote to Trump. “We appreciate the commitment you have made to support the RFS. We strongly urge you to steer clear of administrative changes to the policy that would undermine the program and run contrary to your goals of promoting domestic energy independence and more choices at the pump. We look forward to working with you to ensure the RFS continues to provide the stability and predictability that is creating jobs and economic growth across the country.”

The senators outlined the detrimental effects of changing the point of obligation from refiners to blenders, marketers or retailers, as one prominent refiner is suggesting. Shifting the point of obligation would give refiners little incentive to produce necessary fuel blends, making it difficult for downstream entities to comply, the senators wrote.

Changing the point of obligation also would “result in a massive, costly, time-consuming shift in compliance” because small businesses, especially in rural areas, lack the resources needed to comply. The program administration would become complicated and “unnecessarily result in significant uncertainty and market disruptions,” the senators wrote.

Such a change is widely opposed—by fuel marketers, retailers, truck stop operators, petroleum producers and renewable fuel producers—because of the added complexity and the undermining of investments that businesses have made to comply, the senators wrote. 

“The overwhelming majority of transportation fuel market participants oppose any change to the point of obligation because it would cause massive disruptions and could lead to higher prices for consumers,” the letter states.

During the recent NACS Government Relations Conference, convenience and fuel retail industry stakeholders asked their senators to support and sign this letter, and NACS appreciates the strong bipartisan support on this important issue. The senators’ letter is available here.