The problem doesn't end there. If you are a refiner trying either blending more renewable fuels into your gasoline or scrambling to buy ever-more expensive RINs, you have one last choice off this unprofitable treadmill: You can export your product overseas, outside the requirements and mandates of EPA RFS programs.
Of course, increased export of domestic gasoline will squeeze domestic supply, also causing a price increase -- perhaps as much as 50 cents a gallon by July. This is a very likely outcome should this EPA program not face reform or repeal in the next several months.
With gas prices such a lightning rod issue in the last election, it is likely that Washington will be forced to rethink the EPA program, perhaps changing the volume requirements to one that is based upon percentage.
Or, even better, maybe they'll rethink entirely the entire idea of "food as fuel." Corn and sugar haven't been the right answer to the question of "renewable" fuels. Perhaps this self-inflicted gas price spike will force Washington to figure out another way.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.