Total to hike Texas plant fuel exports amid costly ethanol credits

Reuters

By Cezary Podkul

NEW YORK, Oct 11 (Reuters) - French oil major Total will boost distillate exports and increasing the shareof jet fuel it produces at its 174,00 barrel per day PortArthur, Texas, refinery to ease a $100 million hit from risingethanol credit costs, a company spokeswoman said on Friday.

Joining a list of refiners who have put a public price onthe cost of complying with a landmark 2007 U.S. biofuel law,Total has been forced to buy renewable identification numbers(RINs) this year to meet its obligation because it does notblend any fuel itself, the spokeswoman said.

"The increase in (RIN) price is indeed translated into anadditional cost for the company (around $100 million) and as aconsequence, Total plans to increase exports and jet (fuel)production" because they are not subject to RIN requirements,the Total spokeswoman said in an emailed response to questions.

She declined to comment on figures for exports or jet fuelproduction.

The spokeswoman also said Total is working to improvelogistics for exporting gasoline at the refinery in Port Arthur,its only plant in the United States.

Ethanol RINs, which in previous years had rarely traded formore than a few pennies, surged this summer to a record of about$1.45 each, with refiners and traders scrambling to stock up oncredits for fear that they may not be able to blend enoughethanol into the U.S. gasoline pool to meet ambitious blendingtargets.

Prices have slumped since then, reaching around 30 cents onFriday, partly on signs that the Environmental Protection Agency(EPA) will make it easier for refiners to meet their blendingmandate next year. A leaked EPA proposal obtained by Reutersshowed a surprisingly deep reduction in next year's ethanolblending volumes.

But the drop may come too late to help the dozen or so U.S.refiners who may have already stocked up on RINs to cover theirobligations, adding some $2 billion in costs, according to aReuters review of company earnings.

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