The mayors of Toledo and Oregon, along with union and management officials of Toledo Refining Co., said a section of the U.S. Environmental Protection Agency's Renewable Fuel Standard is jeopardizing hundreds of good-paying jobs at the facility. 

They urged President Trump Monday to protect jobs at the refinery on Woodville Road by changing the Renewable Fuel Standard, which makes it more expensive for independent operations like Toledo Refining to stay in business. They said  the Renewable Identification Number system, or RINs, is hurting the refinery and helping its larger competitors.

“[RINs] …  is an unsustainable cost and its anti-competitive structure not only could, but probably will, jeopardize the refinery's operations,” Toledo Mayor Paula Hicks-Hudson said during a news conference on the steps of One Government Center.

“This would be a catastrophic loss to our region … and regions like ours,” she said. “With the stroke of a pen, small refineries can be protected with good jobs.”

The fuel standard, which was enacted in 2005, sought greater use of ethanol and authorized a RIN credit for each gallon of blended gas and ethanol produced. The fuel standard also required refineries to be responsible for collecting and submitting RINs. Toledo Refining officials said that gave rise to an artificial market for RIN trading and purchasing by gasoline blending firms, gas station chains, and large oil firms.

“If a change is not made to this legislation we very well could be at risk of loosing all of those jobs,” said Justin Donley, president of United Steelworkers Local 912.

Mike Karlovich, vice president of communications for PBF Energy, the parent company of Toledo Refining, called the current system “Rin-sanity,” and said it could lead to the closure of other refineries.

“EPA originally intended the RINs to be a simple way to track ethanol from production to blending,” Mr. Karlovich said. “That was it. It was like a serial number. … The Trump administration can change the system .... RINs are the problem. Moving the point of obligation is the solution.”

A Philadelphia-area refinery is the "canary in the RIN coal mine” because they have had layoffs and benefits cuts they directly attributed to RIN costs, he said.

“We do some blending of gasoline and ethanol, but not enough to cover our regulatory obligation. In addition we have to give away a portion of the RIN value to retailers, as I mentioned,” Mr. Karlovich said via email after the news conference. 

RIN values were 1 to 4 cents per gallon from 2008 through 2012 — until market forces and speculators came in to drive prices to between 35 cents and $1.05 a gallon.

As a result Toledo Refining, which doesn't do blending or generate RINS but is still responsible for submitting RIN credits, has to buy them. In 2016, it spent $110 million on RINs, or 66 percent of its capital budget, Scott Hayes, manager of health, safety, environmental and governmental affairs for Toledo Refining, said after the news conference.

“Not a dime goes to the EPA, the tax base, or research into biofuels,” Mr. Hayes said.

Large integrated oil firms own blending operations but independent operators like Toledo Refining don't blend and suffer because of blenders or people that speculate in the RINs business, Mr. Hayes said.

Toledo Refining produces 170,000 barrels a day and employs 550 people.

“They are on the other side of the issue because they have the ability to blend it, but small guys like us don't have that ability to blend,” he said. “We are paying our competitors to put us out of business.”

A representative of BP America, which party owns the BP-Husky refinery in Oregon, could not be reached for comment. In the past, the company said that refinery can produce 160,000 barrels a day.

Jamal Kheiry, spokesman for Findlay-based Marathon Petroleum Corp., emailed a statement to The Blade in response to questions on the Renewable Fuel Standard.  

“We purchase RINs to satisfy a portion of our [Renewable Fuel Standard] compliance,” the email said. “Our expenses associated with purchased RINs were $288 million in 2016, $212 million in 2015 and $141 million in 2014.”

Marathon Petroleum has seven refineries, the closest to Toledo is in Detroit, which produces 140,000 barrels a day. One of its bigger refineries in Texas refines 460,000 barrels a day.

Husky Energy Co. has a Lima, Ohio refinery, producing about 155,000 barrels of petroleum products a day.

Contact Ignazio Messina at imessina@theblade.com, 419-724-6171, or on Twitter @IgnazioMessina.

First Published September 18, 2017, 3:33 p.m.