Jeff Broin
PHOENIX, Ariz. — The Environmental Protection Agency decided to propose reducing the Renewable Fuel Standard because officials became convinced that the rising cost of RINS could lead to an increase in the cost of gasoline, Jeff Broin, founder and executive chairman of POET, the ethanol building and management company, and a founder of Growth Energy, said here today.

When the price of RINS — the renewable identification numbers that are used for tracking production of biofuels — went up last year, “our friends in the oil industry created a scare campaign, and there was a fear about what that does politically in Washington in elections,” Broin said in an interview on the sidelines of the Growth Energy leadership conference.

RINS, which have since gone down in price, should not raise the price of gasoline, he said, because they are simply traded among oil companies.

Growth Energy and other pro-renewable fuels groups have mounted a vigorous effort during EPA’s comment period to convince officials that their proposal is is misguided.

Broin acknowledged that EPA had to reduce the volumetric requirements for cellulosic ethanol because the obligations were set before the industry developed. But he said that the corn-based ethanol industry could meet expectations under the standards.

The oil industry and auto interests have said, however, that the higher blends may cause problems in vehicles.

Broin said he hopes that EPA “will realize how serious this is for all of rural America. We are hopeful that EPA will do the right thing and raise the numbers back up to where they should be.”

The short-term impact of the EPA proposal, he said, has been to reduce the pressure on the oil industry to build the infrastructure to sell blends of ethanol higher than 10 percent.

“The great thing about our product,” Broin said, is that it has moved from prices being below the cost of production to profitability, and that it cleans up the environment and removes octane components from the gasoline supply that cause health problems.

If EPA finalizes the rule, Broin said, “the agriculture economy is going to be in a world of hurt.”

If the ethanol industry is allowed to be developed to its full potential and E30 gasoline comes into use, gasoline prices could fall to $2 per gallon in 15 years, he said.

Although Broin founded Growth Energy, he said the perceptions that it is his organization and that he funds it are wrong and could be advanced by politically motivated people.

Today, he said, other ethanol companies, seed companies, farm equipment companies and other vendors “that have a common goal of seeing ethanol succeed” provide much of the funding for the organization. Growth Energy has also started an individual membership category with $15 per year dues that has about 1,000 members.