By Rep. Greg Rothman
While everything in Pennsylvania is inflated in price this year, the cost of home heating oil has risen at an even more worrying rate than most consumer staples. What started at about $3.20 a gallon for local residential properties has now surged to over $6 in some parts of the state.
That’s a 80+ percent price increase for our hard-working families, and it doesn’t even mark the end of the story. The United States Energy Information Agency recently warned that prices are likely to skyrocket by winter – a worrying prospect, to say the least, given that many in our communities are already struggling or unable to pay their energy bills to pay.
To help those who are struggling to pay for their home heating, the Pennsylvania Department of Human Services recently announced that it is accepting applications for its Energy Assistance Program for Low-Income Households.
While this program may help some Pennsylvanians who are faced with the short-term decision to heat their homes or put groceries in their refrigerators, it’s a pavement solution that ultimately won’t solve the root problem — the real reason high heating oil prices.
Longtime supporters of Pennsylvania’s energy woes know that much of the blame lies with the government’s mismanaged use of renewable identification numbers (RINs).
For those who don’t know, the government mandates that American refiners blend ethanol (a renewable fuel) into their production. When refiners do this, the government assigns a RIN number (a serial number) to the gallon of biofuel — and each refinery must have a certain number of RINs in order to comply with the country’s renewable energy laws.
But it is extremely difficult, costly and in many cases impossible for local refiners to blend fuel. As a result, most refiners — particularly those in Pennsylvania — buy excess RINs credits from big oil conglomerates (big oil companies who, unlike them, have the financial resources to blend fuel) to keep RINs compliant with the government.
The high demand for these loans from our local refiners has effectively created a bidding war for them. What used to cost just pennies now costs well over $1 per credit. That’s bad news, considering the price of RINs directly affects the ability of Pennsylvanians to heat their homes and the ability of our state’s refiners to stay in business.
Although years ago Gov. Tom Wolf and members of the Pennsylvania congressional delegation warned the White House about this issue and urged it to find ways to lower the price of RINs, the problem persists, and RIN prices are now at or near all-time high.
This unsustainable RINs program has resulted in many of my friends and constituents losing their jobs and their ability to pay their heating bills. Without reforms, the government cannot continue. Federal mandates should never cause our state to lose jobs and basic needs like warmth in winter.
Now it’s time for the federal government to consider meaningful legislative changes that will lower the price of these loans. Only then will there be light at the end of this tunnel for Pennsylvania families.
State Representative Greg Rothman, the Senator-elect for the 34th District of Pennsylvania, represents the 87th Legislative District in the Pennsylvania House of Representatives