Toledo Refining says government mandate could cost jobs

Published: Sep. 18, 2017 at 3:20 PM EDT
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TOLEDO - (13abc, Action News) - That gas you pump into your car is blended with ethanol.

The corn-based fuel is renewable and cleaner burning and the government requires it be mixed with gas and diesel.

But the Toledo Refining Company in Oregon is not set up to do that blending. So Toledo Refining pays one of the big oil companies to do by buying what's called a *Renewal Identification Number* (RIN) to ensure each gallon is properly blended.

Those *RINS* are expensive; the price skyrocketing from 5 cents per gallon to 85 cents per gallon.

Michael Karlovich, a representative with PBF Energy says, "RINS, they are the problem. Moving the point of obligation is the solution."

So Monday, business, labor and conservation advocates asked President Trump to change the mandate.

Karlovich says Toledo Refinery spent $100-million paying a wholesaler to blend the fuel. PBF wants the wholesaler to absorb that cost, since he considers them the point of obligation.

Otherwise, Karlovich insists, more independent refineries could go out of business.

Karlovich says, "By risking further shutdowns of us refineries we would become more reliant on overseas imports."

A local shutdown would mean 550-people losing their jobs. The refining industry in Toledo and Oregon makes two-thirds of the fuel produced in Ohio. It's economic impact is more than $5 Billion dollars.

But independent refiners say the feds Renewable Fuel Standard, created in 2007 to reduce America's dependence on foreign oil is causing problems.

Some refineries are closing. It happened in the State of Delaware when a refinery had to closed causing lost jobs and devastating the local economy as stores and restaurants went out of business.

The fear is, without a change in the RIN cost issue, northwest Ohio would suffer.

Justin Donley, president of United Steelworkers Local 912, which has 350 members working at the Toledo Refinery, saw the impact the Delaware closing had. He says, "I would hate to see those families suffer like the families I saw out East."

And conservationists say the environment suffers as farmers drain wetlands to grow more corn and add more phosphorous which contributes to algae in Lake Erie.

Frank Szollosi, a consultant with the National Wildlife Federation says, "It hurts water quality, it hurts wildlife, it hurts workers."

And the concern is it will hurt the local economy.

So, there have been some unintended consequences to both the environment and to independent refineries.

Earlier this year, President Trump indicated he was willing to make the change the independents wanted but, so far, that change has not been made.