Posts by Hoekstra Trading LLC
Tier 3 sulfur credit price doubles in May
Demand for Tier 3 sulfur credits caused the price to double in May. The best offer is now triple the first quarter 2022 level. This, and the current surge in octane value to record heights, were predicted in Chapter 25 from Gasoline Desulfurization for Tier 3 Compliance as signs the octane/sulfur squeeze is happening. Every…
Read MoreWatch the coming spike in Tier 3 sulfur credits
Tier 2 sulfur credits spiked 50-fold, then D6 RINs spiked 50-fold, now the Tier 3 sulfur credit spike is imminent. Don’t get caught panic buying after the credits spike. Every refining executive should have a comprehensive understanding of the technical, regulatory, and economic aspects of Tier 3 gasoline, the sulfur credit program and how they…
Read MoreThe Tier 3 investments that never occurred
See this excerpt from Gasoline Desulfurization for Tier 3 Compliance on $3 billion of capital investments needed to produce Tier 3 gasoline reliably and profitably. excerpt on Tier 3 investments Every refining executive should have a comprehensive understanding of the technical, regulatory, and economic aspects of Tier 3 gasoline, the sulfur credit program and how…
Read MoreWhy are gasoline prices so high?
We don’t have a shortage of gasoline. We have a shortage of marketable gasoline. This chart, from an Argus Media article shows the price differential between marketable (Tier 3) gasoline and unmarketable gasoline: The spike is an indicator of octane value which has skyrocketed this year taking the price of gasoline with it. The underlying…
Read MoreUS refiners face gasoline sulfur/octane pinch with Tier 3
Two key findings from Hoekstra Trading’s 3-year research project on Tier 3 (10 ppm sulfur) gasoline were: The first conclusion came from extensive pilot plant and field tests on commercial desulfurizers which showed octane loss on fluid catalytic cracking (FCC) gasoline desulfurizers for Tier 3 is typically 2.5 octane numbers versus the industry-expected 0.5 octane…
Read MoreFuel economics – Why do Renewable Identification Number (RIN) costs pass through to fuel price?
A 9-year, multi-billion dollar legal dispute between EPA and refiners is rooted in disagreements about fuel economics. One of the roots is the RIN pass-through theory. EPA says that, with the RIN credit system, market forces raise the equilibrium price of refined fuel blendstocks by an amount that offsets refiners’ cost for buying RINs. The…
Read MoreRefiners rebuffed again on RIN price passthrough part 3 – does this wipe out 1/3 of small refiners’ value?
In Thursday’s denial of 36 petitions for small refinery exemptions to their Renewable Fuel Standard (RFS) obligations for the 2018 compliance year, EPA states it has determined that any small refinery seeking an exemption from its RFS obligations must 1) demonstrate that any disproportionate economic hardship it claims to experience is caused by compliance with…
Read MoreFor making clean fuels, 14 US refineries bite the dust
By clean fuels here, I mean conventional (not renewable) clean gasoline and clean diesel that meet clean fuel specifications for sale in the US. I count 14 US refineries on the casualty list. These 8 have converted (fully or partly) to renewable diesel in 2021 and 2022: These 6 have been closed or idled for…
Read MoreRefiners rebuffed again on RIN price pass-through – part 2
Yesterday, EPA denied 36 petitions from refiners seeking small refinery exemptions (SRE) to their Renewable Fuel Standard (RFS) obligations for the 2018 compliance year. The denial repeats and builds on the large of body of evidence showing small refiners do not face disproportionate economic hardship as a result of their RFS obligations (see this blog…
Read MoreWhy are (were?) we importing oil from Russia?
In 2021, the US imported 700,000 barrels per day (BPD) of crude and refined products from Russia. Of this, 220,000 bpd are (were?) being used by Valero as feedstocks at their refineries in Norco LA. and Port Arthur Texas. These Russian barrels are classified as products, not crude oil. My conjecture is they serve as…
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