What Will Cause Separation of the D4, D5 and D6 RIN Prices, Part 5 (final episode) – The ATTRACTOR RIN System Roadmap
See other blogs in this series: What Will Cause Separation of the D4, D5, and D6 RIN Prices?
- Part 1 – Studying Boundaries with ATTRACTOR
- Part 2 – The Big Bang and the Meiselman model
- Part 3 – D6 RIN Pricing Framework
- Part 4 – The Next Big Move
- Part 5 – The ATTRACTOR RIN System Roadmap
Part 1 of this series shows that Renewable Identification Number (RIN) price movements like the Big Bang are caused by boundaries (like the Blend Wall and the RIN Cliff) that don’t exist in free, uncontrolled markets.
Part 2 shows that these boundaries can be pictured in a graph that plots equations like the Blend Wall equation: (FEG <= 0.1, meaning: the Fraction of Ethanol in Gasoline (FEG) must be less than 0.1).
Part 3 shows the graphical depiction of the Blend Wall framework as a discontinuous curve that caused the D6 RIN to skyrocket 100-fold (that’s 100-fold, not just 100%) in 2013.
Part 4 explains that the Blend Wall framework forms one region of the larger RIN system roadmap that can be used to accurately anticipate future RIN price movements including imminent collisions and free falls like those that have triggered most big RIN price movements in the past.
A network of curves and boundaries
The ATTRACTOR RIN system road map consists of the network of supply curves, demand curves, and boundary lines that form the larger RIN system framework. It is defined by 26 equations and 26 unknowns that were derived from economic fundamentals, published in a PhD dissertation and are solved simultaneously in the ATTRACTOR 2.0 spreadsheet which is available to anyone at negligible cost.
Figure 1 shows the particular section of the road map involved in the Big Bang.
You don’t need to understand the roadmap or it’s mathematics to use ATTRACTOR profitably. Users choose their region of interest, turn the dials and see the responses in that region to see what happens and interpret the meaning.
The responses are often non-intuitive results like crashes and free-falls through trap doors and off cliffs.
Does the Renewable Fuel Standard cost $70 billion or $7 billion/y?
Because of RIN complexity, the roadmap is necessary to reliably quantify RIN price economics.
For example, what is the annual cost of the Renewable Fuel Standard? Is it $70 billion or $7 billion?
The $70 billion price tag that’s been estimated by American Fuel and Petrochemical Manufacturers (AFPM) appears to be based on the cost of buying enough RIN credits to fulfill 1 year’s renewable fuel volume obligations. That is the intuitive, common-sense number and would be correct if the RFS RIN credit system was a simple subsidy system.
But the RIN is not a simple subsidy. It is the most complex environmental credit ever invented. To calculate its cost requires going a level deeper into the economics, which ATTRACTOR does, to give the correct answer of $7 billion.
Because of its complexity, intuitive analysis of RIN economics often leads to spectacularly wrong results.
That is true not only for the program cost. It is also true for quantifying and forecasting impacts on RIN prices, retail gasoline prices and profits of refiners, blenders, and biofuel producers.
The next big move
As a current example of ATTRACTOR’s use, what is most likely to cause the next big move in RIN prices? I believe that will involve the separation of the D4, D5, and D6 RIN prices. Can you answer:
- Why are they priced the same today?
- What circumstances could cause their separation?
- What would be the consequences for RIN, biofuel, gasoline and diesel prices?
ATTRACTOR users have reliable, quantitative answers based on economic fundamentals.
Recommendation
If RIN prices are important to you or your business, you should not be without the ATTRACTOR spreadsheet! Get Hoekstra Research Report 10 and the ATTRACTOR spreadsheet
Get the Attractor spreadsheet, it is included with Hoekstra Research Report 10 and is available to anyone at negligible cost.
George Hoekstra
+1 630 330-8159
Posted in Uncategorized
Hoekstra Trading LLC
Search Posts
Recent Posts
- What Will Cause Separation of the D4, D5 and D6 RIN Prices Part 5 (final)– The ATTRACTOR RIN System Roadmap November 24, 2025
- What Will Cause Separation of the D4, D5, and D6 RIN Prices? Part 4 – The Next Big Move November 17, 2025
- What will cause separation of the D4, D5, and D6 RIN prices? Part 3 – D6 RIN pricing framework November 5, 2025
- What will cause separation of the D4, D5, and D6 RIN prices? Part 2 – The Big Bang and the Meiselman model October 25, 2025
- What will cause separation of the D4, D5, and D6 RIN prices Part 1 – Studying boundaries with ATTRACTOR October 17, 2025
Categories
Categories