With apologies to Winston Churchill who coined the phrase “…a riddle, wrapped in a mystery, inside an enigma,” it seems Small Refinery Exemptions (SREs) are becoming a handout, wrapped in a con, inside a shakedown. At very least, they’re a far cry from why the SRE was created in the first place.
When Congress built the Renewable Fuel Standard (RFS), small refiners said they needed time. They said complying with the program would require massive investments. New infrastructure. New blending systems. New logistics. New everything.
Forget the fact rubes like me in flyover country had been slapping up ethanol splash-blending facilities near fuel terminals two decades before the RFS was conceived… But OK. The poor challenged billion-gallon-a-year or less refiners got an extra three years to start complying with the RFS – and SREs if they needed more time to figure it out.
But they already had figured it out and were selling pre-blended E10 in markets where ethanol was available long before their free pass expired. And the RFS itself ramped volumes up gradually to reflect time it could take to expand ethanol production and get product to places for blending. Today, with ethanol part of virtually every gallon of gasoline small refiners sell, the base lie is no longer “We need time and capital to blend ethanol,” it’s “If we have to comply with the RFS, we’ll go broke.”
Tough to say with a straight face, as even small refiners are reporting huge margins and record profits, including significant income directly associated with the RINs they get selling the product they claim causes them disproportionate economic hardship. HF Sinclair reported $313 million in profits from waivers granted by EPA in the 4th quarter of 2025 alone! They, and other refiners like them, are no longer asking to be released from their obligation to blend renewable fuels - because they're reaping huge financial benefits from blending. No, they’re now demanding exemption from the obligation of complying with the program that makes the RIN system work and hands them huge profits when they game the system.
What’s worse, these energy welfare kings and the politicians enabling them are using permanent, year-round E15 as their bargaining chip. Consumers could have a lower-cost, higher-octane fuel choice all year. Retailers could add E15 to their product slate without worrying every year whether they’ll have to pull the product in June. Farmers could gain a more reliable domestic market. The fuel supply could have another affordable option when gasoline markets tighten.
But only if we agree small refiners can turn the SRE safety net into their hammock. They’ve tied year-round E15 passage to more SRE concessions and more ways to avoid the RFS obligations everyone else carries, while guaranteeing themselves billions in annual RIN entitlements.
SREs were supposed to be a temporary bridge to higher ethanol blends - not a permanent toll booth. It's time to stop pretending small refiners see it as anything else and quit letting them hold up year-round E15.