The dramatic increase in the price of the D6 Renewable Identification Number a decade ago was one of the more spectacular moves in the history of major commodity trading. The spike in the price of RINs — the credits used to certify compliance with the federal Renewable Fuel Standard (RFS) — was brought on by a sudden uptick in demand and stakeholders who lacked sufficiently deep awareness and understanding of the complex RIN credit system. In today’s RBN blog, we use the story of 2013’s “Big Bang” in D6 RIN prices to explain the fundamental mechanism that determines RIN prices, consider whether such a price shock could occur again, and discuss what stakeholders can do to prepare.
The Future of Fuels bi-annual report by RBN's Refined Fuels Analytics provides an in-depth analysis of the U.S. and global refinery industries, focusing on crude oil and fuel market dynamics, supply and demand, alternative fuels, refinery capacities, and price forecasts to help stakeholders navigate the evolving energy landscape.
The 100-fold (10,000%) move in the D6 RIN — from a low of 1 cent in 2012 to more than $1 in July 2013 — meant U.S. refiners and importers, who naturally tend to be short RINs, were suddenly facing unexpected RIN costs totaling $14 billion per year. The price spike, which came to be known as “RINsanity,” occurred because ethanol use, which had been increasing steadily through 2010-12, reached the 10% maximum that can be blended into E10 gasoline (a level also known as the “blend wall”). The government mandate was for 13.8 billion gallons of ethanol to be blended into gasoline when there was room for only 13 billion gallons. It was like pouring cream into your coffee until it reaches the brim, after which no more will fit.
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About the song
“The Big Bang Theory Theme” was written by Ed Robertson and appears as the 13th track on Barenaked Ladies’ third compilation album, Hits from Yesterday & the Day Before. The song was written by Ed Robertson after he was approached by Chuck Lorre and Bill Prady, producers of the TV sitcom “The Big Bang Theory.” They had seen Robertson do a freestyle rap about the origins of the universe at a Barenaked Ladies concert in Los Angeles and thought he was the perfect candidate to write the theme song for their show. The song ended up being played after every opening of the series for its whole 12-year run. It was released as a single in October 2007. In September 2015, band member and co-founder Steven Page sued Robertson, alleging that he wrote 20% of the song and Robertson had kept all the royalties. The case was later settled out of court. Personnel on the record were: Ed Robertson (lead vocals, guitars), Steven Page (guitars, backing vocals), Jim Creegan (bass, backing vocals), Tyler Stewart (drums), and Kevin Hearn (keyboards, backing vocals).
Hits from Yesterday & the Day Before is a greatest hits collection that includes several singles released from Barenaked Ladies between 1997-2010. It was released by Rhino Records in September 2011.
“The Big Bang Theory” was an American hit television sitcom that ran on CBS from September 2007 to May 2019. The show starred Johnny Galecki, Jim Parsons, Kaley Cuoco, Simon Helberg, Kunal Nayyar and Sara Gilbert.
Barenaked Ladies is a Canadian rock band formed in Scarborough, ON, in 1988. They started as a duo with Ed Robertson and Steven Page. By 1990 they had expanded into a quartet. The band has released 13 studio albums, three live albums, four compilation albums, four EPs, and 41 singles and has sold more than 15 million records worldwide. Co-founder Steven Page left the band in 2009. They have had six members since their inception. The band has won two Billboard Music Awards and one World Music Award and are members of the Canadian Music Hall of Fame. Barenaked Ladies continues to record and tour.
