Corn ethanol is the mainstay of the nation’s Renewable Fuel Standard, which was created in 2005 when gasoline prices finally rose again, though that price shock, too, proved fleeting. The RFS creates a complex web of targets for both corn ethanol and “advanced biofuels.” To qualify as “advanced,” biofuels such as biodiesel (from sources such as palm oil and recycled cooking oil) and futuristic cellulosic ethanol (from sources such as prairie grass and tree bark) must have a significantly lower greenhouse effect than corn ethanol. The RFS program created both a gradually rising biofuel mandate, and within that mandate, a gradually rising proportion of advanced biofuels (particularly cellulosic ethanol) relative to corn ethanol, such that advanced biofuels are supposed to make up the majority of the mandated volume by 2022.

But the EPA has substantial authority to waive the statutory targets. In practice, that has rendered the RFS unpredictable and arbitrary, in addition to its other fine qualities. And, because cellulosic ethanol has never been able to overcome the technological hurdles it needs to clear to be viable, the EPA has had to waive the overall target every year since 2013.

Each year the EPA dictates the required overall volumes of various biofuels for the following year or two. It then combines those numbers with federal projections of overall fuel consumption to arrive at a percentage amount of ethanol that each gallon of gasoline produced by a refinery must contain. Responding to the government-created demand, ethanol producers swing into action. To create a credit-trading scheme, each new gallon of pure renewable biofuel is assigned a unique renewable identification number. That “RIN” becomes a tradable credit when that gallon of biofuel is blended with enough regular gasoline to meet the RFS.

The scheme creates a major conflict between two of America’s most powerful special-interest groups: oil producers and refineries on the one hand, and corn-ethanol producers on the other. With many hundreds of billions of dollars at stake, the result is tectonic political pressures on the government. The fault line, as it were, is the “blend wall”: how much ethanol can be blended into the nation’s fuel supply without corroding automobile engines or violating the EPA’s own emissions standards for ozone and particulate matter. With the nation’s current automobile fleet, that number turns out to be about 10 percent, which is why virtually all the gasoline you put in your car is at least E10.

But because the EPA’s percentage-volume obligations are set above the effective blend wall for many refiners, many still “owe” the EPA lots of RINs even after blending all the ethanol they reasonably can into their gasoline. So refineries have little choice but to buy RINs from those who have already blended fuel for themselves or someone else, usually purchasing RINs related to biodiesel instead. That leaves a lot of refiners chasing a small number of excess RINs. The resulting scarcity drives up prices, and produces volatility in both the ethanol and biodiesel markets.