The Environmental Protection Agency joined forces with the government's top financial cop to start snooping around refiners' buying and trading of renewable fuel credits, and those trying to game the market to drive up prices.

The EPA signed an agreement Thursday with the Commodity Futures Trading Commission to investigate the market for "renewable identification numbers," or RIN credits. The RINs are bought, sold and traded like commodities among refiners to comply with EPA's renewable fuel standard, the RFS, which requires refiners to blend ethanol, biodiesel and other renewable fuels in the nation's gasoline and diesel supplies.

In recent years, shortages of RINs had driven up their prices several fold, outraging those seeking to comply with the RFS by arguing that it had become increasingly expensive and cost-prohibitive. A separate RIN-type for biodiesel was part of a number of fraud schemes in which a handful of companies managed to create havoc in the fuels market, cheating millions of dollars from nearly all refiners in the country who bought the fake credits thinking they were real.

CFTC's "review and analysis" of RIN information under the new joint-agency agreement "will assist the EPA in protecting the public by providing advice to EPA on conducting possible investigation into potential fraud, market abuse, or other violations relating to the generation of, and trading in, Renewable Identification Numbers ... and the trade in renewable fuels subject to the EPA's regulation or oversight."

The oil and gas industry had argued that the skyrocketing prices experienced in the ethanol RIN market a few years ago was due to the nation reaching the limit in blending the corn-based fuel in gasoline at 10 percent blend levels. Going any higher than 10 percent would cause engine and vehicle damage, the industry argued.

The oil industry and refiners have since called on Congress to reform or repeal the RFS in order to keep EPA from breaching the ethanol limit, or "blend wall." The industry says blending ethanol at levels that exceed the blend wall would drive up RIN prices, and raise the cost of gasoline and diesel for consumers by a significant amount.

EPA has tried to address the blend wall concerns by cutting the required amounts of ethanol below the levels set by Congress, which stoked the ire of the ethanol industry. EPA has struggled for years to try to fix the many problems that plague the RFS, and is being sued in federal appeals court by both the oil industry and the renewable fuel industry on separate grounds.

Nevertheless, the ethanol industry praised Thursday's collaboration between CFTC and EPA, saying the industry has been calling for the action for years.

"We are encouraged to see that EPA is coordinating and cooperating with CFTC to identify methods for improving the transparency and efficiency of the RIN market," said Bob Dinneen, president and CEO of the Renewable Fuels Association, the lead trade group for the ethanol industry. "For several years, RFA, members of Congress, and other stakeholders with an interest in the success of the RFS have been requesting that EPA coordinate with CFTC to take steps to prevent manipulation and increase transparency in the RIN market."

"Through this agreement, we believe CFTC will provide valuable expertise and insight that will improve the functionality and clarity of the RIN system for all market participants and the public," Dinneen said.

RFA Senior Vice President Geoff Cooper told the Washington Examiner that the ethanol industry doesn't completely agree that the "blend wall" drove up the cost of RINs in previous years. In fact, he says no one is certain what drove up the prices. It was likely a variety of factors, including hoarding of the credits by some refiners and third party investors looking to maximize financial gain.

"Our own analysis suggests it was a combination of factors, including speculation by third parties with no compliance obligation, hoarding by some obligated parties, a shortfall in ethanol production due to the 2012 drought, and the perceived lack of infrastructure to distribute volumes above the so-called 'blend wall,'" Cooper said.

"But that's why this [agreement] with CFTC is so important, introducing more transparency and integrity into the RIN market will help affected stakeholders and the public understand exactly what factors are driving RIN prices and whether certain participants in the marketplace are exerting undue influence."

Others are far more blunt in their assessment of what caused the price spikes.

"The publicly reported price of RINs was driven up entirely by speculative behavior among the refiners," said Paul Winters, spokesman for the Biotechnology Industry Organization, a principal supporter of the RFS.