What a crazy year this has been for ethanol producers and the refiners responsible for blending it into gasoline. After barely hovering above zero for much of the past few years, ethanol renewable identification numbers, or RINs, shot up to $1.00 per gallon in mid-February before pulling back to half of that in March. Even Valero (NYSE:VLO), a major refiner and ethanol producer, had sharp words criticizing the volatility. What the heck happened?

RINs are created with each lot of biofuels produced and act as a way for the industry to track production. They are normally sold with the corresponding amount of biofuels, but can be sold on secondary markets without a physical volume to back it up. Speculation by third parties and fear of running into the 10% ethanol blend wall in 2013 and 2014 caused prices to spike. The volatility may continue for the medium term, but investors may be able to find solace in the country's leading biodiesel producer Renewable Energy Group (NASDAQ:REGI). Fool contributor Maxx Chatsko explains why in the following video.