For the world of renewable fuels — the only significant carbon legislation on the books, it really doesn’t matter what the oil price is. The RFS creates a separate market for renewable fuels and they compete against each other as alternatives within that market.
It’s not unheard of. California, for example, has a separate market, anyway, because of the requirement to produce reformulated gasoline, a unique type of anti-smog fuel. To use another example, Colorado and Wyoming utilize 85-octane regular unleaded fuel, instead of 87-octane as we see elsewhere around the country. There are distinct fuels markets for different reasons, and the renewable fuels market is one of them.