Biofuel industry criticizes EPA handout to Icahn

By Erin Voegele | April 30, 2018

Supporters of the biofuels industry are speaking out to condemn reports that the U.S. EPA Administrator Scott Pruitt granted an undisclosed small refiner “hardship” waiver to a refinery owned by billionaire Carl Icahn. The waiver allows the company to bypass its renewable volume obligations (RVOs) under the Renewable Fuel Standard.

Growth Energy criticized the relationship between Icahn and Pruitt. “Carl Icahn interviewed Scott Pruitt for the job, and now Icahn stands to make millions more from a secret EPA handout,” said Emily Skor, CEO of Growth Energy. “This is just one more example of the EPA taking money out of the pockets of American farmers and undermining President Trump’s promises to rural communities,”  The EPA is giving refineries everything they want, at the expense of rural families, while refusing to move forward on the President’s pledge to lift barriers against year-round sales of E15.

“Congress and the White House need to rein in EPA and return the agency to serving the president’s promised agenda, including growth in biofuel production and rural job creation,” Skor said.

Sen. Chuck Grassley, R-Iowa, is also speaking out against the EPA’s misuse of RFS waivers. “President Trump committed to a 15 billion gallon annual volume obligation for ethanol under the Renewable Fuel Standard,” Grassley said. “Administrator Pruitt is breaking that commitment. By handing out ‘hardship’ waivers to highly profitable, big oil refining companies, Administrator Pruitt is undermining the integrity of the Renewable Fuel Standard. He’s also breaking his own promise he made to me and several other senators to support the spirit of the law. Hundreds of millions—and in some cases billions—of dollars in profits isn’t my definition of ‘hardship.’ President Trump promised to support home-grown biofuels, and Administrator Pruitt is breaking that promise.”

The Advanced Biofuels Business Council noted Pruitt’s actions undermine the promises Trump made to the biofuels industry. “This isn’t the first time Carl Icahn has made a huge profit gambling on federal handouts from Scott Pruitt,” said Brooke Coleman, executive director of the ABBC. “It’s just another example of how these refiners have cooked up a fictional cost under the RFS to line their pockets at the expense of American-made biofuels and rural jobs. They would be gloating about their waiver under any other EPA administrator, but disclosure now bites the hand that feeds them and would only reinforce that Pruitt has gone far beyond the law to undermine President Trump’s promises. This one's going to be hard for Pruitt to explain.”

The National Farmers Union stressed that the waiver harms rural America. “When EPA hands out ‘financial hardship waivers’ to billionaires and their oil refining operations, unfortunately it’s family farmers and their rural communities who end up footing the bill,” said Roger Johnson, president of the NFU. “Administrator Pruitt’s agency continues to proactively undermine market share for American grown biofuels, which forces farm prices even lower. This is particularly disturbing given recent projections that a majority of farmers will earn negative net farm income this year. The administration must stop an EPA that appears determined to undercut the RFS, despite how much its actions conflict with Congress’ intent for the law and the President’s promises to promote it.”

Last year, Icahn was under scrutiny for his actions in relation to the RFS and the market for renewable identification numbers (RINs).In May 2017, a group of senators sent a letter to the U.S. Commodities Futures Trading Commission, the U.S. Securities and Exchange Commission, and the EPA calling for an investigation of Icahn for potential insider trading, market manipulation and other securities and commodities law violations related to the market for RINs.  

In June 2017, a separate group of senators wrote to Pruitt requesting any information the agency had on Icahn’s role in crafting policy and regulations at the EPA, particularly with regard to the RFS. The senators’ concerns stemmed from Icahn’s role as a “special advisor to the president on issues related to regulatory reform.”

That same month, democratic leaders in the House Energy and Commerce Committee sent a letter to Pruitt asking him to detail policies and procedures the agency has put in place to prevent Icahn from influencing the EPA’s position on the RFS for personal financial gain.