CREW requests investigation into industry influence on RFS

By Citizens for Responsibility and Ethics | May 22, 2014

Citizens for Responsibility and Ethics in Washington has requested U.S. EPA Inspector General Arthur Elkins investigate whether the Carlyle Group and Delta Airlines improperly influenced the EPA’s proposed renewable fuel standards (RFS). 

The proposed standards actually lower renewable fuel amounts that must be blended into transportation fuel supplies.  Carlyle and Delta lobbied heavily for this reduction and would benefit financially from the change.

 “The EPA, which has never previously reduced renewable fuel standards, seems to have done so now as a result of congressional and White House intervention,” CREW Executive Director Melanie Sloan said.

Each year, the EPA sets the RFS for how much renewable fuel must be blended into transportation fuel supplies.  The most recent standards were proposed in November 2013 and are expected to be finalized this summer.

Carlyle — a well-connected investment firm based in Washington, D.C. — and airline giant Delta both acquired oil refineries in or near Philadelphia in 2012. Both refineries faced increased operating costs by early 2013 due to rising costs of credits used by refineries that fail to blend adequate amounts of ethanol to achieve RFS compliance.  As Reuters reported, Carlyle and Delta responded by pressing lawmakers, White House officials, and regulators to weaken the RFS.

At the companies’ behest, Reps. Robert Brady, D-Pa., and Patrick Meehan, R-Pa., lobbied administration officials, including Vice President Joe Biden, White House Chief of Staff Denis McDonough, White House economic adviser Ronald Minsk, and National Economic Council director Gene Sperling.  While the administration claims it listened to all sides of the debate, the proposed standards seem to have been heavily influenced by Carlyle, Delta, and other oil refinery owners.

“Given that the agency’s decision to lower renewable fuel standards is an unprecedented break from past practices, the public has a right to know whether this decision was based on policy or politics. The EPA inspector general should immediately investigate, ” Ms. Sloan said.

Read CREW's letter to the EPA Inspector General regarding renewable fuel standards