Exclusive: U.S. EPA Grants Biofuels Waiver to Billionaire Icahn's Oil Refinery - Sources

April 30, 2018

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by Jarrett Renshaw and Chris Prentice (Reuters) The U.S. Environmental Protection Agency has granted a financial hardship waiver to an oil refinery owned by billionaire Carl Icahn, a former adviser to President Donald Trump, exempting the Oklahoma facility from requirements under a federal biofuels law, according to two industry sources briefed on the matter.

The waiver enables Icahn’s CVR Energy Inc to avoid tens of millions of dollars in costs related to the U.S. Renewable Fuel Standard (RFS) program.

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But the exemption for CVR’s Wynnewood, Oklahoma, plant prompted fresh criticism from the powerful corn lobby, which already has accused Trump’s EPA of over-using the hardship waiver program in a way that hurts demand for ethanol.

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The EPA has the authority to exempt small refineries of under 75,000 barrels per day from the requirement under the hardship waiver program if they can prove that compliance would cause them “disproportionate financial hardship.”

With the exemption, CVR would not have to turn over the credits related to the Wynnewood facility for 2017, according to the two sources, who spoke on condition of anonymity.

The waiver was granted in recent months but the sources did not say precisely when.

The refinery had been denied the exemptions by Democratic former President Barack Obama’s administration, federal filings showed.

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The Trump administration has fielded a surge of applications from small refiners for the hardship exemptions, driven by a 2017 federal appeals court ruling that the EPA had been using too narrow a definition of “financial hardship” in its waiver assessments under Obama.

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The EPA has said it granted around two dozen waivers for 2017 but has declined to name the recipients, deeming it confidential business information. Under Obama, the EPA granted about eight waivers annually.

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CVR this week reported a $23 million profit in the biofuels credit market in the first quarter of 2018 due to what it called a lower RFS obligation, an unusual return for a refiner that has no biofuel blending facilities.

The company also said it expects its cost of complying with the RFS requirements to fall to $80 million for the entirety of 2018 from a previous estimate of $200 million, and from roughly $249 million in 2017. READ MORE

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