Icahn-Backed Refiner Saves $189 Million on EPA’s Biofuel Tweaks

Business News/Analysis, Environmental Protection Agency, Federal Agency/Executive Branch, Federal Litigation, Federal Regulation, Opinions, Policy, White House

February 26, 2019

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by Mario Parker and Jennifer A. Dlouhy (Bloomberg) CVR Energy Inc., backed by billionaire investor Carl Icahn, saved $189 million under the U.S. biofuels mandate last year. That’s largely thanks to a campaign he helped ignite to lower costs for compliance.

CVR Energy, an independent oil refiner majority owned by Icahn Enterprises LP, spent $60 million on biofuel credits necessary to fulfill the mandate in 2018 — a 76 percent drop from the company’s $249 million tab in 2017, a Feb. 21 regulatory filing with the U.S. Securities and Exchange Commission shows. Other oil refiners also have highlighted a decline in prices for the credits in quarterly filings and conference calls.

Icahn was for a time the public face of a push to overhaul the Renewable Fuel Standard.

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The debate over reform has continued under President Donald Trump’s administration as the EPA has pursued revamps to the program. In response to oil companies complaining about high costs, the agency has also issued waivers exempting some small refineries from the biofuel quotas.

As a result, prices for the RINs have tumbled, saving money for independent refiners such as CVR.

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Last fall, Trump ordered the EPA to allow year-round sales of higher blends of ethanol. As part of that effort, the administration is planning to propose a major overhaul of the RINs trading market in coming weeks, people familiar with the matter have said. The agency also is working on a broad revamp of the Renewable Fuel Standard program, which includes resetting the annual biofuel blending targets Congress laid out more than a decade ago.

In its Feb. 21 filing, CVR reiterated that federal investigators have issued subpoenas for information on Icahn’s efforts to change biofuel policy while he served as a special regulatory adviser to Trump — an unpaid role that ended by August 2017. The subpoenas were initially disclosed in a November 2017 filing. READ MORE

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