Icahn Bets against Renewables Market He Wants Trump to Overhaul
by Zachary Mider and Jennifer A Dlouhy (Bloomberg) Special adviser to president urges change in EPA rule; ‘It’s bothersome that one guy can control RIN markets’ — Carl Icahn, the billionaire investor and adviser to President Donald Trump, said he’s betting on a decline in the market for renewable-fuel credits that he’s urging the president to overhaul.
Icahn participates in the market through CVR Energy Inc., the oil refiner in which his Icahn Enterprises LP owns an 82 percent stake. CVR is required to buy the credits, known as renewable identification numbers, or RINs, when it makes gasoline. But Icahn said it’s delaying those purchases in a wager that prices will fall. In effect, he’s shorting the market.
“I’m not selling ’em, I’m not buying ’em,” the 81-year-old investor said in an interview at his New York office last week. “Hey, this is what I do in the market. I’m taking a chance.”
Suspicions that Icahn was speculating in the opaque RIN marketplace have been circulating for months. His critics deem it a conflict of interest because Icahn has sought to influence the Environmental Protection Agency’s policy as an unpaid Trump adviser on regulation, often in ways that cause price swings.
Icahn’s campaign got a boost when Trump won the election last year, causing RIN prices to decline. They also dropped when Trump, with input from Icahn, selected Scott Pruitt to lead the EPA, and again when the president-elect announced Icahn’s special adviser role. Yet another decline came on Feb. 28, after Icahn conveyed a proposal to the White House to change the point of obligation and helped persuade an ethanol group to drop its opposition.
RINs tracking 2017 ethanol consumption targets cost about 36 cents apiece as of March 15, data compiled by Bloomberg show. By comparison they fetched 91 cents on Nov. 8, Election Day.
Separate from his trades in the RIN market, Icahn has seen his stake in CVR climb in value since Trump’s election, making him more than $500 million on paper. (Jesse) Lynn, his general counsel, noted that before the recent surge, high RINs prices had knocked more than $2 billion off the shares’ value. READ MORE and MORE (The Hill) and MORE (Bloomberg) and MORE (OilPrice.com)