Icahn on Point on RFS
by Anthony Adragna (Politico’s Morning Energy) Carl Icahn was the administration official who called Bob Dinneen, CEO of the Renewable Fuels Association, and told him an executive order changing the Renewable Fuel Standard is on the way, Dinneen told Reuters. Dinneen made waves last week when he agreed to back a change to which companies bear the obligations for complying with the program – a proposal ethanol producers have long opposed – in exchange for a waiver on 15 percent ethanol fuel. Several sources told ME on Friday that White House policy staff are actively discussing what to do with Icahn’s proposed changes.
But it would blow up any attempt at an RFS bill: Reps. John Shimkus (R-Ill.), Bill Flores (R-Texas), and Peter Welch (D-Vt.) have been hosting conversations on broad changes to the RFS , but a memo from the White House directing EPA to change the program could “torpedo” the process, an aide to a Republican on the Energy and Commerce Committee told Pro’s Eric Wolff. “We wouldn’t be able to get away from it,” the staffer said.
‘A foundation of trust’: Shimkus convinced Flores and Welch to hold off on reintroducing their old RFS reform bill, which would have capped the amount of ethanol in the fuel supply, and that helped establish “a foundation of trust” with ethanol groups and corn-state legislators, the aide said. “Because of that, we can’t sit on this. We have to do stuff in the next few weeks to show we’re doing something.”
The three lawmakers and their aides plan to keep talking over the next few weeks, and then put the word out to other House members who may be interested in working on the bill. They hope to introduce a bill after the August recess and get passed out of the House with a wide margin by the end of the year. “We need a big vote in the House so they know we’re serious in the Senate,” the Republican aide said.
Sen. Chuck Grassley‘s thoughts: “Icahn is very good businessman Ok to be friend&advisor to#POTUS But Icahn shld not use closeness to Prez to hurt ethanol when Prez bks same.” READ MORE and MORE (Seeking Alpha) and MORE (Energy.AgWired.com; includes AUDIO) and MORE (Bloomberg) and MORE (Office of Congressman Peter Welch) and MORE (Bloomberg) and MORE (Reuters)
Excerpts from Seeking Alpha: The share prices of major biofuel producers fell in response to Wednesday’s announcement that Congressional Republicans intend to move forward with legislation that could repeal the federal biofuel blending mandate.
The market’s response indicates that investors expect the latest round of legislation to have better odds of success than its predecessors.
While conditions have changed in favor of the mandate’s opponents, a repeal remains unlikely for multiple reasons. READ MORE
Excerpt from Energy.AgWired.com: “We remain opposed to changing the point of obligation because we are concerned that it would undermine the integrity of the program by creating a compliance mechanism that is unworkable, or that in a transition there would be disruption in the marketplace that would hurt the industry,” said Dinneen. “If – and only if – those two concerns can be addressed, we’d be okay with moving the point of obligation.”
If the industry is at the same time able to secure additional opportunities for ethanol, Dinneen says “it would be malpractice not to pursue those opportunities.” In addition, Dinneen says there could be an opportunity to require the EPA to revisit carbon profile modeling to reflect benefits of corn ethanol.
Dinneen says he has been discouraged by the way some in the industry have reacted this week without all the facts. “I believe that once the industry fully appreciates what these discussions have been about and understand the narrow parameters we’re talking about that people will appreciate the value it presents,” he said. READ MORE
Excerpt from Bloomberg: The flurry of meetings and phone calls came after Bloomberg News reported Monday that Icahn had helped broker a compromise with a leading biofuel group on reworking the program. The report led to a surge of more than $100 million in the value of Icahn’s refinery investments. READ MORE