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Democratic Senators Want Answers on Icahn RFS Waiver

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A group of Democratic senators have joined the fray in raising questions about EPA's issuance of small refiner waivers from the Renewable Fuel Standard during the past two years, asking an energy billionaire investor Carl Icahn and EPA Administrator Scott Pruitt for information about the waiver granted to Icahn's company, CVR Energy.

A number of other senators and media outlets including DTN already have been denied access to information about exactly which companies received more than 40 waivers issued. Some agency leaks to the media suggest a number of those companies receiving hardship waivers include oil giants that have reported billions of dollars in profits, including CVR.

In a letter to Icahn, Sens. Elizabeth Warren, Massachusetts; Sheldon Whitehouse, Rhode Island; Sherrod Brown, Ohio; Tammy Duckworth, Illinois; Amy Klobuchar, Minnesota; Tammy Baldwin, Wisconsin; and Tina Smith, Minnesota, remind Icahn of his connections to President Donald Trump's administration in the early days of his presidency.

"You resigned from your White House position as an adviser to President Trump last August after reports surfaced that you were actively working to change RFS regulations to benefit CVR, a company in which you currently serve as chairman of the board and own a controlling interest," the letter said. "You 'made a massive bet in 2016' that the price of the renewable fuel credits would drop. You then, as an unpaid adviser to President Trump, recommended personnel and policies that did in fact cause the price of these credits to drop. The net result was an 'impossible' 'rare profit' on the credits, 'a $50 million turnaround' from your initial investment. The justice department has opened an investigation into your activities in the RFS market during your tenure at the White House."

After having reminded Icahn of those details, the senators then ask him to describe the timing of the RFS waiver process, the number of times CVR applied for exemptions and the number of approval received in the past five years, to identify any communications Icahn had with Pruitt and any other administration official about the waivers starting in August 2017, and to provide copies of emails and other communications between Icahn and Trump administration officials, or between CVR employees and the administration.

In a letter to Pruitt on Tuesday, the senators ask the administrator for details about the agency's involvement with Icahn on the waiver.

"We have previously raised concerns about Mr. Icahn's actions related to the RFS, and his access to key administration RFS decision-makers, and are troubled by the news that a corporation that made a profit of over $200 million in 2017, and that is owned by a billionaire former 'special adviser' to the president who is currently under investigation by federal prosecutors for his activities in the RFS market, has now received a hardship waiver from the RFS," the senators write.

The senators go on to ask Pruitt a number of questions about the process behind EPA's decision to grant CVR Energy a waiver.

Though the pursuit of Icahn's connection to the waiver issue may be drawing all the headlines, if CVR Energy received a waiver it would be among the least significant waivers granted by EPA.

Geoff Cooper, executive vice president of the Renewable Fuels Association, wrote in a blog post on Wednesday, http://www.ethanolrfa.org/…, that CVR Energy is among the smallest of the companies receiving waivers- at least among those that have been made public.

Companies that reportedly have received waivers have recorded significant quarterly profits in the latest 2018 reports.

Topping the list is ExxonMobil at about $4.6 billion; Chevron, $3.6 billion; HollyFrontier, $268 million; Andeavor at $172 million; then CVR at $66 million; and Delek at $28 million.

"In total, the Q1 net profits for six companies that likely received small refinery exemptions came to $8.8 billion, up 31% from $6.7 billion in Q1 of 2017. Oh, pity the poor refiner," Cooper wrote.

Refinery interests have said individual refineries qualify for hardships based on specific facts related to their operations and economics. It isn't based on quarterly earnings statements.

The Small Refiners Coalition said in a statement this week it wasn't until the 10th Circuit Court of Appeals pushed back last year that EPA was forced to review its scoring and return to its congressional mandate on granting waivers.

The U.S. Attorney's office for the Southern District of New York has subpoenaed Icahn's company, Icahn Enterprises LP, for information on his work with the president on the RFS.

Read the letter to Icahn here: https://www.warren.senate.gov/…

Read the letter to Pruitt here: https://www.warren.senate.gov/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

(TN)

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