Carl Icahn, an adviser to President Donald Trump in the first year of the Trump administration, was estimated last month by Forbes magazine to have a net worth of $17.5 billion.
That’s billion. With a B.
Not the kind of person you would expect to be experiencing hardship anytime soon, right?
And yet, according to an April 30 report by the Reuters news service, the federal Environmental Protection Agency has granted a financial hardship waiver to an oil refinery owned by Icahn, 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 program. The regulation is meant to cut air pollution, reduce petroleum imports and support corn farmers by requiring refiners to mix billions of gallons of biofuels into the nation’s gasoline and diesel each year.
The Small Refiners Coalition, which represents companies that operate small refining facilities, said the EPA is required by law to help small refineries struggling with these regulations and that such exemptions are crucial to their financial well-being.
But the exemption for CVR’s Wynnewood, Okla., plant has led to criticism from a corn state lawmaker and the powerful corn lobby, which has already accused Trump and EPA Administrator Scott Pruitt of overusing the hardship waiver program in a way that hurts demand for ethanol.
“Hundreds of millions — and in some cases billions — of dollars in profits isn’t my definition of ‘hardship,’ ” U.S. Senator Chuck Grassley, R-Iowa, said in statement condemning the CVR waiver. “President Trump promised to support home-grown biofuels, and Administrator Pruitt is breaking that promise.”
“This one’s going to be hard for Pruitt to explain,” Brooke Coleman, head of the Advanced Biofuels Business Council industry group, said in an email.
We concede the argument that both Sen. Grassley and Ms. Coleman are going to come down on the side of corn farmers in nearly all situations. But that doesn’t mean they don’t have a point.
To prove RFS compliance, refiners must earn or purchase tradable blending credits — awarded by the government for each blended gallon of fuel — and hand them in to the EPA yearly.
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.
CVR has 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, Reuters reported.
If CVR has no biofuel blending facilities, how could it be accruing $23 million in profit in the biofuels credit market?
Here’s the twist specific to Icahn, though: Icahn is currently under investigation by the Justice Department for his role in influencing biofuels policy while serving as Trump’s adviser. Some lawmakers have expressed concern that Icahn may have used his presidential access to benefit his investments, a charge Icahn has rejected.
If Carl Icahn is eligible for a hardship waiver, after producing no biofuels but reporting a $23 million quarterly profit in the biofuels credit market, there’s something wrong with either the tax code or the Renewal Fuel Standard regulations.