Biofuel Official: Trump To Alter Ethanol Program, Helping Icahn

Source: By Eric Wolff, Politico • Posted: Wednesday, March 1, 2017

The White House is planning to issue an executive order to shift the burden for blending corn ethanol into the nation’s gasoline, according to an ethanol industry official, a move that’s likely to be worth hundreds of millions of dollars to a company owned by President Donald Trump’s regulation czar and fellow billionaire Carl Icahn. Bob Dinneen, CEO of the ethanol lobby group Renewable Fuels Association, told POLITICO on Monday that he received a call from a person in the Trump administration informing him that Trump would issue an executive order to change the Renewable Fuel Standard so that oil refiners, like Icahn’s CVR Energy, would no longer be responsible for meeting the EPA biofuels mandates. Instead, that job would fall to the gasoline wholesalers who supply fuel to retail outlets.

Dineen said that he told the official, whose identity he declined to disclose, that the ethanol producers would support the move if EPA would allow the use of E15 — gasoline containing 15 percent ethanol — year round. Currently, most gasoline is contains no more than 10 percent ethanol, with the higher 15 percent blend available only in the cooler months. “I was told the executive order was coming no matter what, so I tried to get what I could for my members,” he said. That move is likely to be opposed by the broader oil industry, which is seeking to overhaul or repeal the RFS that was last updated by Congress in 2007. Automakers have also fought higher ethanol blends, and burning E15 or higher blends in many cars will void the warranty. Even others in the ethanol industry are likely to oppose the move. “If we had been approached with this deal we would have flat out rejected it,” said Emily Skor, CEO of Growth Energy, another ethanol producer’s group. “This would gut the RFS and violate the president’s commitment to the policy.”

Dinneen said he received a call from the administration, though not the EPA, which administers the RFS. EPA did not respond to requests for comment. Ethanol producers are banking on higher ethanol blends gaining acceptance in the market as the best way to increase their domestic sales, since the mandate for conventional biofuel set by Congress will peak this year at 15 billion gallons. RFA has also been pressing EPA to accept scientific studies that show higher proportions of ethanol can be accommodated in the U.S. fuel market. Dinneen said that his request for the increase in E15 sales was not granted immediately by his caller, but that he was later given assurances the waiver from the EPA and the reviews would be forthcoming.