Icahn says he’s not the sharpest critic of ethanol mandate
Source: By Bloomberg • Posted: Tuesday, January 3, 2017
Icahn on Tuesday repeated criticism of the credit trading program that regulators and refiners use to track compliance with federal biofuel consumption quotas.
Although he hasn’t expressed opposition to renewable fuel use, “there are people on the Trump team that believe ethanol itself does very little” in helping the environment, Icahn said, declining to provide further details.
“It’s a black cesspool of trading if there ever was one,” Icahn said.
Last week, Trump said he tapped Icahn as a special adviser on regulations. Icahn owns a majority stake in CVR Energy Inc., an independent oil refiner, and has dubbed trading in biofuel credits, known as Renewable Identification Numbers, or RINs, the “mother of all short squeezes.” The U.S. passed regulations in November mandating record biofuel use, and prices for the credits had surged in anticipation of the new quotas.
Icahn said this month that he helped Trump pick Oklahoma Attorney General Scott Pruitt to head the Environmental Protection Agency. Pruitt has criticized increased ethanol use. The president-elect hasn’t disclosed specific plans for the EPA, but the Pruitt choice sent the price of RINs tumbling the most in at least a year.
Icahn has said the agency’s leadership change won’t end the mandate. Instead, he’s confident Pruitt will shift the burden of compliance further down the distribution chain, to fuel blenders.
“There’s no reason” for companies who aren’t required to participate in the program to be trading RINs, Icahn said Tuesday.
Petroleum refiners are required to blend renewable fuels like ethanol into gasoline as part of a 2007 energy law passed under President George W. Bush that sought to slow the pace of oil consumption and its carbon footprint. Each gallon is tracked by a unique, 38-digit Renewable Identification Number.