Senators to Pruitt: Why did Icahn refinery get RFS waiver?

Source: Marc Heller, E&E News reporter • Posted: Thursday, May 10, 2018

Six Senate Democrats are asking EPA Administrator Scott Pruitt to explain how an Oklahoma refinery owned by billionaire Carl Icahn was granted a waiver from federal biofuel blending mandates.

“We 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, led by Elizabeth Warren (D-Mass.), said in letters to Pruitt and Icahn.

Warren was joined by Sens. Sheldon Whitehouse of Rhode Island, Sherrod Brown of Ohio, Tammy Duckworth of Illinois, Tammy Baldwin of Wisconsin, and Amy Klobuchar and Tina Smith of Minnesota.

According to news reports by Reuters, EPA granted an “economic hardship” waiver to CVR Energy Inc., of which Icahn is an owner. Icahn also previously served as an adviser to President Trump and had urged the administration to ease aspects of the federal renewable fuel standard that force refiners to buy renewable fuel credits.

The credits, called Renewable Identification Numbers, or RINS, grew more expensive in the past two years. But prices have tailed off sharply in the past few months amid talk of changes to the renewable fuel standard.

Economic hardship waivers allow refiners that make less than 75,000 barrels of oil a day to temporarily escape the RFS requirements, if they can demonstrate economic harm. EPA has sharply increased the number of waivers granted in the past year or so.

In their letters, the lawmakers asked for more details about the waivers by May 22. Among other requests, the senators asked for daily production statistics for the affected refineries, as well as copies of communication between EPA and CVR Energy.

In addition, they asked Pruitt whether he was personally involved in any decision to grant waivers to CVR. Icahn was an early public supporter of Pruitt’s nomination as administrator.

In the letter to Icahn, they asked how many times CVR has applied for waivers in the past five years, and how often they’ve been granted.

Pruitt has said in recent weeks that waiver requests are judged by the economic conditions facing particular facilities, and that the agency’s determinations are made according to legal requirements, in consultation with the Department of Energy.

The Small Refiners Coalition, an industry group, said EPA grants the waivers based on specific facts related to a facility’s economics and that the agency is following the law after being told by a federal court in 2017 that it had been improperly denying petitions for waivers.

“It isn’t based on a popularity contest for their investors, no matter who they are,” a coalition spokesman said in an email.

The Renewable Fuels Association said publicly traded refiners like CVR reported robust profits in the first quarter of this year. Among other details the RFA gleaned from earnings statements, CVR reported that it “turned a $23 million profit on RIN credits in the first quarter, nearly quadrupling the $6 million it earned in the market for biofuels credits in the same period of 2017.”