Billionaire Carl Icahn, a special adviser to Donald Trump, said there are others on the president-elect’s team who have deeper criticisms of America’s ethanol mandate than he does.
Icahn repeated criticism of the credit trading program that regulators and refiners use to track compliance with federal biofuel consumption quotas. While 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 Tuesday in a telephone interview, while 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. While the president-elect hasn’t disclosed specific plans for the EPA, 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 in the interview 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.
Todd Becker, the chief executive officer of ethanol producer Green Plains Inc., on Tuesday dismissed Icahn’s complaints about the ethanol laws as being the result of a bad bet in the fuel market.
“These are complicated policies, and I don’t think you can just take one view of one person who’s on the wrong side of the trade to really reform a system that doesn’t need to be reformed today,” Becker said in an interview on Bloomberg Television.
Icahn said reforming the program will change who’s obligated to show compliance and changes are needed to avoid refinery bankruptcies, particularly on the East Coast.
“It’s not a question of being on the right-side of a trade or on the wrong” side, Icahn said.
– With assistance from Alix Steel