05.09.18

U.S. Senator Tammy Baldwin Questions Scott Pruitt and Carl Icahn on Renewable Fuel Standard Waiver for Icahn’s Refinery

Icahn’s CVR Energy Claimed “Economic Hardship” - but Made a Profit of over $200 Million in 2017

DOJ Investigating Icahn for Potential Illegal Actions While Advising President Trump on RFS

WASHINGTON, D.C. U.S. Senator Tammy Baldwin today joined Senators Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Tammy Duckworth (D-IL), Sherrod Brown (D-OH), Amy Klobuchar (D-MN), and Tina Smith (D-MN), and sent letters to Environmental Protection Agency (EPA) Administrator Scott Pruitt and Carl Icahn, billionaire former adviser to President Trump and Chairman of CVR Energy Inc., to request information on reports that the EPA granted an oil refinery owned by CVR an “economic hardship waiver” from Renewable Fuel Standard (RFS) requirements. The senators previously raised concerns about Icahn’s actions related to the RFS and his access to key Administration RFS decision makers when he was a White House special adviser. They expressed concern that Mr. Icahn, who is currently under investigation by federal prosecutors for potential illegal activity while working as a White House adviser to change RFS regulations, received a “hardship waiver” even though CVR made a profit of over $230 million in 2017.

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,” wrote the senators.

In 2016, Mr. Icahn, who was a public supporter of Scott Pruitt’s nomination as EPA Administrator, bet heavily on a drop in the price of renewable fuel credits. Mr. Icahn then secured a position as a senior adviser to President Trump where he advocated major changes to the RFS program that had the potential to cause the price of renewable fuel credits to drop. Credit prices did drop – ultimately resulting in a $50 million windfall for his company. After Mr. Pruitt was nominated, Mr. Icahn said that Scott Pruitt “feels strongly about the absurdity of these (RFS) obligations.”

Refiners can receive a temporary exemption from RFS requirements if they produce less than 75,000 barrels of oil per calendar day and prove to the EPA that complying with the RFS “would impose a disproportionate economic hardship” on them. The EPA has granted at least 24 waivers in recent months, a significant change from the 6-8 waivers granted annually in the past several years. CVR reported profits of over $230 million in 2017 and reportedly received an exemption this year after being denied in a previous year. The senators asked the EPA and Mr. Icahn to answer questions about the exemption and how it was granted by no later than May 22, 2018.

In February 2017, Senators Baldwin and her Senate colleagues wrote to White House Counsel Don McGahn about the role Mr. Icahn was playing in President Trump's White House, how he was involved in the selection of Scott Pruitt to be the nominee for EPA Administrator, and to what extent Icahn influenced RFS policy. They also asked the EPA for information about Mr. Icahn’s role in determining the fate of the RFS. In May of 2017, they called on the heads of the Commodities Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the EPA to investigate the activities of Mr. Icahn for potential insider trading, market manipulation and other securities and commodities law violations in the market for renewable fuel credits. Mr. Icahn’s company disclosed in its November 2017 public SEC filings that DOJ had opened an investigation of Mr. Icahn’s activities in the RFS market.

The letter to Icahn is available here. The letter to the EPA is available here.