President Trump “promised to support home-grown biofuels and Administrator (Scott) Pruitt is breaking that promise,” said Iowa Sen. Chuck Grassley on Monday following reports the EPA issued a “hardship” waiver exempting an oil refinery owned by billionaire Carl Icahn from complying with the ethanol mandate. The biofuels group Growth Energy said the waiver was “just one more example” of EPA “giving refineries everything they want.”
The ethanol industry says the waivers effectively reduced ethanol demand by 1 billion bushels last year from the official target of mixing 15 billion gallons of ethanol into gasoline. The oil industry said the EPA was obeying a 2017 appeals court ruling and clean air laws through the exemptions. The waivers are intended to help small-volume refineries who face high costs for buying ethanol credits known as RINs if they don’t blend enough ethanol.
“Small refineries control very little blending because they lack capital to make investments in blending infrastructure,” said oil industry groups American Petroleum Institute and the Small Refiners Coalition in arguing the waivers do not harm corn farmers or ethanol makers.
The reported waiver for CVR Energy Inc. attracted attention because Icahn is a former advisor to President Trump. Reuters said two industry sources told it of the waiver, which will allow the company “to avoid tens of millions of dollars in costs” in complying with the Renewable Fuel Standard. The news agency said Icahn met Pruitt while he was being considered for appointment as EPA administrator. “Icahn stepped down from his position as special regulatory adviser to the Republican president last August after lawmakers cited potential ethical problems in his dual role as an adviser and an investor,” said Reuters.
Grassley, who represents the top corn and ethanol state, said, “By handing out ‘hardship’ waivers to highly profitable, big oil refining companies, Administrator Pruitt is undermining the integrity of the Renewable Fuel Standard.” Grassley was among 18 senators who wrote to Pruitt on Monday asking for immediate approval of sale of E15, a 15 percent blend of ethanol into gasoline, during the summer and to provide a timeline for changing EPA regulations that restrict E15 to the cooler months of the year.