Democratic Senators Question Pruitt On Small Refinery Waiver to Carl Icahn

  • Wednesday, 09 May 2018 10:20

A group of Democratic Senators, including Minnesota's Sen. Amy Klobuchar and Sen. Tina Smith, have sent a letter to EPA Administrator Scott Pruitt seeking clarification about a reported RFS exemption for a Carl Icahn-linked oil refinery.

The letter reads as follows:

A new report earlier this week indicated that the Environmental Protection Agency (EPA) granted CVR Energy Inc. (CVR) - a petroleum refining company linked to Carl Icahn - an "economic hardship waiver" from the Renewable Fuel Standard (RFS).We have previously raised concerns about Mr. Icahn's actions related to the RFS, and his access to key Administration RFS decision makers, and 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. We are writing today to request information about the reported exemption for CVR and about Mr. Icahn's role in EP A's decision to grant this waiver.

Mr. Icahn, a former "special advisor to the President on issues relating to regulatory reform" resigned from his position at the White House last August after reports surfaced that he was actively working to change RFS regulations to benefit CVR, a company in which he currently serves as chairman of the board and owns a controlling interest. Mr. Icahn "made a massive bet in 2016" that the price of the renewable fuel credits would drop. He then - as an unpaid adviser to President Trump - recommended personnel and policies that did in fact cause the price of these credits to drop. The net result was an "impossible" "rare profit" on the credits, "a $50 million turnaround" from Mr. Icahn's initial investment.

Mr. Icahn also publicly supported your nomination, and claimed was consulted before President-elect Trump selected you for the position. After you were nominated as EPA Administrator, Mr. Icahn said, "He's someone I think will do away with many of the problems at EPA ... and I do think he feels strongly about the absurdity of these [RPS] obligations ....”The Justice Department has since opened an investigation into whether Mr. Icahn violated any laws while working on RPS policy during his tenure at the White House.

As you know, the RPS requires refiners and importers of fossil fuels in the United States to blend "renewable fuels into their gasoline or diesel fuel products, or ... [acquire] credits that represent the required renewable fuel volume.”Refiners can receive a temporary exemption from these requirements if they produce less than 75,000 barrels of oil per calendar day (small refinery), and prove to the EPA that complying with the RPS "would impose a disproportionate economic hardship" on them.  According to public reports, the EPA has granted at least 24 waivers in recent months - a significant change from the 6 to 8 waivers that have been granted annually for the past several years. CVR - which reported profits of over $230 million in 2017 received an exemption this year after having been denied in a previous year.

In order to better understand the reports that CVR was able to receive an exemption, I ask that you provide answers to the following questions no later than May 22, 2018:

1. Are the reports accurate that CVR received an exemption from RPS standards? If so, please provide which refineries or refinery got the exemption and their daily operating production.

2. For refineries listed in response to question 1 with daily operating capacity above 75,000 barrels of oil per calendar day, please explain how EPA determined that CVR qualified for a hardship waiver, as this would be in direct conflict with the statutory requirement.

3. For refineries listed in response to question 1 with daily operating capacity below 75,000 barrels of oil per day, the statutory small refinery exemption language requires that evaluation of these hardship petitions are done in consultation with the Secretary of Energy.

a. Was DOE consulted during the process of determining whether there was disproportionate economic hardship for the refinery in question?

b. The law also requires that DOE modeling and economic analysis be used to determine the nature of the economic hardship, please provide all reports and background data that was used in approval of the wavier.

4. Which officials at EPA determined that CVR was entitled to a hardship waiver?

5. When and how did you become aware of the waiver request?

6. Were you involved in the decision to grant the waiver? If so, what role did you play?

7. Did you or any other EPA official have any discussion of this exemption, or RFS policy generally, with Mr. Icahn or anyone else affiliated with or representing CVR? If so, please identify all such conversations, the date on which they occurred, and the nature of the conversation.

8. Were any White House officials involved in, or aware of, the decision to grant CVR an exemption? If so, please identify which individuals were involved, and the nature of their involvement.

9. Please provide copies of all email or other communications between any EPA officials and any CVR employees or representatives related to the CVR waiver request.

The letter was signed by the following Democratic Senators: Elizabeth Warren (MA), Tammy Duckworth (IL), Sherrod Brown (OH), Tammy Baldwin (WI), Sheldon Whitehouse (RI), Amy Klobuchar (MN) and Tina Smith (MN)

The full letter can be read here: