Don’t let Carl Icahn’s backroom anti-biofuels deal gain traction

In July of 2016, the president and CEO of the Renewable Fuels Association (RFA) said that rewriting the Renewable Fuel Standard (RFS) to exempt refiners would “put the power of the program in the hands of the people who are most interested in killing the program.” Then a major refiner began paying dues to the RFA.

The group changed course, accepting a backroom deal from billionaire refinery owner Carl Icahn to change the “the point of obligation” under the RFS. It is now working hand in hand to convince the Environmental Protection Agency (EPA) to destroy a fundamental aspect of America’s most successful clean energy program: a program that has the public backing of President Trump.  

{mosads}Put simply, the RFA is attempting to sell out the biofuel industry and renewable champions in the retail sector that have worked for 11 years to bring cleaner, more affordable fuels to the market. Worse, it jeopardizes American farmers and hundreds of thousands of workers who rely on a growing U.S. biofuels market to support their jobs.

Make no mistake, farmers today are already facing a crisis. In 2017, farm income is projected to be down nearly 50 percent from 2013, after four straight years of decline. Falling cropland values and low commodity prices are draining rural America of economic opportunities. A change in the point of obligation eviscerates the incentive for retailers to bring higher ethanol blends into the market, capping demand for homegrown fuels made from agricultural products.

It’s a sad state of affairs for those who had trusted the RFA to rise above the kind of insider deals that are common with Big Oil. Billionaires like Carl Icahn have no authority to run rogue, negotiating handouts for their own companies as if they were writing federal policy. This move is nothing more than a bailout of oil companies that don’t want to follow through on their obligations under the Clean Air Act.

RFA chief Bob Dinneen claimed to Politico that the RFS rewrite was inevitable — a claim Icahn had been making since he helped interview Scott Pruitt for the job of EPA administrator — but the White House had never publicly endorsed the idea, and it was clear to those who’ve followed his tactics that Icahn was talking up the value of his stock in CVR Refining. And senators from across the county oppose the change. In reality, the RFA simply bowed to pressure from its newest and largest member: an oil refinery.

In exchange, it was reportedly promised that Icahn would lend his support to another regulatory change, a waiver of Reid Vapor Pressure (RVP) limits that is needed to ease summer sales of higher ethanol blends.

It’s a commonsense fix that needs no help from Icahn to win bipartisan support. But the waiver loses all value if retailers no longer have an incentive to sell higher ethanol blends like E15, E30 and E85. That’s exactly what changing the point of obligation will do.

Moreover, it derails the RFS, imposing new burdens on small businesses and requiring the EPA to fundamentally restructure the fuel market, a process that could delay higher biofuel targets for years.

In order for U.S. agriculture to grow in the future, we need to demand a larger share of the fuel supply. The best near-term path to that end is holding the certainty of the current point of obligation. The backroom dealing between Carl Icahn and the RFA puts all of that in jeopardy.

Clearly, the RFA no longer represents the biofuels industry. POET, Growth Energy, the National Association of Convenience Stores and several Iowa groups — including Iowa Renewable Fuels Association, Iowa Corn Growers Association, Petroleum Marketers and Convenience Stores of Iowa, Iowa Biodiesel Board, Truckstops of Iowa and Kum & Go — are adamantly opposed to any changes in the RFS point of obligation. 

We’re proud to be part of the movement responsible for delivering affordable, renewable fuels to consumers. POET will continue to work with other industry leaders to fight for the growth of U.S. biofuels. And we urge the White House to reject the Carl Icahn bailout and uphold our shared commitment to creating jobs in rural America.

Kyle Gilley is the Senior Vice President of External Affairs & Communications at POET, America’s largest ethanol producer.

The views of contributors are their own and not the views of The Hill.