September 12, 2017 / 8:39 PM / 2 months ago

EPA chief denies Icahn influence in biofuel regulation

WASHINGTON (Reuters) - Investor Carl Icahn never wielded excessive influence on U.S. biofuels policy while acting as President Donald Trump’s adviser on regulation, the head of the Environmental Protection Agency said in a letter to a Democratic Senator Sheldon Whitehouse.

FILE PHOTO: Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York, U.S., February 11, 2014. REUTERS/Brendan McDermid/File Photo

The letter, dated September 11, was a response to repeated requests by Whitehouse and other Democratic lawmakers for information on Icahn’s dual role as an adviser on biofuels regulation and a majority stakeholder in a refining company, CVR Energy, directly affected by those rules.

Icahn ended his adviser role in August after facing criticism his guidance to Trump represented a conflict of interests as it may have benefited CVR. Icahn has denied the allegations.

EPA Administrator Scott Pruitt said in the letter to Whitehouse, seen by Reuters on Tuesday, that Icahn was “one of many” of Trump’s advisers that he met during his confirmation process, and he “made no assurances with regard to the point of obligation or any other substantive issue.”

The “point of obligation” refers to a requirement under the U.S. Renewable Fuel Standard that refiners blend increasing amounts of biofuels like ethanol into their gasoline every year. Icahn, his company CVR, and a handful of other refiners wanted to shift that responsibility off refiners in a way that would have saved them hundreds of millions of dollars.

Icahn proposed the reform to the administration in February. The Trump administration has not made a decision on the request, but environmental regulators are preparing to formally reject it, sources have told Reuters.

Icahn, who has an 82 percent stake in CVR, has said his proposal did not constitute self-dealing because it would have benefited some of his competitors too.

Pruitt added in the letter that the EPA’s Office of Environmental Information searched the EPA emails of 39 senior leadership employees, and found “no emails to or from any of those employees and Mr. Icahn or CVR on any subject” between Feb. 17 and Aug. 18.

A spokesman for Whitehouse said the senator was reviewing Pruitt’s response “for accuracy and to determine whether additional steps are warranted.”

Icahn’s proposal to shift the point of obligation would have lowered prices for renewable fuels credits known as RINs. A Reuters review of CVR filings showed the company was building up a large bet on a decline in RIN prices months before Icahn made his reform proposal.

Investors, meanwhile, have built up a large short position in CVR in the past three months, according to Reuters data.

Reporting By Valerie Volcovici; Editing by Richard Valdmanis and Andrew Hay

Our Standards:The Thomson Reuters Trust Principles.
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