If, like Icahn’s CVR Energy, a refiner doesn’t have facilities to add the biofuels, it has the option to purchase them on the open market, often from gasoline distributors that aren’t covered by the mandate, or they can buy excess RINs from refiners that have the infrastructure to blend. CVR Refining, a subsidiary of CVR Energy, estimates it may have spent $250 million on credits last year.
EPA Rejection
In November, the EPA rejected Valero’s petition to have the obligation moved, saying that while the program has its challenges, making that change would create fresh obstacles. The agency left open the possibility for change, though, by opening up a comment period that ends Feb. 22.
Meanwhile, RINs have tumbled about 48 percent since Donald Trump was elected U.S. president on Nov. 8. In December, he named Icahn as a special adviser on regulations, and he’s also nominated Oklahoma Attorney General Scott Pruitt, a critic of the program, to head the EPA. In confirmation hearings last month, Pruitt vowed to support the law, though he did not rule out the administrative change.
Also in January, Trump’s administration also ordered a temporary freeze and review of 30 environmental regulations published in the Federal Register between Oct. 28 and Jan. 17, including the Renewable Fuel Standard.
Martin Parrish, Valero’s vice president of alternative fuels, said last week at the Iowa Renewable Fuels Summitt in Altoona that he thinks the revision will be granted. The renewable fuels industry “opposes the change” and will fight any potential challenges, according to Monte Shaw, the executive director of the Iowa Renewable Fuels Association.
Tweaking the law would raise consumer fuel prices and increase costs for the EPA to regulate the mandate at a time when government spending is increasingly scrutinized, said David Fialkov, vice president of government relations for the National Association of Truck Stop Operators.
“What we’re doing is defending the status quo,” Fialkov said.
This article was provided by Bloomberg News.