Government work has paid off handsomely for billionaire Carl Icahn.
CVR Energy Inc., his oil refining company, saved about $60 million in the first quarter because of expectations that the federal government will ease a regulation involving renewable fuels, securities filings show.
It’s much more than a lucky break. As a “special regulatory adviser” to President Donald Trump, Icahn himself has been advocating the kind of relief that will benefit his company.
Icahn’s cost savings show how the Trump administration has let officials’ outside business interests influence policy decisions. Richard Painter, a University of Minnesota Law School professor and White House ethics counsel under President George W. Bush, calls Icahn’s role “a clear conflict of interest.”
Even before the magnitude of Icahn’s gain was known, a group of U.S. Democratic lawmakers sent a letter to regulators urging them to investigate whether Icahn used his role as adviser to gain unfair trading advantages.
Brandee Stephens, a spokeswoman for Sugar Land, Texas-based CVR declined to comment. Icahn didn’t return several messages left for comment.
Icahn’s windfall results from potential changes in the George W. Bush-era law known as the Renewable Fuel Standard. It requires that billions of gallons of biofuel be added to the nation’s gasoline. Today, about 10 percent of U.S. motor fuel is made from corn, not oil.
Biofuel Mandate
The U.S. Environmental Protection Agency enforces this mandate by requiring refineries and importers to blend in ethanol and other biofuels, or buy credits from those who do the blending. The credits, called renewable identification numbers, or RINs, trade in an over-the-counter market.
CVR’s refineries in Kansas and Oklahoma rely mostly on buying RINs. Icahn has said a spike in the price of the credits last year had cost the company $200 million annually. He became an advocate of changing EPA rules so fuel blenders, rather than refiners, face the compliance burden.