White House Talks on Icahn Plan to Shift Biofuels Point of Obligation

Posted on 03/09/2017 10:18 AM

White House officials have spent the past two days discussing the proposal from White House adviser Carl Icahn to modify federal biofuels policy to move the point of obligation to blenders, with those discussions taking place with several interested parties from Icahn to the Fuels America coalition and others, according to a report from Bloomberg.

The change proposed by Icahn is "a matter of extreme urgency" that has to be addressed "to avoid potential bankruptcies," Icahn said in an e-mail to Bloomberg. The situation represents "the quintessential example of the type of insane regulations throttling our economy that Donald Trump said all throughout his campaign he wanted to see changed. It is within the White House’s power to move quickly on this issue." He added, "I hope and believe the point of obligation will be changed shortly."

Top administration officials discussed the plan Tuesday with Icahn at length, according to the news service, with sessions Wednesday with representatives of the Fuels America coalition that opposes the move. Plus, the American Petroleum Institute (API) also discussed the matter with officials in the White House and at the Environmental Protection Agency (EPA). Fuels America has opposed the change.

As for the administration, the report indicated White House officials are not leaning in any particular direction, wanting to study the issue as it is legally complex and politically charged. White House spokeswoman Kelly Love said there was no executive order in the works on the issue, but did not respond to questions on the status of discussions.

While an executive order could set the process in motion by directing EPA to take action, the report noted it could take a year or more for regulators to formally implement the change.

Those arguing against the plan signal it would inject uncertainty into the biofuels market by forcing those who have never participated in the biofuels program to comply with the Renewable Fuel Standard (RFS) and that could hold up efforts to broaden the use of ethanol in the U.S. fuel supply.

As for Congress, Rep. John Shimkus (R-Il.) said he didn't thinking EPA making the shift would be a good idea. "The vast majority of obligated parties are in opposition to changing the point of obligation," Shimkus said. "Changing that really empowers a minority."

Comments: The report adds to the growing controversy that has erupted in the wake of the report earlier this week that Icahn and the Renewable Fuels Association (RFA) had apparently struck a deal on the matter, with RFA backing the proposed shift in the point of obligation in exchange for getting support for a Reid Vapor Pressure (RVP) waiver that would allow E15 to be sold year-round. The comments from Shimkus also signal that the Hill will likely get involved and that could add another layer onto the matter, further clouding the potential outcome.


Add new comment