EPA grants ‘financial hardship’ waiver to oil refinery owned by billionaire, Trump confidant

Icahn vetted Pruitt for top EPA job at Trump's request.

Carl Icahn is pictured at a 2010 New York gala at the Waldorf Astoria. (Credit: BILLY FARRELL/Patrick McMullan/Getty Images)
Carl Icahn is pictured at a 2010 New York gala at the Waldorf Astoria. (Credit: BILLY FARRELL/Patrick McMullan/Getty Images)

The Environmental Protection Agency (EPA) has granted a financial hardship waiver to an Oklahoma oil refinery owned by billionaire and Trump confidant Carl Icahn.

First reported by Reuters, the waiver will exempt the oil refinery from requirements under a federal biofuels law — the Renewable Fuel Standard (RFS) — effectively allowing it to avoid tens of millions of dollars in costs. The RFS rules aim to limit air pollution, reduce oil imports, and support corn farmers by requiring refineries to include biofuels in the nation’s gasoline and diesel mix.

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Icahn, a former special regulatory adviser to President Donald Trump, has long been working to undo biofuels policy. He stepped down as Trump’s adviser last August after lawmakers raised concern about potential ethical problems; he is now under investigation by the Department of Justice for his involvement in influencing biofuels policy under Trump. Some lawmakers worry he used his role as an adviser to benefit his investments (something Icahn has denied).

Under the EPA’s RFS rules, the agency can exempt small refiners — those that produce less than 75,000 barrels of fuel per day — from its requirement to include biofuels in its mix. To do so, refineries must show that complying with the biofeuls requirement would cause them “disproportionate financial hardship.”

According to sources speaking with Reuters, Icahn’s facility in Wynnewood, Oklahoma received the waiver in “recent months” — a waiver which the refinery had previously been denied under the Obama administration.

In late 2016, Icahn helped Trump vet Scott Pruitt for the EPA administrator position. Before coming to the EPA, Pruitt served as the attorney general for Oklahoma and was known for suing the EPA more than a dozen times over agency’s actions.

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As a New Yorker profile recounted: “When Scott Pruitt visited Trump Tower to discuss the top job at the EPA, the President-elect concluded the interview by instructing him to walk two blocks uptown to meet with Icahn.”

Icahn later told Bloomberg, “I’ve spoken to Scott Pruitt four or five times. I told Donald that he is somebody who will do away with many of the problems at the EPA.”

Monday’s news comes after Icahn claimed he has not spoken with Trump in months. Following a Washington Post report on April 17 stating that Icahn is among a select few individuals that Trump speaks with who “truly don’t have to be obsequious,” Icahn responded in a letter to the editor, stating: “I’d like to set the record straight: Neither I nor anyone in my office has spoken with the president or any high-level member of the Trump administration, including Environmental Protection Agency Administrator Scott Pruitt, regarding government business since August.”

The move to exempt Icahn’s refinery has freshly angered the powerful corn lobby. Brooke Coleman, head of the Advanced Biofuels Business Council industry group, told Reuters via email that “this one’s going to be hard for Pruitt to explain.”

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Over the past year the EPA has seen an influx in the number of refineries seeking a financial hardship waiver, after a 2017 federal appeals court ruling found the Obama administration was using too narrow of a definition of “financial hardship.” Last year the EPA granted roughly two dozen exemptions, compared to eight waivers granted per year under the previous administration.

“The criteria used to grant waivers has not changed since previous administrations.  EPA follows a long-standing, objectively determined process where the Agency uses a Department of Energy analysis to inform decisions about refiner exemptions/waivers, for refineries that are below the statutory threshold,” EPA spokesperson Jahan Wilcox said in a statement emailed to ThinkProgress. “EPA decisions on waivers are based on refinery-specific information that is subject to confidential business information protections.”

This article has been updated to include comments received by ThinkProgress from the EPA.