NEW YORK, N.Y. (Reuters) — Crop futures rose recently as the United States biofuel industry was shaken over confusion about White House plans for overhauling the U.S. biofuel program.
Although administration spokespeople denied talk that changes were coming that could include methods to increase the amount of ethanol and biodiesel in the fuel supply, the market held on to much of the crop price rally.
Comments from the head of the Renewable Fuels Association sparked the turmoil.
Bob Dineen initially said only that a Trump administration adviser provided the information about the administration’s plans, but later said it came from billionaire investor Carl Icahn.
U.S. President Donald Trump in December named Icahn a special adviser to help in deregulating industry.
Dinneen said March 2 that Icahn had been the source.
According to Dinneen, Icahn said “the plan was to issue an executive order” that would shift the onus of blending biofuels into gasoline away from refiners and further down the supply chain to gasoline marketers.
The RFA issued a statement Feb. 28 saying it had been in-formed by “an official with the Trump administration” that an executive order was coming to alter the biofuels program in a way that eased the burden on refiners, and that the move was “not negotiable.”
The statement did not identify the official.
The White House responded saying an executive order was not in the works, and claimed no knowledge of a Trump official negotiating with the RFA.
Icahn, who owns a controlling stake in refiner CVR Energy Inc., said March 2 that he had indeed been negotiating for RFA’s support of a change to the biofuels program, but denied saying an executive order was pending.
“I told Mr. Dinneen that I didn’t know what the president would do, but believed he would be supportive and it would be ideal if we could get this fixed with an executive order,” Icahn said.
He said the negotiation between Dinneen and Icahn resulted in a joint memorandum from them imploring the White House to alter the biofuels program by removing the blending requirement from refiners, and by providing incentives for more ethanol production.
Icahn said refining company Valero was part of the negotiations. A Valero spokesperson confirmed in an emailed statement that company representatives had met with Dinneen and Icahn.
The White House did not comment on those negotiations, but said Icahn “does not have a position with the administration nor a policymaking role.”
“He is simply a private citizen whose opinion the president respects and whom the president speaks with from time to time,” White House spokesperson Kelly Love said.
Seven Democratic senators, including Elizabeth Warren of Massachusetts, sent a letter to the White House last month, saying Icahn’s role as an adviser to Trump created potential financial conflicts of interest and called for a review.
Refiners, including CVR, have long been seeking a way out of being responsible for blending biofuels into gasoline saying the requirement costs them millions of dollars.
Shares of CVR have soared 80 percent since Trump was elected.