Trump energy proposal would aid ally Icahn

Trump energy proposal would aid ally Icahn

Sept 15, 2016 - Donald Trump’s campaign published and withdrew a policy platform Thursday that included an arcane ethanol proposal that would benefit billionaire investor Carl Icahn, a friend and supporter whom the Republican nominee has touted as a potential treasury secretary.

Source: Politico
Author: Elana Schor

Donald Trump’s campaign published and withdrew a policy platform Thursday that included an arcane ethanol proposal that would benefit billionaire investor Carl Icahn, a friend and supporter whom the Republican nominee has touted as a potential treasury secretary.

The proposal is unusually wonky by Trump standards, but it would satisfy a major priority for Icahn, who owns an oil refining company saddled with $200 million a year in expenses to buy credits required by a federal program that guarantees ethanol a share of the U.S. gasoline supply.

The 80-year-old activist investor’s company, CVR, has joined other small refiners in pushing to move the credits' financial burden elsewhere, fighting bigger oil companies that, in turn, are battling the corn lobby to demand that the entire ethanol mandate be overhauled or ended. Trump’s policy statement appeared to take Icahn’s side in the tangled dispute, charging that “these regulations will give Big Oil an oligopoly by destroying the small to midsize refineries.”

Icahn expressed the same argument in a letter to the Environmental Protection Agency last month, when he also complained of an “oligopoly” in the making.

Icahn told POLITICO in an interview Thursday that he had no influence on the ethanol language in Trump's economic agenda, but that he had sent Trump his EPA letter as "a friend."

"I have a call in to him now to congratulate him," Icahn said after Trump embraced the idea.

Trump "should make it clear" that he isn't against the federal ethanol mandate, merely against the credits program that has hurt smaller refiners, Icahn said. "Obviously, he's against Big Oil, and I agree with him completely."

Trump’s platform also contained attacks on the Obama administration’s climate, air and water regulations that matched, nearly word for word, earlier criticisms published by The Heritage Foundation. That appeared to fit a pattern for Trump, who has taken heat for copying ideas from others rather developing his own policies.

The energy and environmental provisions were included in a fact sheet about Trump’s “pro-growth economic policy” that the campaign posted Thursday morning, only to take it down without explanation hours later after being contacted by POLITICO. A new version, without the Icahn-friendly ethanol proposal or Heritage-esque language, reappeared on the site by mid-afternoon. (POLITICO saved a copy of the original.)

Trump’s campaign responded that an incorrect version of the policy fact sheet had been temporarily placed online Thursday, the same day he outlined his economic plan in a speech at the New York Economic Club. But it said he was not wavering on his support for the overall ethanol program, which is formally known as the renewable fuel standard.

"Mr. Trump's commitment to the renewable fuels standard is unshakeable and unchanging," senior communications adviser Jason Miller said in a statement.

Hillary Clinton has praised the ethanol mandate, which she has pledged to get "back on track," but has not weighed in on the narrower dispute over biofuels credits. Ethanol supporters expressed concern earlier this year after learning she had sought advice from an ethanol critic who is considered to be a top candidate to lead her EPA.

Icahn has been an outspoken supporter of Trump, and earlier this year gave $500,000 to a veterans’ charity drive that Trump held while skipping a Republican debate in Iowa. Icahn and his wife also have both maxed out in donations to the Republican National Committee, giving $44,600. On the other hand, Icahn turned down an offer to join Trump’s economic advisory team and has declined interest in the treasury secretary job that the Republican nominee has often said he would offer him.

Within the oil and ethanol industries, Trump’s policy statements triggered an almost immediate debate on whether he has shifted from the strong pro-ethanol stance he took before this year’s GOP caucus in corn-rich Iowa.

Trump told an Iowa audience this week that he would “protect” the ethanol mandate, which requires gasoline refiners to blend certain amounts of the plant-based product into the U.S. fuel supply — or pay what amounts to a financial penalty by buying biofuel credits. But after Thursday’s policy statement came out, some ethanol supporters weren’t sure.

“This seems to be inconsistent with Mr. Trump’s previous statements expressing a firm commitment to a strong renewable fuel standard," Emily Skor, CEO of the ethanol producers’ group Growth Energy, said in a statement.

Brooke Coleman, executive director of the Advanced Biofuels Business Council, agreed that the now-defunct fact sheet is "inconsistent with Trump's previous position."

"They have a choice to make,” he said of Trump and his team. “Are they pro-[biofuels mandate] or aren’t they?"

But Bob Dinneen, CEO of a pro-ethanol group called the Renewable Fuels Association, dismissed the notion that Trump had shifted on the mandate. “This shouldn’t be interpreted as a reversal of support,” he said in a statement.

Within the oil industry, opponents of the Icahn-backed proposal bristled Thursday at the Trump campaign’s portrayal of the debate as “Big Oil” versus the smaller refiners. But industry players who agree with Icahn on moving the mandate’s financial burden away from the refiners cheered Trump for weighing in.

“This is not a partisan issue,” said Rich Walsh, senior vice president of the refining company Valero, which supports the Icahn-backed change. “It is a simple market structure change that levels the playing field and ends windfalls that hurt the program.“

Trump’s policy fact sheet on regulatory policy included language almost identical to a May paper by The Heritage Foundation criticizing controversial Obama administration regulations on ozone pollution, power plants’ greenhouse gases and water policy. Trump said he would roll back all those regulations.

In one example, Trump’s fact sheet attacks a tightened ozone pollution standard that the EPA issued last year, saying: “The new ozone standard will push hundreds of communities out of compliance, and force states to devise plans to limit industrial activity and transportation projects, as well as replace existing emissions control equipment with more advanced (and costly) emissions equipment.”

Heritage’s earlier version: “The new ozone standard of 70 ppb will push hundreds of communities out of compliance, and force states to devise plans to limit industrial activity and transportation projects, as well as replace existing emissions control equipment with more advanced (and costly) systems.”

The Trump campaign also closely mimicked Heritage’s language about the costs of the rule, including a bit about how costs are calculated separately for smog-plagued California than the rest of the nation.

In addition, the campaign appeared to lift Heritage’s language about EPA’s climate rules for power plants, a major priority of President Barack Obama’s that Trump has vowed to repeal.

The emissions rules “will impose $7.2 billion in annual costs, according to the agency itself — and far more according to private sector critics,” Trump’s plan said.

Heritage wrote earlier this year that the rule has “$7.2 billion in annual costs, according to the agency (and far more according to critics).”

The campaign’s description of EPA’s Waters of the United States rule also appears to be taken from The Daily Signal, a Heritage-owned news site.

The rule — a sweeping regulation facing fierce attacks from agricultural, energy and development companies — “covers virtually all waters in the nation whether navigable or not and, by extension, much of the land use, from ponds on farms to storm run-off from home building sites,” the Trump camp wrote.

A June post on Daily Signal describes says the water rule “would cover virtually all waters in the nation and, by extension, much of the land."

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