CARL ICAHN, THE high-stakes financier who has been using his position as a Trump adviser to push for a major rule-change affecting the ethanol industry, is now literally betting millions of dollars on financial markets that Trump will take his advice.
As previously reported at The Intercept, Icahn has pushed to get the Environmental Protection Agency to shift responsibility for blending the required amount of renewable fuel into gasoline. Right now, that obligation lies with oil refiners; Icahn wants it shifted to wholesalers.
As an unpaid but influential “special advisor to the president on regulatory reform” who vetted EPA chief Scott Pruitt, Icahn has plenty of clout to get this done.
Icahn stands to profit enormously from such a move in the long run; he is majority owner of CVR Energy, a refiner that lacks the infrastructure to blend ethanol. This forces the company to purchase “renewable identification numbers” (RINs), credits that allow it to comply with the obligation. The wholesalers sell the RINs after blending the ethanol themselves.
If Icahn succeeds in his quest, CVR would no longer have to buy RINs, which cost them $205.9 million last year. Icahn already told the Renewable Fuels Association — the leading lobby for the ethanol industry — that the Trump administration would absolutely make the change, leading RFA to agree to a deal reversing their previous position, and supporting the rule.
The change would also collapse the market for RINs, because refiners wouldn’t have any reason to buy them anymore.
And Icahn isn’t waiting to cash in. While pushing to crash the RIN market, Icahn has placed major bets that he will win.
Icahn is effectively short-selling RINs.
Bloomberg reported on Friday that Icahn acknowledged that he’s betting on a decline in the RIN market.
“This is what I do in the market. I’m taking a chance,” the billionaire investor said.
First, he’s directed CVR Energy to…
READ THE FULL REPORT HERE: Trump Adviser Is Betting Millions of Dollars That Trump Will Take His Advice