Whatever Icahn Wants, Continued

Yet there's enough happening here for farmers to worry about the future level of demand for their products from China and ethanol. I will write about China in a future post. Today, a few words about ethanol. Let's start with the court case that the small refiners cite in their defense of the EPA's exemptions, Sinclair v. EPA. In it, the U.S. Court of Appeals for the Tenth Circuit said the EPA had misinterpreted the law in denying exemptions to the Renewable Fuels Standard to two small refineries in Wyoming. The court overturned the denials and instructed the EPA to reconsider Sinclair's petition using the court's interpretation of the law.  Ethanol interests say the EPA has been granting exemptions at double the pace of previous years. Is the agency doing this relying on the Tenth Circuit ruling in the Sinclair case? If so, there are several things about that case that need saying. First, two other U.S. Appeals Courts -- the Eighth Circuit and the D.C. Circuit -- have reached a different conclusion about the validity of the EPA's statutory interpretation. The Tenth Circuit ruling attempts to distinguish those cases as different from Sinclair, but its attempts aren't terribly convincing. The public doesn't know where all the newly exempted refineries are located, but for any not in states under the Tenth Circuit's sway, the ruling wouldn't bind the EPA. Even in considering petitions from Tenth Circuit refineries, the EPA would not be required by the Sinclair case to grant every petition. The statute requires a showing of "disproportionate economic hardship." The court said the EPA had read this to mean the refinery must demonstrate "an existential threat" --compliance costs at a level threatening its long-term viability. The EPA denied doing that, and the dissenting Tenth Circuit judge agreed, saying the agency uses "a more nuanced analysis," as required by the statute. If that's really the case, the EPA could deny similar petitions explaining more clearly the nuanced way it reached its conclusions.  Another is the EPA's exemption for small refineries owned by a big company -- Andeavor -- making a billion and a half dollars in profits.. This may comply with the letter of the law, which focuses on individual refineries and not companies, but it seems abusively far removed from the law's spirit. Most troubling is the exemption granted a refinery owned by Carl Icahn's CVR Energy. Before naming Scott Pruitt to head the EPA, then President-elect Donald Trump sent him to see Carl Icahn. In effect, then, Icahn helped Pruitt get his job, and now Pruitt's EPA is rewarding Icahn with regulatory relief to the tune of tens of millions of dollars.