Government oversight officials revealed this week that Sen. Elizabeth Warren’s mud-slinging campaign against victims of the national renewable fuel quota system was groundless, another example of the far-left ideologue’s penchant for stretching the truth.
Warren had tried to launch an “investigation” into CVR Energy executive Carl Icahn after he protested an obscure loophole in the federal Renewable Fuel Standard system that is creating windfall profits for certain large, politically connected corporations and huge expenses for smaller independent firms.
Demonstrating her surprising ignorance of the actual situation, Warren tried to allege that Icahn, whose firm is on the receiving end of outrageous, EPA-assisted price gouging by Walmart and other companies, was rigging the system to his benefit.
However, the effort, likely the outgrowth of her religious devotion to environmentalism, fell to the ground with a resounding thud when the government agency with expertise and oversight on the matter revealed it had dismissed the issue completely.
In a letter to Warren, the U.S. Commodity Futures Trading Commission, which oversees the EPA-operated market for “Renewable Identification Numbers” (RINs), said it had reviewed the issue and dismissed it.
The EPA’s RINs market is beset by problems, just not those that are ideologically convenient for Warren. For example, fraud is rampant, driving up compliance costs for real businesses that are required to purchase the RINs to meet the national biofuels quota.
In the last several years, there have been a series of high-profile RINs frauds detected, but the stories sound like an episode of “America’s Dumbest Criminals,” suggesting there is a much deeper problem and the more clever fraudsters are operating undetected.
For example, a Maryland man in his thirties managed to make $9 million selling RINs from his garage before authorities caught up with him. Notably, the reason he was caught is because his neighbors reported their suspicions about the “baby blue Rolls-Royce, white Maserati, black Bentley and two Ferraris” that he had suddenly accumulated, unusual for the suburban neighborhood where he lived, according to the Washington Post — not because selling tens of millions of fake biofuels credits tripped any alarms at the EPA.
Despite all of the problems with the RINs market, however, political reform has become extremely difficult because the dysfunctional system also created a set of winners who aren’t about to let go of windfall profits they are receiving.
For a reason yet to be adequately explained in public, EPA’s rules award RINs to companies that blend gasoline with renewable fuels as it is being prepared for sale at gas stations.
This activity has zero value as it relates to the goals of the Renewable Fuel Standard. The blending operations do not create renewable fuels, so it is not incentivizing production. The downstream buyers are buying because of regulatory requirements, so it is not incentivizing consumption.
It’s basically like winning the regulatory lottery. You do the same thing you were doing, only now your profits are doubled because your competitors have to buy their legal right to existence from you.
Obviously, someone who has won the lottery does not want to give up their winnings, hence the recent creation of a brand new cottage industry of lobbyists for Walmart and other companies that benefit from this absurd situation.
This is where Icahn enters the situation. Since his company’s largest cost, by far, is paying his competitors for RIN credits (how insane is that?), he has publicly argued the policy should be changed.
In response, Warren began a campaign of claiming Icahn was engaging in cronyism and insider dealing, when in fact the opposite is true. Whether Warren was just too ideologically blinkered to understand the real dynamics or cynically saw Icahn as a necessary sacrifice for a larger goal is unknown.
What is clear is that the junior senator from Massachusetts has a growing problem with the truth. Perhaps we should rely on someone else when it comes to parsing complicated regulatory battles.