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Did This Billionaire Game Ethanol Markets for a $50 Million Windfall?

The Motley Fool | Posted on August 17, 2017

It hasn't exactly been a secret that billionaire investor Carl Icahn holds contempt for renewable fuels. His companies, CVR Energy and CVR Refining, have often blamed government rules for eating into profits. Fuel blenders are required to submit to the U.S. Environmental Protection Agency special compliance credits, called renewable identification numbers, or RINs, to show that mandated volumes of renewable fuels are being blended into the nation's gasoline supply. If a blender's gasoline volume does not contain the required percentage of biofuels, it can buy RINs from blenders that have excess credits. But a weird thing began happening in late 2016.CVR Energy and CVR Refining began putting off purchases of RINs in the months leading up to and following the general election in November. In fact, the company began selling millions of them. In effect, the company was betting that the prices of the compliance credits, which are traded freely on the open market, would drop in the future. Icahn was essentially shorting RINs.There's nothing wrong with that. However, a group of eight senators has pointed out that the unusual trading activity of CVR Refining and Icahn resulted in a $50 million profit -- an "impossible" "rare profit" -- and have requested an investigation into possible insider trading. Did the billionaire game renewable fuels markets for his own gain? The compliance credits are traded on the open market, which keeps ethanol producers from flooding the market with ethanol and allows refiners a chance to buy low and sell high (if they choose).So, CVR Refining wasn't doing anything illegal in the last year by simply not buying RINs or reselling RINs.But here's the potential problem: Carl Icahn was advising President Donald Trump -- first unofficially during the presidential campaign and then, beginning in late December, as a special advisor -- on matters involving the EPA and deregulation while making these market trades. In other words, there may have been a conflict of interest that essentially amounted to insider trading.For instance, Icahn was a strong supporter of nominating Scott Pruitt to head the EPA. Pruitt was a strong critic of the RFS -- and now leads the agency. RIN prices fell 20% immediately following his nomination. CVR Energy and CVR Refining stocks hit 52-week highs. 

Report: Climate Change Is Already Hurting the U.S.

Time | Posted on August 15, 2017

A draft report produced by 13 federal agencies concludes that the United States is already feeling the negative impacts of climate change, with a stark increase in the frequency of heat waves, heavy rains and other extreme weather over the last four decades. The preliminary report summarizes the current state of the science for the upcoming National Climate Assessment. Trump and his Cabinet have expressed public doubts that the warming is being primarily driven by man-made carbon pollution and will have serious consequences for Americans. The assessment has generally been released every four years under a federal initiative mandated by Congress in 1990. The assessment said global temperatures will continue to rise without steep reductions in the burning of fossil fuels, with increasingly negative impacts. Worldwide, 15 of the last 16 years have been the warmest years on record. Today, the National Oceanic and Atmospheric Administration said 2017 is on track to be the second warmest for the United States. The report calls the long-term evidence that global warming is being driven by human activities "unambiguous.""There are no alternative explanations, and no natural cycles are found in the observational record that can explain the observed changes in climate," the report said, citing thousands of studies. "Evidence for a changing climate abounds, from the top of the atmosphere to the depths of the oceans."

New Jersey-Size 'Dead Zone' Is Largest Ever in Gulf of Mexico

National Geographic | Posted on August 15, 2017

A record-breaking, New Jersey-sized dead zone was measured by scientists in the Gulf of Mexico this week—a sign that water quality in U.S. waterways is worse than expected.The Gulf of Mexico hypoxic or low-oxygen zone, also called a dead zone, is an area of low to no oxygen that can kill fish and other marine life. It’s primarily caused by an excess of agricultural nutrients that flow downstream and into surface waters, stimulating harmful algae.To record the new measurements and assess the severity of low oxygen levels in the Gulf, scientists from the Louisiana Universities Marine Consortium (LUMCON) embarked on their 31st mid-summer hypoxia research cruise in July. Even with reported numbers as large as they are, the team of scientists said the entire area of the dead zone couldn't be mapped due to an insufficient number of workable days on the ship. There was more hypoxia to the west, and the measured size would have been larger if there was more time for researchers to work.

CA: Cap-and-trade extension included fire fee repeal

Capital Press | Posted on August 10, 2017

The bill to extend California’s cap-and-trade program through 2030, which was signed recently by Gov. Jerry Brown, included the repeal of a controversial fee charged to rural landowners for fire protection.

15 states appeal EPA delay of stricter air-quality standards

AP | Posted on August 3, 2017

Attorneys general from 15 states filed a legal challenge on Tuesday over the Trump administration’s delay of Obama-era rules reducing emissions of smog-causing air pollutants. The states petitioned the U.S. Court of Appeals for the D.C. Circuit to overturn Environmental Protection Agency Administrator Scott Pruitt’s extension of deadlines to comply with the 2015 Ozone National Ambient Air Quality Standards.Pruitt announced in June he was extending the deadlines by at least one year while his agency studies and reconsiders the requirements. Several pro-business groups are opposed to the stricter rules, including the American Petroleum Institute, the American Chemistry Council and the U.S. Chamber of Commerce.

Ethanol makers steer away from fuel, turn to booze

St Louis Post Dispatch | Posted on August 3, 2017

A U.S. glut of fuel-grade ethanol has major producers, including Green Plains Inc. and industry pioneer Archer Daniels Midland Co., pursuing other markets and idling excess capacity in an effort to rebuild sagging margins. ADM and Green Plains both said on Tuesday they are converting fuel-ethanol capacity into beverage and industrial alcohol production, as well as idling some mills. The announcements follow Pacific Ethanol's decision in June to buy a beverage-grade facility in Illinois, a diversification away from fuel ethanol. ADM said it was reconfiguring its Peoria, Ill., corn dry mill to produce more beverage and industrial alcohol. It will steer the plant's fuel to export markets, taking 100 million gallons of annual production out of the domestic market.

‘Solar for All’: Can Illinois energy bill live up to ambitious promises?

Midwest Energy News | Posted on August 3, 2017

After months of negotiations and surviving a contentious budget battle in the state legislature, the hard work of enacting Illinois’ comprehensive energy bill is underway.The Future Energy Jobs Act calls for the installation of about 2,700 MW of solar in Illinois by 2030, a dramatic increase from the state’s current 75 MW. “It’s going to be crazy, and it’s going to be really exciting,”said Lesley McCain, executive director of the Illinois Solar Energy Association. “We’ve seen such interest from around the country, from all types of developers focused on helping get this legislation built out correctly.”About 40 percent of the new solar is to be utility-scale projects over 2 megawatts, about 50 percent is to be distributed and community solar, and two percent is to be on brownfields, with the remaining 8 percent left up to state officials’ discretion.The state will deal with utility-scale solar much as it has in the past — through procurements carried out by the Illinois Power Agency.

Appeals court tosses lower biofuels levels set in 2015

Des Moines Register | Posted on August 2, 2017

A federal appeals court says the Environmental Protection Agency cannot limit the targets in the national Renewable Fuel Standard based on factors such as demand. Renewable fuel advocates praised the U.S. Circuit Court of Appeals for the District of Columbia's ruling, which could prompt a revision of the Trump administration's proposals earlier this year to mostly maintain current requirements for biofuel production.The ruling dealt with targets set by the EPA during the Obama administration. The court dismissed several challenges to those targets but upheld an argument by the advocacy group Americans for Clean Energy that the EPA overstepped its authority under the laws requiring it to set numbers for renewable fuel use."The term 'inadequate domestic supply' refers to the supply of renewable fuel available to refiners, blenders, and importers to meet the statutory volume requirements" and not other market considerations, the court wrote. The EPA should reconsider its reduction of the total renewable fuel volume requirements, a unanimous three-judge panel said.

CMP wants to build 145-mile transmission line through western Maine

Portland Press Herald | Posted on August 1, 2017

Central Maine Power Co. submitted a plan Thursday to build a high-voltage transmission line through western Maine to bring large amounts of hydroelectricity from Quebec to Massachusetts, joining a multibillion-dollar regional competition to develop the next phase of clean-energy projects in New England and eastern Canada. The 145-mile line would follow a corridor owned by CMP from Beattie Township, on the Canadian border north of Route 27 and Coburn Gore, through Farmington and Jay to Lewiston, where it would connect to the regional electric grid.The project cost is confidential, but CMP has confirmed that it’s in the $1 billion range. The total cost would be paid by Massachusetts electric customers. Maine would benefit from construction jobs, added tax revenue and anticipated savings on wholesale energy costs over the 20-year life of the power contract.It’s also possible that a similar line being proposed by CMP and a partner could carry power from new solar and energy-storage projects in western Maine, as well as wind turbines on both sides of the border.

Meet the Rural Pennsylvania Town at the Forefront of Environmental Law

EcoWatch | Posted on July 27, 2017

In 2012, Grant Township became a target for fracking waste. Oil and gas producer Pennsylvania General Energy (PGE) applied for a permit to pump toxic chemicals used in drilling operations into an injection well beneath the community. Residents were alarmed. Injections can induce earthquakes, and wells can leak, contaminating water supplies. The chemicals used in fracking have been linked to cancer, infertility and birth defects.  "We live in an area that doesn't have public water. We all live off springs and private wells," said Judy Wanchism, 74-year-old native of Grant Township. "You ruin our water, our home is no good anymore. Nothing. You have to have water in order to live, to water your plants, to drink, to bathe, everything … I don't know how else to say it. Water is life, and without water, you don't have a life." Wanchism and her neighbors shared their concerns with officials from the U.S. Environmental Protection Agency to no avail. Regulators must listen to the public, but they don't have to take those concerns into account. The EPA issued the permit to PGE. The people of Grant Township couldn't win. "We thought they would protect us. They wouldn't," said Wanchism. "You have to figure out ways to protect yourself, and that is basically what we did." In 2015, a federal judge overturned the part of the ordinance blocking the operation of an injection well. Grant Township, she said, had exceeded its authority as a second-class township. Residents responded by adopting a home-rule charter, which gave the community more legal authority.In an ironic twist, the Pennsylvania Department of Environmental Protection (DEP) is now suing Grant Township, arguing its home-rule charter violates state law. "We shouldn't be fighting the DEP," said Wanchism. "The DEP should be protecting us and helping us."Grant Township is now countersuing the DEP for failing to protect the community. A state court will hear oral arguments this fall. Residents are also dealing with legal fallout of the original ordinance. PGE claims Grant Township owes the company for damages incurred by blocking the injection well.