Valero Energy Corp. (NYSE:VLO), America’s largest oil refiner, has been conducting a behind-the-scenes campaign to rid refiners of the costly biofuel blends mandate by the U.S. government. Billionaire Carl Icahn, who also heads oil refiner CVR Energy (NYSE:CVI), has been a big part of these efforts.
Valero has been coordinating lobbying efforts to get the Trump administration to revise the Renewable Fuel Standards (RFS) governing gasoline and diesel. The refiners and its allies are asking Trump to transfer the “point of obligation” for blending biofuels, such as 10 percent corn ethanol into gasoline, away from refineries and over to gasoline retailers and shippers such as FedEx (NYSE:FDX). That comes from an investigative report from Reuters involving interviews with two former Valero executives who spoke to the media outlet.
The point of obligation requirement has been costing refiners a great deal under rules enforced by the U.S. Environmental Protection Agency (EPA). The federal rules, which go back to a bill signed in 2005 by then president George W. Bush, forced Valero to spend about $750 million last year buying RFS credits.
