A federal bankruptcy court in Delaware approved an agreement in which the US Department of Justice and Environmental Protection Agency relieved Philadelphia Energy Solutions Refining & Marketing LLC of some of its federal biofuel quota obligations from 2016 through this year’s first quarter to keep PES’s two refineries open and operating.
The Apr. 4 decision came more than 2 months after PES sought Chapter 11 bankruptcy protection to restructure debt and secure new capital (OGJ Online, Jan. 23, 2018). “In order to complete this process without delay, we will continue to work with the government to address the broken [Renewable Fuel Standard] system that is harming smaller, independent merchant refiners like PES,” PES Chief Executive Greg Gatta said at the time.
In an Apr. 4 statement, PES called the approved settlement “another important milestone in our quest to strengthen our financial foundation and ensure that PES can successfully emerge from the restructuring process.” An overwhelming number of the more than 1,700 comments DOJ received supported the settlement when it was proposed, the refiner said.
PES operates two refineries—Girard Point and Point Breeze—in South Philadelphia, with a combined 335,000 b/d of processing capacity.
Two fuel ethanol advocacy groups criticized the court’s decision. “We are disappointed the court declined to consider our objections,” said Emily Skor, chief executive at Growth Energy in Washington.
“It is frustrating to learn the court has approved a government-sponsored bailout for PES,” Renewable Fuels Association Pres. Bob Dineen separately said. “The court has essentially allowed PES to be let off the hook for three quarters of its [Renewable Volume Obligations], while simultaneously carrying forward 64.6 million [Renewable Identification Numbers] to satisfy future 2018 RVO obligations.”
Contact Nick Snow at [email protected].
