RFA Opposes Proposed PES Settlement; Would Allow Refiner ‘to Have its Cake and Sell it Too’

 The Renewable Fuels Association strongly opposes the Environmental Protection Agency’s proposed settlement agreement with Philadelphia Energy Solutions (PES) that would allow the bankrupt refiner to unjustifiably waive the vast majority of its Renewable Volume Obligations (RVOs), it said in comments filed today with the U.S. Department of Justice. The proposed PES settlement agreement, which covers the refiner’s RVOs for January 2016-April 2018, should be rejected “because the terms are patently unfair, unreasonable, and inconsistent with the purposes of the RFS program,” RFA wrote. The U.S. Bankruptcy Court of Delaware has to approve PES’ proposed settlement agreement on April 4. As numerous independent reporters have concluded, the true causes of PES’ financial woes are: rerouting of lower-cost domestic crude oil supplies to Gulf coast refineries, antiquated technology, mismanagement, and lifting of the crude oil export ban.As RFA noted, “By allowing PES to retire only 138 million RINs for its pre-effective date obligation of more than 500 RINs, DOJ and EPA have effectively waived approximately three-quarters of PES’s RVOs for this period….Exacerbating its noncompliance, PES reportedly had been also selling roughly 40 million RINs in the fall of 2017, even as the March 2018 RVO compliance deadline approached. This is a classic case of a regulated entity being allowed to have its cake and sell it, too—while PES seeks to escape from its financial responsibilities under the RFS program, it embraces that same program for the limited purpose of profiting from it,” RFA added.