Ethanol interest group Growth Energy has filed a protest against a proposed settlement that would forgive about half of Philadelphia Energy Solutions' $350 million biofuels credits obligations in the Renewable Fuel Standard, according to comments filed with the U.S. Department of Justice on Thursday.
In recent weeks the U.S. Environmental Protection Agency filed the proposed settlement in bankruptcy court as part of the refiner's Chapter 11 bankruptcy filing. In that filing the company alleges the renewable identification numbers, or RINs, obligation was a primary reason for its financial challenges.
Growth Energy filed its comments just ahead of the deadline of a 10-day public comment period that ends on March 26.
"The proposed settlement sends the wrong message to industry stakeholders, implying that there are no consequences for violating the law," Growth Energy Chief Executive Officer Emily Skor said in a statement. "The Carlyle Group pulled hundreds of millions of dollars out of the company and failed to make the clean energy investments that have allowed other refiners to thrive. The EPA should not reward the Carlyle Group by allowing PES to escape more than 70% of its obligations under the Clean Air Act.
"If this sue-and-settle-style settlement is approved, it sends a terrible message to investors who have played by the rules. With farm income at a 12-year low, rural America can't afford another handout to refinery owners."
The Carlyle Group is invested in Philadelphia Energy Solutions.
Growth Energy makes a number of points in its comments:
-The settlement allows PES and its parent companies to "substantially avoid" their environmental obligations by accepting retirement of 138 million RINs for the 2016 and 2017, as well as the first quarter of 2018 of 467 million RINs "plus the obligation PES incurs in the first quarter of 2018, likely totaling well over 500 million RINs. That is a discount of more than 70%."
-The proposed settlement allows PES to carry 64.6 million RINs forward as a credit toward 2018 compliance. It also gives PES a "head-start advantage for 2018 compliance, in front of competitors who have been complying with the law."
-"The proposed settlement would resolve the RVO liability not only of the PES debtors, who have asserted that they lack the financial wherewithal to meet their obligations, but it would also give a free pass to non-debtor entities who are clearly liable for the RVO obligations including the debtors' parent companies and joint venture partners," Growth Energy said in a news release.
Read Growth Energy's comments here: http://bit.ly/…
Todd Neeley can be reached at firstname.lastname@example.org
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