Owner of Largest East Coast Oil Refinery Allegedly Files for Bankruptcy
January 24, 2018 in News by RBN Staff
Is the Environmental Protection Agency (EPA) after our oil refineries? It’s hard to say, but the owner of the largest East Coast oil refinery has allegedly filed for bankruptcy and says it’s the EPA’s fault.
On Sunday, Philadelphia Energy Solutions alerted their employees about the changes to come via an internal memo that was accessed by Reuters.
This closure comes just six years after they had financial troubles and had to be rescued by Carlyle Group and Sunoco.
According to the news source, the bankruptcy memo was confirmed by a spokeswoman for the company, and that trying to comply with the EPA’s Renewable Fuels Standard was one of the biggest reason they were hurting for money.
The internal memo told employees, which currently number 1,100, that in a new agreement with creditors the company secured $260 million in financing, adding the bankruptcy filings would have no immediate effect on workers. About $75 million of the new funding comes from Sunoco Logistics.
The two refineries, operated by Philadelphia Energy Solutions, are equipped to convert about 335,000 barrels of crude oil per day into gasoline, jet fuel and diesel.
The Bush-era biofuel law mandates that either refiners blend biofuels made from ethanol into their fuel supply or they have to buy credits from companies that do.
Philadelphia Energy Solutions chose the latter route and since 2012 has spent more than $800 million on credits to keep up with the law. According to the memo, the credits were the company’s second-largest expense next to the purchasing of crude oil.
Company CEO Greg Gatta said, “We will continue to work with the government to address the broken RFS system that is harming smaller, independent merchant refiners like PES. This is a win for the region, the Commonwealth of Pennsylvania and the City of Philadelphia.”
However, just because they are out of the count doesn’t mean all oil refineries are. According to the U.S. Energy Information Administration, oil production will expand by a million barrels a day in 2018. If that is accurate, it will be a chart topper.
Last week, Fatih Birol, executive director of the International Energy Agency, said he foresees the United States becoming the “undisputed leader” in oil and gas production for “years to come.”
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