The owner of the largest East Coast oil-refining complex is filing for bankruptcy and blaming an Environmental Protection Agency (EPA) biofuel mandate.
Philadelphia Energy Solutions (PES), owner of two refineries, announced the news to employees Sunday in an internal memo obtained by Reuters.
The bankruptcy comes just six years after PES was financially rescued by the Carlyle Group, a private equity firm, and petroleum company Sunoco.
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 memo was confirmed to Reuters by a spokeswoman for PES.
The two refineries operated by PES are equipped to convert about 335,000 barrels of crude oil per day into gasoline, jet fuel and diesel.
Money strains of having to adhere to the EPA’s Renewable Fuels Standard are listed as partly to blame.
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.
PES chose the later 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.
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Owner of largest East Coast oil refinery files for bankruptcy, blames EPA biofuel standards: report https://t.co/QZ8a8R3SH6 pic.twitter.com/JJPzH2KVgH
— The Hill (@thehill) January 22, 2018
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