Biggest East Coast refiner files for bankruptcy

[thackney]

Biggest East Coast refiner files for bankruptcy
http://www.chron.com/business/energy/article/Biggest-East-Coast-refiner-files-for-bankruptcy-12515615.php
January 22, 2018

Philadelphia Energy Solutions LLC, owner of an oil refinery that supplies more than a quarter of the U.S. east coast's crude refining capacity, filed for bankruptcy with a plan that could allow it to shed some environmental costs.

The restructuring would allow PES to emerge a new company with the same stakeholders, according to the firm's chief executive. Court filings show it intends to do so through a sale that will erase $300 million to $350 million of compliance costs. Those expenses helped spur the Chapter 11 filing by PES, which runs the largest oil refinery serving the New York Harbor gasoline and diesel market. It's a joint venture between Carlyle Group LP and Energy Transfer Partners LP subsidiary Sunoco Inc.

The compliance costs include "renewable identification numbers" or RINs, which the company was forced to buy under a federal program that has cost $832 million since 2012, the court filing shows. The purchases create an "unpredictable, escalating and unintended compliance burden" that amount to twice the cost of payroll and almost 1-1/2 times capital expenditures, the company said.

"Absent RINs, we're competitive with anyone in the world," Chief Executive Officer Greg Gatta said in telephone interview Monday....

[endicom]

Because they are not equipped to include biofuels. Amazing.

[IsailedawayfromFR]

Because they are not equipped to include biofuels. Amazing.

That may be the case, but there may be more here than meets the eye.

I recall while working for another company an evaluation of selling off an old East Coast refinery due to low margins, as Sunoco successfully did in 2012 to a newly formed company PES.  Since it was around for many, many years, the stumbling point of any sale was the environmental liability of the refinery which the new would not absorb.  The cleanup bill was worth more than the entire refinery.

Using bankruptcy to thwart government-mandated laws seems fishy to me.  If they are successful, look for others to undertake an end-around like this.

At the very end of this, who do you think takes it on the chin for erasing $300 million in credits?  It is not the company nor its parent companies.  Won't be the creditors either, most likely.  Looks to me it is those who adher to the RIN credit schemes, and, most importantly, us taxpayers.

[GrouchoTex]

I was thinking that PES was the old Sun Refinery...

[Suppressed]

Using bankruptcy to thwart government-mandated laws seems fishy to me.  If they are successful, look for others to undertake an end-around like this.

At the very end of this, who do you think takes it on the chin for erasing $300 million in credits?  It is not the company nor its parent companies.  Won't be the creditors either, most likely.  Looks to me it is those who adher to the RIN credit schemes, and, most importantly, us taxpayers.

 

Whether it's letting in illegal labor with taxpayers picking up benefits or evading responsibilities, the taxpayer is being forced to pick up costs of businesses.  This is similar to how the Italian Fascists operated.

[Suppressed]

I was thinking that PES was the old Sun Refinery...

Yes... Girard Point and Point Breeze