EPA Rules May Impact Viability of Refineries

August 14, 2013- Concern is growing that credits for compliance may be costing Pennsylvania refineries dearly – and potentially placing their operations in peril.



Legislators, corporate and union officials are trying to motivate the Environmental Protection Agency (EPA) to take action to stabilize pricing on a compliance credit called Renewable Identification Numbers.
The Renewable Fuel Standard was enacted in 2005 and required refiners to blend a minimum amount of renewable fuel with gasoline and diesel. Targets must be met and are calculated based on a credit system. These credits can be traded among various entities.



Yet as more ethanol has been blended into gasoline and diesel, the supply of credits has decreased, causing prices to soar from 2 to 4 cents a gallon last year to $1.37 recently.



“It’s literally putting the sustainability of the refinery back in jeopardy,” said Jim Savage, president of the United Steelworkers Union Local 10-1.

His refinery in Southwest Philadelphia was one of three slated to close in September 2011 as Sunoco Inc. officials announced their intent to exit refining. Thousands of jobs and more than $500 million in state and local tax revenues were at risk. Officials, union and corporate representatives came up with solutions to preserve the facilities. By mid-summer last year, Philadelphia Energy Solutions had been formed as a joint venture of The Carlyle Group and Sunoco Inc. to run the Philadelphia refinery.

U.S. Rep. Patrick Meehan, R-7, of Upper Darby, along with other representatives, wrote a letter to the EPA.

“The delegation is once again operating diligently to fight this problem,” Meehan said. “We are ... directly appealing to the EPA administrator in her rule-making to account for this anomaly and to use her discretionary authority to bring it down to a real market price.”



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