Philadelphia Energy Solutions LLC, owner of the largest oil refinery serving the New York Harbor gasoline and diesel market, filed for Chapter 11 bankruptcy protection.
The company, a joint-venture between The Carlyle Group LP and a subsidiary of Energy Transfer Partners LP, filed a petition Sunday in U.S. Bankruptcy Court in Delaware. Chief Executive Greg Gatta said in a memo obtained by Bloomberg News that the company had a prepackaged reorganization plan and cited the more than $800 million it paid since 2012 to comply with the U.S. government’s Renewable Fuel Standard as a key factor for the decision.
The company’s debt is between $1 billion and $10 billion, it said in its filing, without providing further details in its initial petition.
Independent U.S. refiners that lack the infrastructure to blend biofuel into gasoline and diesel have been hit hard by surging costs for the credits they must buy to meet Environmental Protection Agency quotas for ethanol and biodiesel. The Trump Administration in late November rejected a bid by fuel-makers including Valero Energy Corp. to relieve refiners of the obligation. Billionaire Carl Icahn, the majority owner of CVR Energy Inc., has complained that the program structure is “rigged.”