Delaware, regional leaders take on Trump's EPA

Area oil refineries, union leaders, a Republican lobbying firm and Delaware Gov. John Carney are joining forces to take on President Donald Trump.

The strange bedfellows gathered outside the Delaware City Refining Co. on Monday to pressure the Trump administration into tweaking a federal renewable fuel program they say is threatening hundreds of refining jobs throughout the region.

"The [U.S. Environmental Protection Agency] has the ability to make changes and their lack of willingness to do so is really the crux of the problem," said Matt Lucey, president of refinery owner PBF Energy. "Not only is the swamp not drained, but you have very powerful lobbyists who are hijacking the administration."

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PBF Energy and other independent refinery owners are pushing back against the ballooning cost of the biofuel credits the EPA requires them to purchase under the Renewable Fuel Standard.

Those rules say oil refiners can either blend biofuels, like ethanol, with the gasoline and other petroleum products they produce or purchase credits called Renewable Identification Numbers, better known as RINs, from a company that does do blending.

When the Renewable Fuel Standard was created in 2005, those RINs cost just pennies per gallon. But they are now costing "merchant refiners" such as PBF several hundred million dollars a year.

The opaque RIN market, they say, is now subsidizing RIN sellers – multinational oil companies with substantial blending capacity – while threatening to close "merchant refiners" that need to buy the credits.

PBF – which owns five refineries – spent more than $300 million on RIN credits last year, while Monroe Energy – owner of the Trainer Refinery in Delaware County, Pennsylvania – spent more than $200 million, executives of the two companies said Monday.

PBF finished 2016 with $171 million profit and Monroe Energy, which sells jet fuel to its parent company Delta Air Lines, finished the year with $1 billion.

Still, those refineries had high hopes President Trump would rein in RIN costs, especially after he tapped billionaire CarlIchan, who owns a merchant refinery, as a special economic adviser on financial regulation.

RIN prices did fall early this year, only to soar 200 percent this fall – a swing that has renewed demand for reform amid refinery's claims that their ability to stay afloat and continue employing hundreds of workers is being threatened.

That's an especially powerful warning in Delaware, which saw Valero Energy close the state's only refinery in 2009, leaving hundreds of workers jobless at the height of the Great Recession. The shuttered facility was later sold to PBF Energy and now employs 550 workers along with several hundred contractors.

"This is about your jobs," Carney told refinery workers who gathered at Monday's press conference, an event organized by the Washington, D.C.-based Republican lobbying firm CGCN Group.

"This is a regulation that was well intended and is well intended, but is getting in the way," he said, while wearing a T-shirt emblazoned with "RINsanity." "We need a smarter approach."

Mike Carr, executive director of a lobby group pushing for clean energy jobs in rural America, claims PBF Energy is simply seeking special treatment and handouts.

"PBF Energy is reporting record profits and returning millions to shareholders," he said. "But instead of investing in infrastructure to comply with federal clean energy laws, they're looking for a bailout from the federal government."

The Renewable Fuel Standards, he said, ensure jobs for thousands of rural families, particularly corn farmers whose crops are used to created ethanol and whose livelihoods Trump has vowed to protect.

Carney said pitting refinery jobs against farm jobs is "a false choice."

He also dismissed questions about any conflict between his support of the Delaware City Refinery's position and the company's efforts to avoid paying a $150,000 fine for violating a state order that only allows the plant to ship crude oil to a sister refinery in Paulsboro, New Jersey.

The Delaware Department of Natural Resources and Environmental Control handed down the penalty in March after ruling the refinery had "concealed" 17 barge shipments that went to three other destinations in 2014.

PBF Energy admits it made the shipments but disputes that notion that it did anything wrong. A hearing on the company's appeal is scheduled for Feb. 27.

"My focus is on making sure the refinery runs according to the regulations ... This rally today was about a federal regulation that is impacting their ability to operate at all," he said. "Does it require some balancing? For sure. Just about everything we do requires some sense of balance."

Contact reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel.