Guest essay by Eric Worrall
h/t Willie Soon – the hangover of President Obama’s war on cheap energy is still causing financial hardship. Philadelphia Energy Solutions, which employs 1,100 people, has been driven into financial distress by the cost of compulsory green energy mandates.
Exclusive: Philadelphia Energy Solutions to file for bankruptcy – memo
Jessica DiNapoli, Jarrett Renshaw
5 MIN READ
(Reuters) – Philadelphia Energy Solutions LLC, the owner of the largest U.S. East Coast oil refining complex, announced to its employees on Sunday that it plans to file for Chapter 11 bankruptcy, according to an internal memo reviewed by Reuters.
The bankruptcy would come six years after private equity firm Carlyle Group LP (CG.O) and Energy Transfer Partners LP’s Sunoco Inc rescued Philadelphia Energy Solutions from financial distress, in a deal that was supported by tax breaks and grants that saved thousands of jobs.
Following an agreement with its creditors, the company has secured access to $260 million in new financing, and said it expected the bankruptcy filing to have no immediate impact on its employees, according to the memo, which was confirmed by a spokeswoman for Philadelphia Energy Solutions. The spokeswoman declined to comment further.
Philadelphia Energy Solutions owns two refineries, Girard Point and Point Breeze. It can convert about 335,000 barrels of crude oil per day to products such as gasoline, jet fuel and diesel. It employs about 1,100 people.
Part of the refiner’s financial troubles stem from a costly biofuels law called the Renewable Fuels Standard, which is administered by the Environmental Protection Agency and requires refiners to blend biofuels into the nation’s fuel supply every year, or buy credits from those who do.
Since 2012, Philadelphia Energy Solutions has spent more than $800 million on credits to comply with the law, making it the refiner’s biggest expense after the purchase of crude, according to the memo.
Obviously our hearts go out to the workers, who must by now be wondering when their paycheques will stop. But this story has wider implications – how many other US energy businesses are close to the brink, thanks to the lingering after effects of President Obama’s green energy mania?
Former Obama EPA head Gina McCarthy once boasted that Trump has “Limited Room to Manoeuvre” – Gina claimed her EPA administration had created a tangled thicket of green court rulings and regulations which she thought would be impossible for President Trump to clear away. The evidence suggests that Gina might have been right – despite President Trump and Scott Pruitt‘s best efforts, a year after President Trump’s election the EPA is still causing totally unnecessary hardship and financial distress for major US businesses.
I suggest it is time to consider more radical surgery, time to end this ongoing menace to US prosperity once and for all.