EPA, Justice Dept. announce new complaint and settlement over RFS

Source: By Sara Wyant, AgriPulse • Posted: Friday, October 7, 2016

WASHINGTON, Oct. 6, 2016 – EPA and the Department of Justice filed a complaint Tuesday against NGL Crude Logistics LLC and Western Dubuque Biodiesel LLC as well as announcing a settlement with Western Dubuque to address alleged violations of the Renewable Fuel Standard.

The complaint, filed in the U.S. District Court for the Northern District of Iowa in Cedar Rapids, alleges that NGL, which purchased the equity interests of Gavilon LLC in 2013, entered into a series of transactions with Western Dubuque in 2011 that resulted in the generation of approximately 36 million invalid renewable identification numbers, or RINs. RINs are credits created when a company produces qualifying renewable fuel and can be traded or sold to refineries and importers to use for compliance with renewable fuel production requirements.

Western Dubuque owns and operates a 30 million gallon biodiesel plant in Farley, Iowa. NGL is an energy service company that transports fuel and other products.

Western Dubuque agreed to pay $6 million to resolve alleged Renewable Fuel Standard program violations in 2011 for generating RINs for renewable fuel that was produced using unapproved feedstocks and production processes.

“The Department of Justice is committed to maintaining the integrity of the Renewable Fuel Standard program,” U.S. Attorney Kevin Techau for the Northern District of Iowa said in a release. “Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent. This $6 million settlement supports that goal.”

NGL is not a part of this settlement. EPA and Justice have filed a lawsuit against NGL, and will ask the court to require NGL to retire 36 million biomass-based diesel RINs to offset the harm caused by its alleged violations, and to pay a substantial civil penalty.

EPA estimates that the generation of the second set of RINs alleged in this case resulted in excess greenhouse gas emissions equivalent to 151,319 metric tons of carbon dioxide.

The settlement with Western Dubuque is subject to a 30-day public comment period and final court approval.