RNG Energy Solutions and Philadelphia Energy Solutions Partner to Form Point Breeze Renewable Energy

August 30, 2018

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(Philadelphia Energy Solutions) RNG Energy Solutions (RNG Energy) and Philadelphia Energy Solutions Refining and Marketing LLC (PES) announced today that they have completed and executed several contracts including a long-term renewable natural gas sales agreement and site lease agreement to build a state-of-the-art anaerobic digester facility. The facility will be named Point Breeze Renewable Energy (PBRE) and located at the PES Refining Complex.

RNG Energy will develop and construct the $120 million anaerobic digester facility to produce renewable natural gas, which will be injected into the Interstate Pipeline and sold as a transportation fuel for bus and truck fleets. Permitting and construction of the project is estimated to take two to three years.

Organic waste consisting of grocery, restaurant, and food processing wastes will be processed at offsite locations and delivered in fully enclosed tanker trucks to the PBRE facility. The facility will be designed to process up to 1,100 tons per day of diverted organic waste in eight bioreactors visually similar to the surrounding refinery tankage.

The PBRE facility will be one of the largest carbon reduction, renewable and sustainable resource projects constructed in Pennsylvania. The City of Philadelphia and the broader metropolitan region will be able to manage their organic waste streams by collecting and sending their processed organic material to the PBRE facility, thereby avoiding disposal in landfills and assisting the City in achieving its sustainability goals.

“We have initiated our outreach activities with the broader local leadership, community groups, various elected officials and labor representatives and, as expected, have secured extensive support for this project,” said RNG Energy President, James Potter. “We look forward to sharing the regional environmental benefits of renewable natural gas as well as being an important part of the local community and PES Refinery Complex.”

“We are pleased to partner with RNG Energy to bring a reliable supply of clean energy to the region,” said Mark Smith, CEO of PES. “Adding the capability to produce in-demand green transportation fuel will diversify our offering, generate additional sources of revenue and bring additional jobs to the refinery complex.”

“I’m proud to welcome RNG Energy and its Point Breeze Renewable Energy Project to Philadelphia,” said Mayor Jim Kenney. “The project will bring hundreds of much-needed jobs over its two-year construction, as well as dozens of permanent jobs, and I look forward to seeing this effort move forward.” READ MORE

Philly refiner plans $120M plant to convert food scraps to fuel for trucks and buses (The Philadelphia Inquirer)

Mixed reviews for a proposed $120M renewable-energy plant at South Philly refinery (PlanPhilly/WHYY)

Toomey Invites Top Federal Environmental Regulator To Tour Philly Area Refineries (Office of Senator Pat Toomey (R-PA))

Penn report: City should prepare for S. Philly refinery closure (Philadelphia Inquirer)

$120 million digester set to be built in Philadelphia (Bioenergy Insight)

Excerpt from Philadelphia Inquirer: RNG is developing similar systems in Seattle, Boston and Linden, N.J., aimed at capturing food waste in metropolitan areas, to reduce the distance that the raw material needs to be transported. READ MORE

Excerpt from PlanPhilly/WHYY: Natural gas from the RNG Energy facility could potentially fuel both the city’s and SEPTA’s fleet.

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Matt Walker, advocacy director of the Clean Air Council, a nonprofit that has continuously opposed PES, said that residents need more information about the project, and that state and city agencies must give them the opportunity to engage in the permitting and decision-making process.

“While the project could, in theory, lead to reduced methane from landfills in the region, as well as less carbon dioxide from vehicles that use the fuel, it is unclear if there will be any additional pollution burden to the surrounding community, and if so, how much,” Walker said in an email.

RNG Energy’s Potter said the impact to neighbors would be “unrecognizable.” Food waste coming from restaurants, groceries, food processors, universities, and other institutions in eastern Pennsylvania, northern Maryland, southern and central New Jersey, and Delaware into the facility would never be unpacked there and will be processed in two or three transfer stations off-site (at least one of them would be located in the city). Then it would be pumped into 6,000-gallon tanker-trucks and brought to the facility, where the liquid would be moved into tanks and then into one of eight bioreactors, he said.

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Jo CordonHill, an organizer with Philly Thrive, a local environmental group that opposes construction of the biogas plant, was skeptical about Potter’s statements and, overall, about the refinery’s connection with the project.

Last year, Philly Thrive surveyed the refinery’s neighbors and found that more than half the 314 respondents had either heart disease, cancer, or a respiratory condition. The group attributes local residents' health issues to pollution from the PES refinery. CordonHill said it will work to stop approval of the food-waste facility because it benefits PES, allowing it to comply with the annual Renewable Fuel Standard required by the Clean Air Act.

“I’m definitely in favor of the idea of turning liquid trash into renewable fuel,” CordonHill said. “[But] producing their own natural gas and the creation of this plant on their land will enable them to be financially solid for years to come, which enables them to pollute for years to come. This biogas plant can’t go through unless PES is held accountable for the damages they’ve caused to those living nearby, and to the city as a whole, in terms of pollution.”

CordonHill said that even though PES chief executive officer Mark Smith said the company is pleased to bring clean energy and green fuel for transportation to the region while also adding jobs, the refinery did not commit to reducing its fossil-fuel production or its carbon emissions.

“Even though it looks like they’re doing something good for the planet, ultimately their motive is to solidify their business,” she said.

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In February, PES filed for Chapter 11 bankruptcy, blaming its economic problems mainly on regulatory compliance costs associated with the federal Renewable Fuel Standard (RFS). The program requires that a certain volume of renewable fuel be blended with gasoline to replace or reduce the quantity of petroleum-based transportation fuel. Some refiners mix gasoline with ethanol. Other refiners, like PES, don’t have their own blending operation and buy credits called renewable identification numbers (RINs), whose market is highly volatile.

“This is a smart move for PES, as a merchant refiner, to help manage its escalating RFS compliance obligations,” said Christina Simeone, director of policy and external affairs at the University of Pennsylvania's Kleinman Center for Energy Policy.

Simeone, who has been studying the refinery’s up and downs, said that by creating a long-term renewable natural-gas agreement in house, with credits priced outside the market, PES avoids RIN market volatility, which brings more stability and less uncertainty regarding its compliance costs.

“I’m assuming this project is going to generate D3 RINs,” Simeone said -- higher value RINs coming from cellulose-based biofuel that can be used to meet other categories of compliance for advanced biofuel with a higher greenhouse-gas-reduction threshold. “That would help the refinery reduce its cost [because] D3 RINs are very expensive in the market. Assuming that, this is a very, very smart investment on their part.”

Neither RNG Energy president Potter nor PES spokeswoman Cherice Corley would say how many RINs the new facility would generate, but Potter said all of them would go to PES.

Corley told PlanPhilly that the project would generate some RINs but not enough to comply with the requirement. “The project does not solve the flawed RFS for PES,” she said in an email.

Ultimately, Simeone said, the refinery faces many other challenges on top of the increasing cost of complying with the RFS requirements: access to cheap domestic crude oil; aging technology and increased competition from modern refineries; and its debt. READ MORE