NGL Crude Logistics LLC Agrees to Pay $25 Million Civil Penalty and to Retire $10 Million in Renewab

[nitpicker]

https://www.justice.gov/opa/pr/ngl-crude-logistics-llc-agrees-pay-25-million-civil-penalty-and-retire-10-million-renewable

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Thursday, September 27, 2018

NGL Crude Logistics LLC Agrees to Pay $25 Million Civil Penalty and to Retire $10 Million in Renewable Fuel Production Credits Under Settlement With United States

The Department of Justice and the Environmental Protection Agency (EPA) today announced a settlement with NGL Crude Logistics, LLC that requires the company to retire 36 million renewable fuel credits and pay a $25 million civil penalty under the settlement to resolve violations of the Renewable Fuel Standard (RFS) program. The cost of the RIN retirement is approximately $10 million.

The Department of Justice and EPA alleged that NGL entered into a series of transactions with Western Dubuque Biodiesel, LLC in 2011 that resulted in the generation of an extra set of renewable fuel credits for approximately 24 million gallons of biodiesel. NGL’s scheme generated approximately 36 million additional credits, known as Renewable Identification Numbers or RINs. RINs are 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. On July 3, 2018, the United States District Court for the Northern District of Iowa found NGL liable for: (1) failing to retire RINs when it designated and sold biodiesel to Western Dubuque as “feedstock” for the production of biodiesel, (2) causing Western Dubuque to generate invalid RINs and commit other prohibited acts under the RFS program, and (3) transferring approximately 36 million invalid RINs to other entities.
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The United States’ complaint alleged that in 2011, NGL purchased millions of gallons of biodiesel on the open market, and that approximately 36 million RINs had been assigned to the biodiesel. NGL sold most of the RINs to other entities. NGL then sold the biodiesel to Western Dubuque, but designated it as a “feedstock.” Western Dubuque reprocessed the biodiesel provided by NGL and generated a second set of RINs for the same fuel. Western Dubuque sold the reprocessed biodiesel and the second set of RINs back to NGL. NGL then sold most of these RINs to other entities. Western Dubuque resolved its alleged violations of the RFS program in a 2016 settlement with the United States.

EPA discovered the violations through a tip from RFS program participants, an inspection, and extensive investigation into the NGL transactions.
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NGL is a midstream energy provider headquartered in Tulsa, Oklahoma that transports crude oil, and markets and supplies refined products, natural gas liquids, and other products. NGL was known as Gavilon, LLC at the time of the violations.
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