The Carlyle Group’s Philadelphia Energy Solutions (PES) is an oil refinery in South Philadelphia at 3144 W Passyunk Ave, Philadelphia, PA. The facility has a footprint of 1,300-1,400 acres and sits on the Schuylkill River just above its confluence with the Delaware River.  The oldest portion of the facility started petroleum-related activities in the 1860s; the facility currently produces fuels and basic petrochemicals for the chemical industry.  Carlyle owns about 70% of PES, having formed a partnership with Sunoco, the previous owner, in 2012.

PES is the 10th largest oil refiner in the US, processing 335,000 barrels (14 million gallons) of crude oil per day and the largest oil refinery on the East Coast.  It is also the largest crude unloading facility on the East Coast and contains the largest crude by rail yard in the nation.  The facility operates 24 hours a day, 7 days a week, 365 days a year and is the largest single consumer of Bakken Crude from North Dakota, with the capability of unloading 21 unit trains a week (4 unit trains a day).  The facility contains the Girard Point and Point Breeze refineries and the Schuylkill River Tank Farm.

The facility had $13.8 Billion in sales during the fiscal year ending September 2014.  PES is pursuing an Initial Public Offering (IPO) of a Master Limited Partnership (MLP); such a partnership would shield PES’s income from virtually all corporate taxation. In August 2015, PES cancelled its planned offering of shares of Class A common stock, reportedly due to “market conditions”.

The facility has the following air emissions sources: 3 boilers > 100 MMBTU/hr, heaters, 36 process heaters, seven flares, cumene tank truck loading, benzene railcar unloading, propane loading, 2 Claus sulfur recovery plants, 8 cooling towers, storage tanks, marine barge loading, 2 fluid catalytic cracking units, inter-refinery pipeline equipment, 2 alkylation units, hydrogen purification, degreasing vats, a butane isomerization unit, wastewater sources, a benzene production unit, a cumene production unit, emergency generators, internal combustion units, and fugitives.

PES is classified by the EPA as a “High Priority Violator” because of the types of violations incurred and the need to remedy these violations “quickly”.  PES has a unit that has been considered a High Priority Violation (HPV) since 4/1/12 because of its emissions of VOCs, visible emissions, fugitive emissions, particulate matter, and carbon monoxide.

In 2013, PES was by far Philadelphia’s largest emitter of all criteria pollutants, except lead.  

Criteria Pollutant PES Next Largest Emitter
CO 1694.95 66.49
NOx 1470.74 230.5
PM10 482.28 68.67
PM2.5 482.28 54.77
SO2 442.66 25.57
VOC 680.16 112.24

Emissions in tons.

PES is responsible for 72% of the toxic releases in Philadelphia, according to the EPA.  These releases place them among the top toxic emitters in the petroleum industry nationwide. In addition to a host of highly toxic air pollutants, toxic releases to water from PES include significant amounts of phenol, lead compounds, and antimony compounds, to name a few.   The three-year compliance report (Oct. 2011- Sept. 2014) rated PES in “significant noncompliance” with several environmental permits, including clean water permits and eleven formal enforcement actions in the prior five years, some resulting in substantial fines. These violations include exceeding water permit limits for carcinogenic benzene, sulfide, and oil and grease. PES’s air and water toxic releases approached 500,000 pounds in 2014, primarily in the form of air emissions.  

PES was most recently served with a Notice of Violations (NOVs) on 4/23/15 and 5/14/15.  The 4/23/15 NOV listed five areas of noncompliance, two of which are related to the concentration of certain emissions allowed to leave the facility over discrete time periods, as required under the facility’s federal consent agreement (exceedance of hourly/daily concentrations and concentration exceedance). PES’s 2012 air-related violations resulted in fines of $170,820. Violations included: Flare smoking events, failure to follow maintenance/operating procedures, odor violations resultant from improperly sealed wastewater drums, unit shut downs causing flare opacity, and CO emissions exceedances, inter alia. PES’s 2013 air-related violations resulted in fines of $155,500.  Violations from 2012 included: Flare smoking events, separator overflows, odor violations, and CO emissions exceedances, inter alia.

The refinery has been out of compliance with the Clean Air Act for all 12 of the last reporting quarters, (a total of three years).  In the past 3 years, the facility has had 6 unanticipated bypasses of industrial wastes directly to the Schuylkill River, totaling 50 hours and 45 minutes.  PES has also had hundreds of storage tank deficiencies, the most common of which were coating failure, corrosion, pinhole rusting, and damaged insulation, with some resulting in Notices of Violation.