UTAH COMPANY SETTLES ALLEGED CLEAN AIR ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, March 19, 2015
Utah-Based Washakie Renewable Energy LLC Settles Renewable Fuel Standard Violations

The Department of Justice today filed a stipulation of settlement resolving civil claims against Washakie Renewable Energy LLC (Washakie) for violations of the Renewable Fuel Program under the Clean Air Act.  The stipulation of settlement was filed in the U.S. District Court of the District of Columbia.  A complaint stating the government’s claims was filed at the same time, announced Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Assistant Administrator Cynthia Giles for the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance.

From January to October of 2010, Washakie generated more than 7.2 million renewable identification numbers (RINs) based upon its production of biodiesel at its Plymouth, Utah, facility.  During that time period, however, Washakie did not produce any biodiesel - at the Plymouth facility or anywhere else.  The biodiesel associated with the 7.2 million RINs would have accounted for a reduction of emissions equivalent to more than 30,000 metric tons of carbon dioxide.

The stipulation of settlement requires Washakie to pay a civil penalty of $3 million.  In addition to the penalty, Washakie has already retired more than 7.2 million RINs by purchasing RINs from other parties.  By doing this, Washakie tried to correct the problem it created by putting invalid RINs on the market.  In order to protect the program's integrity and maintain a level playing field for regulated companies, EPA is pursuing enforcement actions against renewable fuel producers and importers that generated invalid RINs.

“The defendant made quite a profit by failing to adhere to the requirements of the Renewable Fuel Program regulations,” said Assistant Attorney General Cruden.  “The penalty here sends the message that renewable fuel producers will be held accountable for meeting all legal requirements.  The Department of Justice remains committed to taking the profit out of illegal activity.”

“This case is another example of the EPA’s commitment to maintain the integrity of the Renewable Fuel Standard program,” said Assistant Administrator Giles.  “Making sure producers are supporting their claims with production of actual renewable fuels is critical to reducing greenhouse gas emissions that are fueling climate change.”

The Energy Independence and Security Act of 2007 expanded and strengthened the Renewable Fuel Program to encourage the blending of renewable fuels into the motor vehicle fuel supply of the U.S. and thereby reduce the nation’s dependence on foreign oil, help grow the renewable energy industry in the United States, and achieve significant greenhouse gas reductions.   Authorized renewable fuels producers and importers could generate and attach credits – known as “renewable identification numbers” or “RINs” – to renewable fuels, such as biodiesel, that they produced or imported.  Fossil fuel refiners and importers are obligated to obtain RINs each year according to the volume of fossil fuels that they put on the market.  These “obligated parties” must purchase RINs or produce them themselves and they are responsible for the acquisition of valid RINs to meet their renewable fuel quotas.  If transferred RINs are invalid, the transferees are liable for failing to satisfy their obligations.  Because certain companies need RINs to comply with regulatory obligations, RINs have market value.  A RIN is invalid if it incorrectly identifies, among other things, the production facility, or the type of fuel produced, or the volume of fuel produced and the regulations prohibit the transfer of invalid RINs.

Washakie registered with the EPA as a renewable fuel producer under the Renewable Fuel Regulations and identified its facility in Plymouth as a renewable fuel production facility.  EPA initially discovered these violations during an inspection of Washakie’s Plymouth facility in 2010.  EPA uncovered additional information concerning the violations in Washakie’s response to information requests and further investigation.  There is no evidence that Washakie produced any biodiesel anywhere during the period covered by the complaint.