Former PES refinery CEO Rinaldi says he wants to make renewable fuels at the complex

Updated: 6:19 p.m.

Philadelphia Energy Solutions founder and former CEO Phil Rinaldi wants his refineries back.

On Wednesday, Rinaldi announced the creation of a new company, Philadelphia Energy Industries, to buy the 1,300-acre site in South Philadelphia and restart the Point Breeze and Girard Point refineries, rehiring some former PES employees.

The refinery complex shut down after a massive fire and explosion damaged parts of it in late June, and most of the union workers have been let go. PES is currently in Chapter 11 bankruptcy proceedings for the second time in less than two years.

Rinaldi wants to fix that.

“I view PES as my child, and it’s laying there in the ground with the bloody nose right now,” he said in an interview Wednesday afternoon. “The goal is to own it, revitalize the refineries, and to kind of make this site the sort of industrial jewel that it really ought to be here in the area.”

Rinaldi said he can’t give his business plan away, but it involves continuing to operate the refineries, change some of the products to meet the changing demands in the region, and put more emphasis on the production of chemicals.

His new company has entered into a mutual cooperation agreement with RNG Energy Solutions, which is in the process of obtaining permits for a $120 million anaerobic digester facility proposed last year. If it comes to pass, that facility would produce renewable natural gas for buses and trucks from 1,100 tons of regional commercial food waste on 23 acres at the PES site.

RNG’s plan includes creation of a 78-acre, 10-megawatt solar project and a facility to produce 100 million gallons-plus of renewable diesel fuel per year, from fats, oils and greases.

“We think the refinery is well positioned to start up and operate properly, and the facilities that we want to invest in and develop there, and operate, will complement the refinery operations,” said James Potter, president of RNG Energy. “When we use solar energy for the power requirements of the anaerobic digester project, it dramatically improves the carbon index ration and we actually get a higher value for the fuel that we produce.”

Potter said the renewable diesel facility won’t use edible vegetable oils, ethanol or food.

“Long term, people will be transitioning into more renewable fuel, and we think that this is a good transition project that combines both the refinery operations and a sustainable renewable solution,” he said.

Rinaldi said he will “cooperate and stimulate” those developments, but he made it clear that RNG is not driving his desire to buy the PES complex or start a new company.

“The fact that they’re green energy is terrific, we want to do that, but we’re also in business for being in business, and so we’re going to do what makes good business sense,” he said. “It makes sense to do those projects, but they still remain the tail, not the dog. They are a smaller portion of what that future business would be.”

On Tuesday night, environmental experts and activists urged the city to stay away from fossil fuels and instead create a clean energy hub at the PES complex. That recommendation came during a meeting of the Refinery Advisory Group, the fourth in a series of meetings set up by the city in the aftermath of the fire to discuss the impact of the refinery’s closure on the local economy, the environment, public health, and safety.

Environmental concerns — pollution from the refinery and the health hazards its neighbors attribute to it — have dominated all four meetings of the advisory group to date, along with the loss of about 1,000 union jobs with the refinery’s closure.

Last week, Philadelphia-based biofuel company S.G. Preston Co. said it was interested in taking over the refinery operations to make renewable diesel, marine diesel and jet fuel, according to a Reuters report posted on the company website.

Representatives of S.G. Preston did not immediately respond to requests for comment. The company would use part of the plant to make renewable fuels from fats, oils and grease from surrounding communities, sources told Reuters. Biofuels can be made from any organic matter available, including agricultural crops and trees, wood, plants, grasses, manure, and municipal waste.

But acquisition of the PES refinery by anyone, including the two businesses that have now declared themselves to be suitors, would be subject to the approval of U.S. Bankruptcy Court in Wilmington.

Joe Minott, executive director of Philadelphia Clean Air Council, said he doesn’t trust Rinaldi’s new green intentions.

“I don’t think Mr. Rinaldi has any idea what going green means, what clean energy means, and I would not trust that he would really move forward with something that was acceptable to the community and would benefit the environment in the Philadelphia area,” Minott said.

“Phil Rinaldi would be a terrible choice to do anything with the old refinery,” he added. “While he was a head of PES, I think he essentially destroyed the company and created the mess that it is today.”

Christina Simeone, a senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy who has authored multiple reports on the PES refinery, said Rinaldi’s plans are “laudable” for recognizing the industry and that consumers are moving towards clean energy.

“However, modernizing the refinery will be extremely expensive, and it will remain dependent on higher cost feedstock, a disadvantage in the market. I just don’t know who will be willing to invest at the level required to realize these grand plans,” she said.

Ryan O’Callaghan, president of United Steelworkers Local 10-1, which represented union workers at the refinery, said he had many conversations with Rinaldi and thinks his proposal is very promising.

“We’re familiar with Phil, he’s a good man. He had a vision last time [when he created PES], and it seems like he has a vision this time,” O’Callaghan said.

Rinaldi retired as chief executive of Philadelphia Energy Solutions in 2017.  He was head of the company when the private equity firm Carlyle Group bought the refineries from Sunoco.