Renewable energy producer S.G. Preston interested in buying PES refinery

Winds carry a cloud of black smoke from a flare at PES refinery. (Emma Lee/WHYY)

Winds carry a cloud of black smoke from a flare at PES refinery. (Emma Lee/WHYY)

Updated 12:55 p.m. Aug. 30

Philadelphia-based biofuel company S.G. Preston Co. is the first of at least two prospective buyers to publicly express interest in taking over the damaged Philadelphia Energy Solutions refinery to make renewable diesel, marine diesel and jet fuel, according to Reuters.

It could mean a transition from fossil fuel to energy being made from plants and waste.

The company would use part of the plant to make renewable fuels from fats, oils and grease from surrounding communities, sources told Reuters.

“We can use the existing equipment, labor and regional waste streams to show the rest of the country how to bring back our jobs and industries,” Randy LeTang, chief executive of S.G. Preston, said in a Reuters article that appears on the company’s website.

Representatives of S.G. Preston could not immediately be reached for comment Friday.

Philadelphia Energy Solutions’ 335,000-barrel-per-day refinery stopped operations after a fire and explosion in June destroyed the alkylation unit that turns crude oil into gasoline. The company filed for Chapter 11 bankruptcy protection in July and has since been looking for a buyer. Local unions say they have met with two parties interested in bidding on the refinery operation.

Biofuels can be made from any organic matter available, including agricultural crops and trees, wood, plants, grasses, manure, and municipal waste. A biorefinery can process and convert this organic matter into fuels such as renewable diesel and jet fuel, and biodiesel.

S.G. Preston is planning a facility in Ohio with the capacity to produce 120 million gallons per year of renewable diesel and jet fuel from fats, oils and greases. The plant is expected to begin operations in 2020 and be powered by plant oils.

The company’s website mentions “acquiring shuttered or existing refinery facilities scheduled for closure” as part of its business model. The plan is to convert those facilities to 100% renewable biofuels and chemicals and resell to petroleum and chemical partners in need of renewable-energy credits.

About a year ago, LeTang spoke about “a commercial-scale, fully integrated biorefinery” during a panel at Penn State University.

“The great news here is that renewable jet fuel from non-food crop feedstocks is one of the few immediately available options to reduce CO2 emissions in the aviation sector. And this is critical given the growth of aviation sector emissions,” said 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.

“In addition, the PES site is a natural candidate for this type of activity, given the infrastructure in place,” Simeone said.

S.G. Preston is one of the few aspiring commercial-scale advanced non-ethanol biofuel producers in the country, added Simeone, who’s currently pursuing a doctorate in advanced energy systems jointly offered by the Colorado School of Mines and the National Renewable Energy Laboratory.

“Is it still going to be an industrial operation that has emissions? Yes. So is everybody going to love it? Probably not. But in my mind, from an environmental perspective, it’s certainly better than a petroleum refinery,” she said.

Although the renewable-fuel operations would probably take place on a far smaller production scale than PES carried out, the biofuel company has been in conversations with local unions to hire some of their members.

Meenal Raval, a member of the local environmental organization Philly’s Ready for 100, said the proposal looks interesting and could help the city reach its sustainability goals.

“Transforming fats, oil and grease — all waste products, and all renewable —  to use as alternatives to diesel could be a viable alternative to fossil fuel-based diesel, and part of our transition economy towards 100% renewable energy,” Raval said. “Such a project could also help our city’s zero waste by 2035 goal.”

PES did not immediately respond to a request for comment.

Deana Gamble, communications director for Mayor Jim Kenney, said Friday: “The city is not commenting on any expressions of interest in the PES site at this time. We look forward to learning more about any prospective uses for the site in the future.”

About a year ago, RNG Energy Solutions proposed a $120 million biogas plant at the 1,300-acre PES site. That project envisioned the capacity to divert 1,100 tons of regional commercial food waste from landfills, instead turning it into renewable gas using anaerobic digesters.

At the time, environmentalists were cautiously optimistic. A plant like that could have reduced methane from landfills and carbon dioxide by supplying renewable fuels for vehicles.

This article was updated to clarify Christina Simeone’s characterization of S.G. Preston Co.

 

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