Companies cited by EPA for fraudulent biofuel credits
Energy and financial companies caught up in a scheme involving fraudulent renewable energy credits could now face civil fines from the EPA.
Tue, Nov 15, 2011 at 04:05 PM
VIOLATIONS: The EPA has issued 24 notices of violation to more than a dozen companies, including units of Exxon Mobil, Royal Dutch Shell and Morgan Stanley, for the use of invalid renewable identification numbers. (Photo: ZUMA Press)
WASHINGTON, D.C. - Energy and financial companies caught up in a scheme involving fraudulent renewable energy credits could now face civil fines from the U.S. Environmental Protection Agency.
The EPA has issued 24 notices of violation to more than a dozen companies, including units of Royal Dutch Shell, Exxon Mobil and Morgan Stanley, for the use of invalid renewable identification numbers, or RINs, according to the EPA website.
To encourage renewable fuel output, the government requires U.S. oil companies to produce a certain amount of renewable fuel, or to purchase the RIN credits from producers of renewable fuels.
The companies were cited by EPA for using fake credits purchased from Clean Green Fuel LLC. That company's owner, Rodney Hailey, has been charged with carrying out a $9 million scam involving the distribution of 32 million invalid credits.
Under the Clean Air Act, the EPA can assess fines of up $37,500 a day per violation for companies using the invalid credits, in addition to the economic benefits or savings that resulted from the violations.
The EPA said in a statement that it was in discussions on how to move forward with each company that was issued a notice of violation and with industry officials on the issues raised by invalid renewable energy credits.
"Enforcement of the renewable fuel requirements helps protect the program's integrity and maintain a level playing field for regulated companies," the agency said.
Shell said it is working with the agency to resolve this matter.
"When these RINS were purchased, they were believed to be valid," Shell spokeswoman Jill Davis said in a statement.
Exxon Mobil referred comments about the notices to industry trade groups, the American Petroleum Institute and the National Petrochemical and Refiners Association.
API and NPRA sent a letter to EPA earlier this month expressing concerns about fraudulent renewable energy credits.
"Obligated parties that purchase invalid or fraudulent RINs have little means of discovering the problem, and are potentially faced with penalties for non-compliance with (Renewable Fuel Standard) requirements if the RINs are later deemed to be invalid," the groups said.
Morgan Stanley declined to comment on the notices.
For a full list of companies that received notices, please see: http://link.reuters.com/kur94s
Copyright 2011 Reuters Environmental Online Report