WASHINGTON – A Tulsa, Oklahoma, oil company, NGL Crude Logistics will retire 36 million biodiesel credits, called Renewable Identification Numbers, worth approximately $10 million and pay a $25 million civil penalty under a settlement to resolve violations of the Renewable Fuel Standard program, the U.S. Department of Justice (DOJ) has announced.
NGL Crude Logistics, which was known as Gavilon at the time of the violations, committed fraud by generating Renewable Identification Numbers on batches of biodiesel that it sold back to the fuel producer, Western Dubuque Biodiesel. NGL then claimed a total of 36 million new RINs on the same fuel under later deals, according to DOJ.
Western Dubuque also paid $6 million in its own civil settlement, bringing the total penalty for both companies to $31 million.
The Justice Department said the fine and other penalties appeared to fall short of the revenues the NGL earned through the illicit biodiesel deals. However, the consent decree released by DOJ said NGL “does not have an ability to pay a penalty greater than that required by this Consent Decree,” and that it had nearly violated its financial covenants in its credit agreements.
The U.S. Environmental Protection Agency, responsible for ensuring that transportation fuel sold in the U.S. contains a minimum volume of renewable fuel, discovered the violations through a tip and then followed up with an inspection and extensive investigation into NGL transactions.