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Case Summary: Prospective Purchaser Agreement with Philadelphia Energy Solutions LLC and Philadelphia Energy Solutions Refining and Marketing LLC.

In July 2012, EPA entered into a prospective purchaser agreement (PPA) with Philadelphia Energy Solutions LLC and Philadelphia Energy Solutions Refining and Marketing LLC that resolves potential claims by the federal government related to past pollution at the refinery and enables refinery operations to continue. The PPA was signed in conjunction with an additional agreement with Philadelphia Energy Solutions that will achieve an overall reduction in air pollution at its recently acquired Philadelphia refinery while providing the near term flexibility to improve operations, expand output, and create jobs.

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Information about the Company

In the summer of 2012, The Carlyle Group LLC, a Delaware corporation, entered into a joint venture with Sunoco, Inc., a Pennsylvania company. The joint venture formed Philadelphia Energy Solutions LLC which has indirect ownership of Philadelphia Energy Solutions Refining and Marketing LLC. These two companies purchased the property in question here and entered into the PPA with the EPA.

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Information about the Violation

While EPA has final oversight authority, under a work share agreement, the Commonwealth of Pennsylvania will continue to oversee and approve the daily work being carried out by Sunoco pursuant to two Resource Conservation and Recovery Act (RCRA) Corrective Action Permits and a Consent Order and Agreement entered into between the Pennsylvania Dept. of Environmental Protection (PADEP) and Sunoco. However, the PPA protects the new owners from potential liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, commonly known as Superfund) as well as under RCRA for any pollution that occurred prior to their taking ownership of the refinery.

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Information about the Site

The Site is approximately 1,400 acres located at 3143 Passyunk Avenue, Philadelphia, Pennsylvania. Since the 1800s, the Site has been used as a refinery to distribute, store and process petroleum. Sunoco operated the Site for years and its refinery operations at the Site contributed to soil and groundwater contamination. The main contaminants at the Property are hydrocarbons and heavy metals, including lead and arsenic. The PPA requires Sunoco to continue cleaning up the site while allowing the new corporate entities, Philadelphia Energy Solutions LLC and Philadelphia Energy Solutions Refining and Marketing LLC to continue operating the facility in a more efficient manner. Improvements to the refinery planned by the new owners will provide additional capacity for treating and remediating waste-water and reusing recovered hydrocarbons. The refinery will provide about 1000 jobs for the Philadelphia area.

Summary of the Prospective Purchaser Agreement

The PPA provides a covenant not to sue from the United States to Philadelphia Energy Solutions LLC and Philadelphia Energy Solutions Refining and Marketing LLC of the property for any contamination existing on the property prior to the acquisition of the property. However, any new contamination generated by the operation of the refinery by the new owners after the purchase is subject to potential enforcement actions by the EPA or the Commonwealth of Pennsylvania.

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For more information contact:

Phil Page
Senior Attorney-Advisor
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., N.W.
Washington, D.C. 20460

Sheila Briggs- Steuteville
Senior Assistant Regional Counsel
U.S. Environmental Protection Agency
Region 3
1650 Arch Street
Philadelphia, PA 19103

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