NGL reaches lawsuit settlement with EPA

Tulsa’s NGL Energy Partners LP has reached an agreement with the EPA over a lawsuit brought by the government against one of the company’s subsidiaries involved in biofuel production in Iowa.

The company said the settlement remains subject to final approval by the court. The Environmental Protection Agency filed suit against NGL Crude Logistics LL and another company, Western Dubuque Biodiesel LLC.

NGL Crude Logistics agreed to pay a $25 million fine and $10 million in other penalties — even though the company appears to have reaped a total of about $43.6 million in sales from fraudulently double-counting biofuel credits in 2011.

DOJ spokesman Wyn Hornbuckle said the company incurred costs in the process of committing the fraud, and the consent decreereleased by DOJ said NGL Crude Logistics “does not have an ability to pay a penalty greater than that required by this Consent Decree.” Eric Wolff has more for Pros.

NGL hopes the court approval will bring an end to our years of investigation and litigation regarding the conduct of NGL Crude’s predecessor, Gavilon, LLC.

The lawsuit was initially filed in October 2016 and related to alleged civil violations of the Clean Air Act’s renewable fuel standard regulations allegedly committed by Gavilon and WDB. The alleged violations occurred during 2011 at a time when NGL did not own Gavilon and when Gavilon was under different management.

NGL purchased Gavilon from Gavilon Energy Intermediate, LLC (“Gavilon Intermediate”) in December 2013, some two years after the alleged conduct and at a time when Gavilon Intermediate was owned by Ospraie Management, LLC, General Atlantic LLC and Soros Fund Management LLC. NGL was not involved in any way in the alleged violations.

In determining to settle the EPA action under the terms of the Consent Decree, NGL said it considered, among other factors, the ongoing expense and operational impacts to NGL of continuing to defend the lawsuit as well as the uncertainty associated with the outcomes of litigation.

NGL stated it believes that the Consent Decree is in NGL’s best interest, as it will end a long and expensive regulatory dispute; prevents the continued expenditure of legal costs; and works to protect the best interest of NGL’s investors, and its employees and their families.those filings, specifically those under the heading “Risk Factors”.