PBF Energy 2012 Annual Report Download - page 22

works except in strict conformance with permits, such as pre-treatment permits and discharge permits, issued by
federal, state and local governmental agencies. Federal waste-water discharge permits and analogous state waste-
water discharge permits are valid for a maximum of five years and must be renewed.
We generate wastes that may be subject to the federal Resource Conservation and Recovery Act, or RCRA,
and comparable state and local requirements. The EPA and various state agencies have limited the approved
methods of disposal for certain hazardous and non-hazardous wastes.
The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, or
CERCLA, also known as “Superfund,” imposes liability, without regard to fault or the legality of the original
conduct, on certain classes of persons who are considered to be responsible for the release of a “hazardous
substance” into the environment. These persons include the current or former owner or operator of the disposal
site or sites where the release occurred and companies that disposed of or arranged for the disposal of the
hazardous substances. Under CERCLA, such persons may be subject to joint and several liability for
investigation and the costs of cleaning up the hazardous substances that have been released into the environment,
for damages to natural resources and for the costs of certain health studies. As discussed more fully below,
certain of our sites are subject to these laws and we may be held liable for investigation and remediation costs or
claims for natural resource damages. It is not uncommon for neighboring landowners and other third parties to
file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants
released into the environment. Analogous state laws impose similar responsibilities and liabilities on responsible
parties. In our current normal operations, we have generated waste, some of which falls within the statutory
definition of a “hazardous substance” and some of which may have been disposed of at sites that may require
cleanup under Superfund.
As is the case with all companies engaged in industries similar to ours, we face potential exposure to future
claims and lawsuits involving environmental matters. These matters include soil and water contamination, air
pollution, personal injury and property damage allegedly caused by substances which we manufactured, handled,
used, released or disposed of.
Current and future environmental regulations are expected to require additional expenditures, including
expenditures for investigation and remediation, which may be significant, at our refineries and at our other
facilities. To the extent that future expenditures for these purposes are material and can be reasonably
determined, these costs are disclosed and accrued.
Our operations are also subject to various laws and regulations relating to occupational health and safety.
We maintain safety, training and maintenance programs as part of our ongoing efforts to ensure compliance with
applicable laws and regulations. Compliance with applicable health and safety laws and regulations has required
and continues to require substantial expenditures.
In connection with each of our acquisitions, we assumed certain environmental remediation obligations. In
the case of Paulsboro, a trust fund established to meet state financial assurance requirements, in the amount of
approximately $12.1 million, the estimated cost of the remediation obligations assumed based on investigation
undertaken as of the acquisition date, was acquired as part of the acquisition. The short term portion of the trust
fund and corresponding liability are recorded as restricted cash and accrued expenses, the long term portion is
recorded in other assets and other long-term liabilities. In connection with the acquisition of Delaware City, the
prior owners remain responsible subject to certain limitations, for certain environmental obligations including
ongoing remediation of soil and groundwater contamination at the site. Further, in connection with the Delaware
City and Paulsboro acquisitions, we purchased two individual ten-year, $75.0 million environmental insurance
policies to insure against unknown environmental liabilities at each refinery. In connection with the acquisition
of Toledo, the seller, subject to certain limitations, initially retains remediation obligations which will transition
to us over a 20-year period. However, there can be no assurance that any available indemnity, trust fund or
insurance will be sufficient to cover any ultimate environmental liabilities we may incur with respect to our
refineries which could be significant.
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