PBF Energy 2013 Annual Report Download - page 38

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Efforts have also been undertaken to delay, limit or prohibit EPA and possibly state action to regulate GHG
emissions, and it is not possible at this time to predict the ultimate form, timing or extent of federal or state regulation.
In the event we do incur increased costs as a result of increased efforts to control GHG emissions, we may not be
able to pass on any of these costs to our customers. Such requirements also could adversely affect demand for the
refined petroleum products that we produce. Any increased costs or reduced demand could materially and adversely
affect our business and results of operation.
Renewable fuels mandates may reduce demand for the refined fuels we produce, which could have a material
adverse effect on our results of operations and financial condition.
Pursuant to the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, the EPA
has issued Renewable Fuel Standards, or RFS, implementing mandates to blend renewable fuels into the petroleum
fuels produced and sold in the United States. Under RFS, the volume of renewable fuels that obligated refineries
must blend into their finished petroleum fuels increases annually over time until 2022. In addition, certain states
have passed legislation that requires minimum biodiesel blending in finished distillates. On October 13, 2010, the
EPA raised the maximum amount of ethanol allowed under federal law from 10% to 15% for cars and light trucks
manufactured since 2007. The maximum amount allowed under federal law currently remains at 10% ethanol for
all other vehicles. Existing laws and regulations could change, and the minimum volumes of renewable fuels that
must be blended with refined petroleum fuels may increase. Because we do not produce renewable fuels, increasing
the volume of renewable fuels that must be blended into our products displaces an increasing volume of our
refinery’s product pool, potentially resulting in lower earnings and profitability. In addition, in order to meet certain
of these and future EPA requirements, we must purchase credits, known as “RINS,” which have fluctuating costs.
Our pipelines are subject to federal and/or state regulations, which could reduce the amount of cash we generate.
Our transportation activities are subject to regulation by multiple governmental agencies. The regulatory
burden on the industry increases the cost of doing business and affects profitability. Additional proposals and
proceedings that affect the oil industry are regularly considered by Congress, the states, the Federal Energy
Regulatory Commission, the United States Department of Transportation, and the courts. We cannot predict when
or whether any such proposals may become effective or what impact such proposals may have. Projected operating
costs related to our pipelines reflect the recurring costs resulting from compliance with these regulations, and these
costs may increase due to future acquisitions, changes in regulation, changes in use, or discovery of existing but
unknown compliance issues.
We are subject to strict laws and regulations regarding employee and process safety, and failure to comply with
these laws and regulations could have a material adverse effect on our results of operations, financial condition
and profitability.
We are subject to the requirements of the Occupational Safety & Health Administration, or OSHA, and
comparable state statutes that regulate the protection of the health and safety of workers. In addition, OSHA requires
that we maintain information about hazardous materials used or produced in our operations and that we provide
this information to employees, state and local governmental authorities, and local residents. Failure to comply with
OSHA requirements, including general industry standards, process safety standards and control of occupational
exposure to regulated substances, could have a material adverse effect on our results of operations, financial
condition and the cash flows of the business if we are subjected to significant fines or compliance costs.
Compliance with and changes in tax laws could adversely affect our performance.
We are subject to extensive tax liabilities, including federal, state, local and foreign taxes such as income,
excise, sales/use, payroll, franchise, property, gross receipts, withholding and ad valorem taxes. New tax laws and
regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could
result in increased expenditures for tax liabilities in the future. These liabilities are subject to periodic audits by
the respective taxing authorities, which could increase our tax liabilities. Subsequent changes to our tax liabilities