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D A T E L I NE ENERGY TRANSFER PARTNERS TO ACQUIRE SUNOCO IN $5.3 BILLION TRANSACTION Energy Transfer Partners, L.P. (Dallas) and Sunoco, Inc. (Philadelphia) announced on April 30 that they have entered into a definitive merger agreement whereby ETP will acquire Sunoco in a unit and cash transaction valued at $50.13 per share, or a total consideration of approximately $5.3 billion, based on ETP's closing price on April 27, 2012. This combination will create one of the largest and most diversi- fied energy partnerships in the country by expanding ETP's geographic footprint and strengthening its presence in the transpor- tation, terminalling and logistics of crude oil, NGLs and refined products. The merger consideration, which con- sists of $25 in cash and 0.5245 of an ETP common unit, or approximately 50 per- cent cash and 50 percent ETP common units, represents a 29 percent premium to the 20-day average closing price of Sunoco shares as of April 27, 2012. By acquiring Sunoco, ETP will also own Sunoco's general partner interest and the incentive distribution rights (IDRs) in Sunoco Logistics Partners, as well as Sunoco's 32.4 percent interest in Sunoco Logistics Partners' limited partner units and Sunoco's branded retail business, which generates additional stable cash flows from a portfolio of approximately 4,900 retail locations in the U.S. "This transaction, which will be imme- diately accretive, represents the next step in Energy Transfer Partners' transformation into a more diversified enterprise with an integrated and expanded footprint," said Kelcy Warren, ETP's chief executive offi- cer and chairman of the board of directors. "As we have said in the past year, our goal is to derive more of our distributable cash flow from the transportation of heavier hydrocarbons like crude oil, NGLs, and refined products. With this transaction, we make a major move in that direction, bringing our cash flow mix related to the combined enterprise's pipeline businesses to approximately 70 percent natural gas and 30 percent heavier hydrocarbons. At FEATURED NEWS Energy Transfer Partners acquires Sunoco Refiners, oil companies criticize EPA ILTA Conference and Trade Show Hudson Valley Oil Heat Council schol- arship winner Robert Takvorian joins Fuel Right U.S. Rollie Systems expands factory CITGO awarded ILTA 2012 Platinum Award for Safety Western Cascade Truck, Tank & Equipment joins Heil Distribution Network the same time, we will enhance the size and scale of the ETP platform by creating new service capabilities and entering new geographic operating areas." "This transaction will enable Sunoco's businesses to realize their full potential by becoming an important part of a diversified leader in the energy industry," said Brian P. MacDonald, Sunoco's president and chief executive officer. "In addition, it delivers an attractive premium to our shareholders, while enabling them to participate in the future growth of the business." REFINERS, OIL COMPANIES CRITICIZE EPA FOR UPHOLDING BIOFUELS MANDATE Oil companies and refiners called the Environmental Protection Agency (EPA) "out of touch with reality" after it denied a request by the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM) to eliminate mandates for cellulosic biofuels. "EPA's mandate is out of touch with reality and forces refiners to pay a penalty for not using imaginary biofuels," said API Director of Downstream and Industry Operations Bob Greco. "EPA's unrealis- tic mandate is effectively an added tax on making gasoline." The Clean Air Act requires EPA to determine the mandated volume of cel- lulosic biofuels each year at "the projected volume available," API said in a May 25 statement posted on its website. However, in 2011 EPA required refineries to use 6.6 million gallons of cellulosic biofuels even though EPA's own records showed none were commercially available, API said. EPA denied API's 2011 petition for recon- sideration of the mandate and continues to mandate the biofuels this year, API said. "The fact that EPA continues to man- date these biofuels that do not exist is regulatory absurdity and bad public pol- icy," Greco said. API represents more than 500 oil and natural gas companies. AFPM, former ly the Nat ional Petrochemical & Refiners Association (NPRA), also criticized the mandate. "EPA's decision is arbitrary and capri- cious. We fail to understand how EPA can maintain a requirement to purchase a type of fuel that simply doesn't exist. Congress cre- ated a waiver provision in the RFS to address this exact situation," AFPM President Charles T. Drevna said in a May 25 statement, after the EPA decision. "If EPA isn't going to grant a waiver based on the agency's own data that shows the fuel is not available, when does the agency think it is appropriate to exercise its waiver authority?" The ruling, Drevna said, "simply upholds EPA's imposition of a back- door gasoline tax on American consumers." The AFPM, API and the Western States Petroleum Association jointly filed a petition on January 20, 2012, request- ing that the EPA waive the 2011 cellulosic biofuel volume mandate in its entirety due to a non-existent domestic supply of the fuel. EPA denied the petition on May 22, the groups said. The refiners said the agency's own monthly summary of avail- able volumes of cellulosic biofuels shows that no cellulosic biofuel was produced in the United States in 2011. Yet refiners were forced to pay $6.8 million to EPA for waiver credits needed to comply with the mandate, the trade groups said. AFPM and API also sent a petition to EPA in February 2011 to reconsider the mandate. EPA denied that petition as well, the groups said. www.fueloilnews.com | FUEL OIL NEWS | JULY 2012 3