COMMITMENTS AND CONTINGENCIES The DCR Rail Terminal and the DCR West Rack are collocated with the Delaware City Refinery and are located in Delawares coastal zone where certain activities are regulated under the Delaware Coastal Zone Act (the CZA). Therefore, determinations regarding the CZA that impact the Delaware City Refinery may potentially adversely impact the Partnerships assets even if the Partnership is not directly involved. In 2013, the Delaware City Refinery obtained a permit to allow loading of crude oil onto barges (the 2013 Secretarys Order). The issuance of the permit was appealed by environmental interest groups and the Delaware Department of Natural Resources and Environmental Controls (DNREC) issuance was ultimately upheld. The Delaware City Refinery is appealing a Notice of Penalty Assessment and Secretarys Order issued in March 2017 (the 2017 Secretarys Order), including a $150 fine, alleging violations of the 2013 Secretarys Order. DNREC determined that the Delaware City Refinery had violated the 2013 Secretarys Order by failing to make timely and full disclosure to DNREC about the nature and extent of certain shipments and had misrepresented the number of shipments that went to other facilities. The penalty assessment and 2017 Secretarys Order conclude that the 2013 Secretarys Order was violated by the Paulsboro Refinery by shipping crude oil from the Delaware City Terminal to three locations other than the Paulsboro Refinery, on 15 days in 2014, making a total of 17 separate barge shipments containing approximately 35,700,000 gallons of crude oil in total. On April 28, 2017, the Delaware City Refinery appealed the Notice of Penalty Assessment and 2017 Secretarys Order. The hearing of the appeal is scheduled for February 27, 2018. To the extent that the penalty and 2017 Secretarys Order are upheld, there will not be a material adverse effect on the Partnerships financial position, results of operations or cash flows. On December 28, 2016, DNREC issued a CZA permit (the Ethanol Permit) to the Delaware City Refinery allowing the utilization of existing tanks and existing marine loading equipment at their existing facilities to enable denatured ethanol to be loaded from storage tanks to marine vessels and shipped to offsite facilities. On January 13, 2017, the issuance of the Ethanol Permit was appealed by two environmental groups. On February 27, 2017, the Coastal Zone Industrial Board (the Coastal Zone Board) held a public hearing and dismissed the appeal, determining that the appellants did not have standing. The appellants filed an appeal of the Coastal Zone Boards decision with the Delaware Superior Court (the Superior Court) on March 30, 2017. On January 19, 2018, the Superior Court rendered an Opinion regarding the decision of the Coastal Zone Board to dismiss the appeal of the Ethanol Permit for the ethanol project. The Judge determined that the record created by the Coastal Zone Board was insufficient for the Superior Court to make a decision, and therefore remanded the case back to the Coastal Zone Board to address the deficiency in the record. Specifically, the Superior Court directed the Coastal Zone Board to address any evidence concerning whether the appellants claimed injuries would be affected by the increased quantity of ethanol shipments. During the hearing before the Coastal Zone Board on standing, one of the appellants witnesses made a reference to the flammability of ethanol, without any indication of the significance of flammability/explosivity to specific concerns. Moreover, the appellants did not introduce at hearing any evidence of the relative flammability of ethanol as compared to other materials shipped to and from the refinery. However, the sole dissenting opinion from the Coastal Zone Board focused on the flammability/explosivity issue, alleging that the appellants testimony raised the issue as a distinct basis for potential harms. Once the Coastal Zone Board responds to the remand, it will go back to the Superior Court to complete its analysis and issue a decision. On October 19, 2017, the Delaware City Refinery received approval from DNREC for the construction and operation of the ethanol marketing project to allow for a combined total loading of up to 10,000 bpd, on an annual average basis, of ethanol on to marine vessels at the marine piers and the terminal truck loading rack, subject to certain operational and emissions limitations as well as other conditions. On the same date, DCLC received DNREC approval for the construction of (i) four additional loading arms for each of lanes 4, 10 and 11 for purposes of loading ethanol at its truck loading rack and (ii) a vapor vacuum control system for loading lanes connected to the existing vapor recovery unit located at its terminal in Delaware City. This approval is also subject to certain operational and emission limitations as well as other conditions. Environmental Matters PBFXs assets, along with PBF Energys refineries, are subject to extensive and frequently changing federal, state and local laws and regulations, including, but not limited to, those relating to the discharge of materials into the environment or that otherwise relate to the protection of the environment, waste management and the characteristics and the composition of fuels. Compliance with existing and anticipated laws and regulations can increase the overall cost of operating the Partnerships assets, including remediation, operating costs and capital costs to construct, maintain and upgrade equipment and facilities. In connection with PBF Holdings acquisition of the DCR assets, Valero Energy Corporation (Valero) remains responsible for certain pre-acquisition environmental obligations up to $20,000 and the predecessor to Valero in ownership of the refinery retains other historical obligations. In connection with its acquisition of the DCR assets and the Paulsboro Refinery, PBF Holding and Valero purchased ten -year, $75,000 environmental insurance policies to insure against unknown environmental liabilities at each site. In connection with PBF Holdings Toledo Refinery acquisition, Sunoco Inc. (R&amp;M) remains responsible for environmental remediation for conditions that existed on the closing date for twenty years from March 1, 2011, subject to certain limitations. In connection with its purchase of the East Coast Terminals, the Partnership is responsible for the environmental remediation costs for conditions that existed on the closing date up to a maximum of $250 per year for ten years, with Plains All American Pipeline, L.P. remaining responsible for any and all additional costs above such amounts during such period. The environmental liability of $1,923 recorded as of December 31, 2017 ( $2,173 as of December 31, 2016) represents the present value of expected future costs discounted at a rate of 1.83% . At December 31, 2017 , the undiscounted liability is $2,087 and the Partnership expects to make aggregate payments for this liability of $1,250 over the next five years. The current portion of the environmental liability is recorded in Accrued expenses and the non-current portion is recorded in Other long-term liabilities. In connection with PBF Holdings acquisition of the Torrance Refinery and related logistics assets, PBF Holding is responsible for all known and unknown environmental liabilities at each site acquired in connection with the acquisition. The total estimated liability of known environmental obligations associated with the Torrance Valley Pipeline was approximately $256 as of December 31, 2017 ( $1,402 as of December 31, 2016). In accordance with the contribution agreement associated with the TVPC Acquisition, PBF Holding has indemnified the Partnership for any and all costs associated with environmental remediation for obligations that existed on or before August 31, 2016, including all known or unknown events, which includes the recorded liability of approximately $256 . At December 31, 2017 , the Partnership expects to make the full aggregate payment for this liability within the next five years. PBFX has recorded a receivable from PBF Holding in Accounts receivable - affiliates for such anticipated payments related to the known pre-existing Torrance Valley Pipeline environmental obligations for which PBFX is indemnified. In connection with the Partnerships purchase of the Toledo Products Terminal, the Partnership did not assume and is currently not aware of any pre-existing environmental obligations. If pre-acquisition environmental obligations are identified, the Seller is responsible for any liabilities up to $2,000 identified to have occurred since 2002. For liabilities arising prior to 2002, the Seller is indemnified by the prior owner under an agreement between the Seller and the prior owner, and the Partnership is entitled to be reimbursed for all amounts paid related to such liabilities on a full pass-through basis.