Gov. Albert Bryan Jr. announced Monday that all employees of Limetree Bay refinery will be let go by Sept. 19, and that the planned suspension of operations is certain to impact the V.I. economy.
Bryan estimated that up to “500 to 600 direct jobs will be impacted” by the closure, including contractors, and another another 100 to 200 indirect jobs from transportation to rentals might be affected as well, he said.
About 85 jobs at Limetree Bay Terminals are not impacted by the closure announced Monday morning by company Chief Executive Officer Jeff Rinker.
“They should be OK,” Bryan said.
Bryan’s announcement came at a press briefing normally reserved for his administration’s tackling of the COVID-19 crisis. During the 1 p.m. briefing, the governor said he’d spoken at 6 a.m. with refinery leadership and learned that 271 employees will be let go in 90 days, by Sunday, Sept. 19.
The best-case scenario for the refinery project “would be some debt restructuring and another reopening attempt with new investors,” he said, and the worst-case scenario is a permanent shut down of the facility.
Limetree Bay — under an agreement inked by Gov. Kenneth Mapp, Boston-based private equity firm Arclight Capital Partners and Freepoint Commodities — resumed refining in February. The company, however, was forced to shut down temporarily in May, after repeatedly spraying oil and chemicals over the surrounding neighborhoods of St. Croix
According to Bryan, Limetree struggled with “inherent cash flow issues” and was “100% over budget.” He blamed the “trying times” of the pandemic, adding that with “no money coming in, they are unable to maintain the current workforce.”
“Construction in the Caribbean is always a challenge,” Bryan said.
He was careful to not openly criticize the federal Environmental Protection Agency, but said the agency was “not proactive” and called its stance under the Biden administration “aggressive” and “troubling.”
Moving forward, Bryan said he would like to see more transparency from the EPA, as well the agency having more contact with the local government.
In discussing Limetree Bay’s finances, Bryan said he understood the plight of EIG Global Energy Partners, which took control of Limetree in 2020. Bryan emphasized that supply management suffered during COVID-19 and that the lack of money made investors weary.
He also said he believes his administration did all it could for the project and expressed hope to see another “fair shot” in the reopening of the refinery “after making some noise in Washington D.C. that would impact the EPA’s work.”
V.I. Delegate to Congress Stacey Plaskett has been briefed on the matter, he said.
As to dealing with the pending economic impact, Bryan said the V.I. government has almost $600 million available for budget “markups.”
“My real concern is on the private sector side,” Bryan said. “Another concern is the burden the closure will put on our unemployment insurance funds.”
He added that the plan is to alleviate the impact of the closure, such as prioritizing public sector and recovery projects on St. Croix, bringing new manufacturers to St. Croix under the American Recovery Plan and additional funds for small businesses.
“All is not lost. You have a compliant refinery … There’s plenty of left in the refinery,” Bryan said.
Thursday’s announcement was reminiscent of Bryan’s former boss, Gov. John de Jongh Jr., announcing the closure of the HOVENSA Refinery in 2012. Bryan served as Labor commissioner at the time. In its heyday, HOVENSA employed over 2,000 workers and processed a half-million barrels of crude oil per day. In contrast, the Limetree Bay contract called for a total of 400 employees with plans to process 210,000 barrels per day.
At Thursday’s briefing and following a report from Health Commissioner Justa Encarnacion on vaccination statistics, Bryan urged the community to drop any vaccine reservations, as “the vaccine has been researched and tested like any other vaccine” and “we need it to keep going,” and “to keep our schools open next year.”
Encarnacion said that to date, 43,000 V.I. residents have been vaccinated. Further, she said, 54% of the eligible population received the first dose, and 44.3% received both shots doses.