Limetree Bay Chief Executive Officer Jeff Rinker announced Monday that the St. Croix refinery will remain idle indefinitely, crippled by the confluence of months of noxious gas and oil releases enraging residents and regulators and a troubled restart that went hundreds of millions of dollars over budget.
“This was an extremely difficult decision for us, and we are truly saddened to announce suspension of our restart plans for the refinery,” Rinker said in a statement.
“Our personnel have demonstrated tremendous commitment and dedication in restarting the refinery, and we continue to be proud of their hard work. Unfortunately, this is our only option, given the extreme financial constraints facing the company.”
Limetree Bay was already under a 60-day emergency shutdown order by the Environmental Protection Agency, because the refinery repeatedly sprayed oil and chemicals over surrounding neighborhoods after restarting operations in February.
That order is set to expire July 14, but Rinker said Monday the refinery doesn’t have enough cash to continue operations, and all 271 employees will be laid off.
“Limetree Bay informed EPA that it will suspend plans to restart its refinery in St. Croix indefinitely. EPA is and has been focused on the health and safety of the St. Croix community,” according to a statement from Acting EPA Regional Administrator Walter Mugdan.
The EPA, he said, stands ready to help.
“EPA has had regular, ongoing communications with Governor [Albert] Bryan’s office and the U.S. Virgin Islands government to offer our assistance to help this facility operate in a manner that is safe and complies with laws that protect public health. These lines of communication remain open,” Mugdan said.
Before the EPA issued the shutdown order, the refinery voluntarily paused operations May 12, and since that time “Limetree Bay has been working to obtain capital to assist in its restart efforts,” according to the statement from Limetree. “Regrettably, the company has been unable to secure the necessary funding and will be required to reduce the refinery’s workforce by approximately 271 employees, effective Sept. 19.”
The statement also noted that “Limetree Bay’s oil storage terminal will not be affected by the decision.” Limetree Bay will now begin “preparing the refinery for an extended shutdown, which includes safely purging gases from all of the units and removing any residual oil and products in the lines.”
Gov. Albert Bryan Jr. devoted the majority of Monday’s weekly press briefing to the shutdown.
Reuters reported on June 3 that Boston-based Arclight’s Energy Partners Fund VI, which held a majority stake in the Limetree Bay refinery, lost more than a quarter of its value in the year ending March 31, according to financial disclosures by a partner in the fund.
“Arclight added the refinery to its Energy Partners Fund VI portfolio after purchasing it out of bankruptcy in 2016 for $190 million, hoping to renovate and restart it, along with other investors,” according to Reuters.
“The fund has since removed the refinery from its portfolio, while investors holding hundreds of millions of dollars of common and preferred equity in the facility have been forced to write it off as worthless, according to pension fund officials and financial disclosures.”
The Reuters report also indicated that “Contractors hired to help restart the refinery also claim they are still owed millions of dollars for their work, according to liens filed with the U.S. Virgin Islands Recorder of Deeds.”
History of pollution
The recent pollution problems are nothing new.
Operating as HOVENSA, the refinery shut down in 2012 after the EPA cited the facility for violations of the Clean Air Act, over a series of releases in 2010 and 2011 that sprayed oil over residential neighborhoods.
February’s restart was followed by several accidents and flares that left many residents unable to drink water from their own cisterns. The company has been distributing bottled water to some households.
St. Croix residents have filed several lawsuits as a result of the pollution, and community leaders are working to quantify the impact of the refinery’s brief, ill-fated restart through an online survey. David Bond, a professor at Bennington College, is helping to organize the research.
All St. Croix residents are encouraged to take an online survey on the impacts of the refinery’s pollution, available at bennington.edu/Limetree. The deadline to complete the survey is July 9.