The former Limetree Bay oil refinery on St. Croix will remain idle for at least the next two to three years, after the Environmental Protection Agency said the dangerously dilapidated facility must undergo further review and permitting requirements.
The EPA announced Thursday that the refinery may not resume operations without first obtaining a new comprehensive Clean Air Act permit, known as a Prevention of Significant Deterioration or PSD permit. The refinery has an existing PSD permit, which was last modified in 2011.
The timeline for any potential restart by the refinery’s new owners, “significantly depends on the cooperation and the submittal of information from the company,” EPA Administrator Michael Regan said during a conference call with reporters Thursday.
“We’ve estimated that two to three years could be the entire process, not just the PSD process but a number of routine permitting steps that the company needs to go through,” Regan said. “It’s our hope that the company would be cooperative, provide all of the relevant information on a timely basis, and if they could do that and meet EPA’s requirements and threshold, this is the timeframe that we’ve estimated we would be following.”
Depending on what type of pollution-mitigating technology the refinery’s new owners opt to install, the cost to come into compliance “could be in the hundreds of millions of dollars,” said EPA Deputy Regional Administrator Walter Mugdan.
The EPA has directed its new permitting requirement to both West Indies Petroleum and Port Hamilton Refining and Transportation, two companies that share some Jamaica-based investors, including Charles Chambers.
Chambers said in July that former owners Limetree Bay invested abouty $4 billion in the long-idled refinery, and “we expect that we’re going to spend somewhere in the region of $200 million to get it restarted.”
While West Indies Petroleum was declared the winning bidder of December’s bankruptcy auction, the company denied ownership in the refinery in a press release issued in June.
A spokeswoman for Chambers, Teri Helenese — who has said she is an independent consultant for both Chambers and the Office of Gov. Albert Bryan Jr. — subsequently directed all questions about the refinery to representatives for Port Hamilton, saying that “I am a communications consultant with West Indies Petroleum Limited.”
Mugdan said Thursday even the EPA is still unclear on the ownership situation.
“There has been dispute. It is our belief and understanding that both West Indies Petroleum and Port Hamilton Refining were both the owners. West Indies has asserted that they are not, that they’re merely an investor, but we’ve asked for explanation or documentation of that — and we’re awaiting that — so currently, we’re addressing both companies,” Mugdan said.
“Whether you’re an investor or an owner, I think the message from EPA is that no one will skirt the law,” Regan said. “And there are refineries all across this country that are currently complying with the law, and this refinery will be no different.”
Chambers and Port Hamilton Vice President Fermin Rodriguez did not respond to a request for comment from The Daily News.
In July, Sen. Kenneth Gittens, chairman of the 34th Legislature’s Committee on Economic Development and Agriculture, convened an informational hearing to learn more about the refinery’s status.
In terms of reopening the refinery, “we are really about to commence our process to get to restart,” Chambers said at the July hearing. “It’ll happen. At the moment, we think in the second quarter of next year, so nine, 10 months.”
On Thursday, Regan said that timeline was never realistic.
“Absolutely not. When you look at the condition of this facility, you look at the track record over the years, in terms of operation and maintenance, and how this facility has been maintained, there are a number of steps that this facility needs to go through to ensure efficient and effective operations, but also to ensure that we protect the community. And so, that estimation of a year is not accurate under any terms,” Regan said.
Gittens said Thursday that the refinery’s new owners still have not answered many of the questions posed by senators in July.
“I can’t say I’m surprised about EPA’s review given the serious concerns at the refinery and the new owners’ lack of transparency. Port Hamilton has failed to respond to basic inquiries and, according to the EPA, has allowed the refinery equipment to deteriorate,” Gittens said in response to questions from The Daily News.
Bryan, back in April, said that the refinery should be allowed to restart quickly.
“I urge the Biden Administration to prioritize this effort and to take every step possible to reopen the St. Croix refinery as soon as possible,” the governor said in a statement. “The US EPA must work to ensure that the refinery does not endanger public health, but it should not put unnecessary roadblocks in the way of restarting this important asset.”
Bryan is out of the territory on personal leave after celebrating his re-election on Nov. 8, and is scheduled to return Saturday. Lt. Gov. Tregenza Roach is acting governor.
As of press time Thursday, Government House Communications Director Richard Motta Jr. had not responded to a request from The Daily News for comment on the EPA’s announcement. V.I. Delegate to Congress Stacey Plaskett also did not respond to Daily News inquiries. .
Hess then and now
Built by Leon Hess in the 1960s, the refinery had previously shut down in 2012. At the time it was called Hovensa, born out of a partnership between Hess Oil Virgin Islands and Venezuela’s state-run oil company, Petroleos de Venezuela or PDVSA. Hovensa shut down in April 2012 after years of economic troubles that were compounded by violations of the Clean Air Act.
A brief but disastrous restart in February 2021, under Limetree Bay’s ownership, resulted in several environmental contamination incidents that left at least 1,200 nearby homes coated in oil particles and the layoff of hundreds of refinery employees and contractors.
The EPA issued an emergency shutdown order on May 14, 2021, requiring Limetree to cease refinery operations after the repeated flares and oil sprays contaminated drinking water and crops.
The U.S. Justice Department filed a complaint on behalf of the EPA in July 2021, saying that Limetree Bay refinery officials publicly minimized serious accidents and chemical releases that endangered St. Croix residents’ health as early as December, two months before the refinery officially restarted operations.
This past August, there was a fire and smoldering pile of petroleum coke under Port Hamilton’s ownership, fuel left over from the 2021 restart. This led EPA inspectors to spend several days investigating the refinery in September.
The EPA recently published a report warning that the refinery poses an imminent danger to the surrounding community and the island’s residents may be at risk from the hazardous chemicals leaking from the facility’s corroded equipment.
The EPA previously issued a PSD permit to the refinery in 2011, “so this isn’t out of character, and what we’re doing is we’re looking at the collective record to ensure that from every aspect that this facility is safe and the permitting we put in place is protective of the community,” Regan said Thursday.
Under the Trump Administration, the EPA granted Limetree Bay a more flexible “plantwide applicability limit” or PAL permit in December 2020, but it was withdrawn months later before going into effect.
In March this year, the EPA requested information from the refinery’s new owners before making a final determination regarding the need for a new PSD permit.
Mugdan said Thursday that the EPA told the new owners that the PSD permit requirement “was likely,” and the company provided additional information in July.
“We reviewed that very carefully, we are satisfied that our conclusion today is the correct one and supportable,” Mugdan said. “Obviously, if the company wants to bring additional information to our attention that is somehow new or different, of course it will be considered. We don’t anticipate that that will be the case, but we are always interested in speaking further with the company and we would be happy to hear what their exact plans are and how they can proceed with this application process in the most timely way.”
Mugdan explained that one of the purposes of a PSD permit “is to ensure that new facilities, or facilities that have long been dormant and are going to be reopened, meet current best practice, best technology in terms of air pollution controls.”
Regan emphasized that the new permit requirement “isn’t a knee-jerk reaction.”
“We’ve been very thoughtful, we’ve collected a lot of information from this company, we’ve also considered information that we had in hand, in terms of what we knew about the prior owners and the failed attempts that they made to make the refinery operational,” he said.
Community safety and public health are the EPA’s primary concerns, Regan added, and “we have really involved the community in this process so that we can be as transparent as possible.”
The EPA, he said, is trying to establish acceptable pollution limits to protect the St. Croix community, which “has been overburdened for far too long.”
“This facility had some bad actions in the past and it’s our goal to ensure that those terrible actions never happen again. That’s what we promise the community, and we plan to stick with that commitment,” Regan said.