Hovensa has agreed to pay more than $5.3 million in penalties and spend more than $700 million in new pollution controls at its St. Croix refinery, U.S. Environmental Protection Agency officials said Wednesday during a V.I. Legislature hearing on St. Thomas.
Hovensa also agreed to put $4.9 million aside for environmental projects in the territory, said Carl Soderberg, director of the EPA’s Caribbean Environmental Protection Division.
"It has to be for supplemental environmental programs," Soderberg said, adding that the choice of programs is up to the to the V.I. government."
The territory was a party to the complaint, which was lodged by the U.S. Department of Justice on behalf of the EPA; and $250,000 of Hovensa’s fines will go to the V.I. Government, Soderberg said.
At almost the same moment Soderberg broke the news to the Legislature, the EPA and U.S. Department of Justice issued statements to the press about the agreement, which was filed that same morning in U.S. District Court in the territory.
The agreement requires new and upgraded pollution controls, more stringent emission limits, more and better monitoring, leak-detection, and repair practices to reduce emissions from the refinery. These are projected to cost roughly $700 million over the course of the next decade, according to EPA.
“Hovensa must meet its obligations to operate its facility in a manner that does not put public health and air quality at risk,” said Judith Enck, EPA Regional Administrator for EPA Region 2, in the statement.
EPA staff are on St. Croix now and are responding to the several recent releases of oil and noxious gases from the refinery, Enk said.
In its complaint, the U.S. Government said Hovensa made changes to its refinery that increased emissions without first getting proper permits and installing required pollution-control equipment.
The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant, according to a statement from EPA.
The complaint also alleges violations of Clean Air Act requirements covering the four main sources of emissions sulfur dioxide, nitrogen oxides, volatile organic compounds and benzene.
Hovensa did not concede there were violations, according to a statement from Government House. But the refinery is publicly embracing the decree as ultimately beneficial.
“The projects and investments that result from this agreement will further support our efforts to operate responsibly and protect the environment in St. Croix while making some of the cleanest air in the U.S. even cleaner,” Hovensa’s acting Chief Operating Officer John George said in a statement Wednesday.
Once in place, the pollution controls required by the settlement should reduce emissions of nitrogen oxides by more than 5,000 tons per year and sulfur dioxide by nearly 3,500 tons per year, according to EPA. There will also be reductions of volatile organic compounds, particulate matter like fine soot, carbon monoxide and other air pollutants. Under the settlement, extra pollution-reducing projects at the refinery’s coking unit will also reduce greenhouse gas emissions by over 6,100 tons per year.
Gov. John deJongh Jr. praised the consent decree Wednesday afternoon, saying it will curtail harmful emissions and prevent accidental releases of pollutants like those seen this past year. The decree also gives the V.I. Department of Planning and Natural Resources the right to enter the refinery to monitor compliance, inspect equipment and systems, and copy any relevant records.
“In light of the complexity and the highly technical nature of the corrective measures, I view this consent decree—one that avoids litigation and sets a clear and enforceable timetable for implementing significant change—as a tremendous accomplishment," said deJongh.
The consent decree was filed in U.S. District Court in the U.S. Virgin Islands Wednesday, at the same time as the complaint it addresses. The U.S. Government’s complaint charged Hovensa with civil violations of the Clean Air Act, the V.I. Air Pollution Control Act and provisions of the territory’s official plan for complying with federal environmental regulations. The decree closes the book on the complaint.
The U.S. Department of Justice launched the legal process leading to Wednesday’s settlement at the request of the EPA and the V.I. Government joined the suit as a plaintiff, according to Government House and the EPA. It is also part of a decade-long EPA effort to tighten up enforcement at U.S. refineries, according to Soderberg and other EPA officials.
Since 2000, the EPA has executed similar agreements with many refineries across the U.S.