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Charlotte Amalie
Wednesday, May 22, 2024
HomeCommunityEnvironmentDonald Trump’s Parting Gift to the People of St. Croix: The Reopening...

Donald Trump’s Parting Gift to the People of St. Croix: The Reopening of One of America’s Largest Oil Refineries

Digital Globe satellite image of Limetree refinery, St. Croix. (Satellite image ©2021 Maxar Technologies)

Editor’s note: The Source has sought from its inception to shine a light on the dire and mounting effects of environmental degradation and climate change on our fragile island ecosystem. We have also sought to balance our editorial position in consideration of the territory’s economic realities. When Inside Climate News approached us about reprinting the following investigative report, we reviewed it carefully, discussed it at length and with a few minor changes felt the content was crucial and touched upon issues that despite economic concerns are overlooked at our peril. We publish the news report herewith in its entirety.

For years, Sonya Rivera and her husband have lived off the land, growing tomatoes, cucumbers, kale and other vegetables at their idyllic home in St. Croix, part of the U.S. Virgin Islands located just east of Puerto Rico and roughly a thousand miles from the shores of Florida. The only foods they buy from the store, she said, are sugar and flour.

In early February, their paradise became a nightmare.

A flaring incident at the massive Limetree Bay oil refinery sent a plume of steam into the air and covered more than 130 houses in the Clifton Hill neighborhood, including the Rivera’s home and garden, with specks of oil.

When workers contracted by the refinery’s owners stopped by her house a couple of days later and sprayed chemical dispersants to help clean up the oil, Rivera said she had to dig up and throw out her whole plot, including more than 50 pounds of food.

“Literally black spots were all over everybody’s roofs,” Rivera said. “We’ve already spent over $600 trying to replace the dirt that was contaminated.”

It’s certainly not the first accident to occur at the 56-year-old facility, once one of the largest oil refineries in the world.

The refinery site is home to one of the biggest, and least known, oil spills in U.S. history. Its previous owners faced a multi-million dollar settlement for violating the Clean Air Act. And over the past year, as new ownership rushed to reopen the plant after nearly a decade, Limetree Bay has experienced a series of mishaps and delays, including multiple fires, foul odors strong enough to close schools and several unscheduled flares like the one that doused Rivera’s home and garden.

Now the plant stands as a prime example of what environmentalists see as the Trump administration’s unfettered and irresponsible deregulatory agenda and a penchant, late in President Trump’s term, for granting sweetheart deals to well-connected corporate interests. In Limetree’s case, the administration ignored decades of precedent in issuing new permits and expressed a willingness in emails to the refinery’s new owners to do almost anything they needed to restart it.

The plant’s renewed operations, in the context of the Paris climate accord, also prompted questions among climate activists about why a massive refinery needed to be reopened when global fossil fuel use must decline annually by 6 percent over the next decade if the planet is to have any chance of avoiding runaway climate change by keeping warming within the limits set by the international agreement.

Limetree didn’t respond to questions regarding community concerns over environmental and  health threats posed by its operations, but promised on its website that the community’s safety and the island’s environment were “paramount” to its work.

Virgin Islands government officials touted the plant’s restart in February as a lifeline for the territory, still recovering from two Category 5 hurricanes in 2017—Irma and Maria—and crippled by a pandemic that devastated global tourism. Locals, like Rivera, worry what it will mean for them, and their tropical island, to once again live in the shadow of an oil refinery that has fouled St. Croix’s ecosystem throughout its existence.

Several green groups, including the St. Croix Environmental Association, are urging President Biden to revoke Limetree’s air pollution permit. They have filed an appeal with the Environmental Protection Agency’s Environmental Appeals Board, calling the refinery’s ongoing operations a textbook case of environmental injustice.

The population of St. Croix is majority Black, as are the other islands in the territory. Nearly 75 percent of the people living just north of the refinery are Black, while the remaining percentage are Hispanic or Latino with more than a quarter of the people in this community falling below the national poverty line, according to a recent EPA analysis. In 2016, St. Croix also had the highest number of reported cancer cases among the three islands, according to the territory’s cancer registry data.

For decades, government officials have known that polluting facilities, like oil refineries, are far more likely to exist in poor and/or minority communities than affluent white ones. President Biden has made fighting climate change a top priority and pledged to elevate environmental justice to the top of his regulatory agenda to reverse decades of health disparities in minority neighborhoods.

The White House declined to comment on the demand to revoke Limetree’s permit. But officials now in top positions in the EPA have previously pointed to that permit as an example of the Trump administration’s abdication of the agency’s mission to protect nature and human health.

For locals, like Frandelle Gerard, a St. Croix business leader and the executive director of the Crucian Heritage and Nature Tourism Foundation, the moment represents a chance for the new administration to back up its rhetoric.

“The people directly impacted, the people living closest to the refinery are poor, Black and brown,” Gerard said. “It’s a social justice, racial justice and environmental justice issue.”

A History of Spills, Explosions and Dodged Enforcement

When the ground shook on a sunny February afternoon in 2011, David Bond’s first thought was that a natural disaster had struck. “It felt like a volcanic eruption or earthquake,” he said. “I had no idea what it was.”

A fuel line at the St. Croix oil refinery, operated by the company Hovensa at the time, had caught fire and exploded. The blast was heard from miles away and a pillar of black smoke rose from the island’s southern shore, churning across a blue tropical skyline.

Bond, an anthropology professor at Vermont’s Bennington College, was visiting St. Croix that day for research, and remembers workers in protective hazmat suits moving from house to house to clean the oil from resident’s cisterns—the rain catching systems commonly used on the island to collect drinking water.

Hovensa, a joint venture between Hess Corporation and Petroleos de Venezuela, reported no injuries in the explosion. But the event added a further stain to a growing laundry list of high-profile accidents and violations at the facility in the years leading up to its closure.

Just weeks prior to the explosion, in January 2011, the EPA had found the refinery in such disrepair, that it ordered Hovensa in a consent decree to spend $700 million on new pollution control equipment that would help reduce the plant’s emissions by as much as 8,500 tons a year. The facility had been emitting too much nitrogen oxide, sulfur dioxide, volatile organic compounds—or VOCs—and benzene, all of which can contribute to significant environmental and human health harm, such as increased risk of lung disease and cancer, the agency said.

The EPA also slapped the company with a $5.4 million civil penalty and ordered them to fund $4.9 million in projects that would improve the environmental health of St. Croix.

Frandelle Gerard poses for a portrait at the Crucian Heritage and Nature Tourism Foundation Cultural Center, where she works as the foundation’s executive director. Gerard testified in 2018 against the proposal to reopen the Limetree Bay oil refinery, saying the facility poisoned the island’s only aquifer. (Photo by Michael Butler)

But perhaps the most notable incident happened decades prior to the explosion, said Gerard, who was born in St. Croix and personally remembers many of the mishaps.

In 1982, she explained, the EPA discovered that Hovensa was quietly leaking oil into St. Croix’s groundwater. Cast iron pipes carrying the refinery’s waste products had long been corroding underneath the island’s salt-rich soil, investigators discovered.

It wouldn’t be until late 2011, however, that the agency announced the extent of the leak: More than 43 million gallons of oil—four times the amount spilled by the Exxon Valdez—had seeped into the island’s only aquifer, with hardly anyone one noticing.

Hovensa recovered the vast majority of that oil, according to the company’s self-reporting to the EPA, but roughly 306,000 gallons remain in the aquifer. “We only have one aquifer,” Gerard said, which “has been contaminated permanently because of the underground spills.”

Then, in January 2012, Hovensa announced it was shutting down production at the plant for good, citing a global oil glut and stiff competition. Hovensa also said at the time that the refinery’s closure meant it didn’t need to honor the more than $700 million in equipment upgrades, air monitor installations and habitat improvement projects required under its agreement with the EPA, according to the February permit appeal filed by the St. Croix Environmental Association.

In September 2015, the U.S. Virgin Islands filed a lawsuit against Hess Corporation for more than $1 billion, alleging “a pattern of misconduct by executives,” who “conspired to strip the facility’s assets in order to leave the government with claims against a broke, polluted and inoperable refinery,” according to the environmental association’s permit appeal.

Hovensa oil flare, Sept. 30, 2010 (Source photo by Bill Kossler)

“Within hours of the filing, Hovensa announced that it would file for Chapter 11 bankruptcy,” the appeal added, a move that allowed the company to market and sell the refinery as an oil storage facility.

In December 2015, Hovensa sold the plant to Limetree Bay Ventures, a partnership between the private equity firms EIG and Arclight Capital.

The timing of those events left many locals feeling swindled, believing that Hovensa shut down the refinery knowing very well it had no intention of honoring the promises it had made to clean up its mess and improve the island’s habitat.

In fact, not only did Hovensa pull out of its agreement with the EPA, it spent more than half of what it owed under the consent decree on making the sale of the refinery more attractive, according to a letter between the Trump EPA and Limetree first reported by E&E News. The letter said that Hovensa spent more than $400 million “to maintain the restart capability of the refinery operations,” after closing the plant and putting it up for sale.

Limetree’s current permit, issued under the Trump administration in 2019, requires the company to install the air monitoring equipment that the previous owners ducked before filing for bankruptcy. But Limetree is appealing those conditions, among others, before the EPA’s Environmental Appeals Board, saying the permit is too strict and unneeded.

Limetree didn’t respond to questions regarding its appeal.

As the refinery rebooted this February, old fears crept into Gerard’s thoughts. What if another spill happens and goes unnoticed for years—for decades? What if oil reaches the Sandy Point National Wildlife Refuge, just 10 miles away and home to one of the world’s largest populations of nesting sea turtles? “Is there even a plan for something like that?” she asked.

‘Tax Break After Tax Break After Tax Break’

Nobody contests that the oil refinery’s closure left a crater in the Virgin Islands economy. But many are now arguing over what role—if any—the refinery should play in rebuilding it.

In 2012, the year the refinery shut down, the territory saw its GDP drop by more than 13 percent, a government report found, specifically citing the plant’s closure as a main factor. And by the following year, nearly one out of every five people living in the territory were out of work.

But since efforts to reopen the plant began in 2019, St. Croix has already seen a much-needed influx of cash. The refinery brought in hundreds of temporary construction workers and technicians to get the plant back up and running, and the facility itself will employ up to 700 permanent workers, Limetree has said. The refinery is also expected to generate $7 million in public revenue each year.

“There’s no doubt there’s an economic benefit of having contractors coming to the island,” said Ryan Flegal, a local hotelier. “They stay in our hotel.”

Those funds are particularly needed when considering the two back-to-back Category 5 hurricanes—Irma and Maria—that devastated the Virgin Islands in September 2017. The damage caused by the storms was so extensive, a 2020 congressional report noted, that up to 90 percent of the territory’s power lines were damaged and public revenues were gutted by half.

The hurricanes destroyed homes, schools and caused hundreds of millions of dollars in damages to St. Croix’s only hospital, much of which remains out of commission today.

“Patients visiting the ER have to use outside Porta Potties because the plumbing doesn’t work,” said Jennifer Valiulis, executive director of the St. Croix Environmental Association, referring to portable bathrooms. “Many people still live in houses without a roof.”

The Virgin Islands received $2.3 billion in emergency funding from the Federal Emergency Management Agency to help with recovery efforts. But many residents—including Valiulis, Gerard and Flegal—don’t believe the Virgin Islands government did enough to advocate for the community in the contract with Limetree.

A copy of the contract, obtained by Inside Climate News, shows that Limetree Bay is exempt from at least 15 different taxes and fees, many of which are commonly used by governments to pay for things like repairing roads and investing in public infrastructure. They include income taxes, fuel taxes, highway users’ taxes, production taxes, property taxes, withholding taxes and license fees. The contract remains in effect until 2041.

Paying for road repairs or helping to reopen schools and the hospital “would be small beans for a multi-billion-dollar oil refinery,” Flegal said. “Instead, what we did is we gave tax break after tax break after tax break.”

Several officials who voted against approving the Limetree contract in 2018 as Virgin Island senators, including Lt. Gov. Tregenza Roach and Department of Agriculture Commissioner Positive Nelson, didn’t reply to requests for comment. The majority of senators, however, voted in favor of approving the contract. Virgin Islands Gov. Albert Bryan, who said in a press release that the refinery was “well-situated to meet growing demands in the region and deliver local economic development,” also did not respond to requests for comment. And the residents of St. Croix were divided, with some adamantly opposed on environmental grounds, but others in favor because the refinery was already there and people needed jobs.

Trump’s Legacy Meets a New Administration

While the White House declined to comment on the Limetree Bay oil refinery, top officials in Biden’s EPA have previously pointed to the facility’s reopening as a prime example of how the Trump EPA failed to protect human health and the environment.

In a 2019 paper for the Harvard Law School’s Environmental and Energy Law Program, Joseph Goffman and Janet McCabe wrote that between 2017 and 2019, the Trump administration had “weakened” rules under the Clean Air Act that would ultimately increase emissions at polluting facilities and decrease air quality for nearby communities.

Limetree Bay Refining LLC on St. Croix (File photo)

McCabe is now the EPA’s No. 2 regulator as the agency’s deputy administrator and Goffman heads the department’s Office of Air and Radiation.

Particularly, McCabe and Goffman said, Trump’s EPA had weakened provisions in the New Source Review rule, which specifically seeks to safeguard communities from increased pollution when a new polluting facility is built or a major modification to an existing one is made. It does that by ensuring new permits require the most up-to-date pollution control equipment.

The rule also aims to ensure that companies share some of the financial burden of monitoring and curbing air pollution, Goffman and McCabe wrote. “Instead, the Trump EPA is treating the competing incentives of profit vs. air quality as irreconcilable and is privileging businesses’ preferences for avoiding costs.”

Trump officials essentially interpreted the New Source Review rule in ways that allow more polluting facilities to avoid the stricter emissions caps required by it, said John Walke, an environmental attorney and director of the Natural Resources Defense Council’s clean air, climate and clean energy program.

In the case of Limetree’s permit, Trump officials ignored decades of EPA precedent that required any facilities shut down for two years or more to essentially apply for a new permit rather than reinstating its old one, Walke said.

The new permit issued by the Trump EPA, he said, grandfathered in old emissions caps at the refinery rather than adopting stricter ones required under the New Source Review rule.

Limetree’s limits on emissions of sulfur dioxide, nitrogen oxide and other harmful pollution were determined by the old refinery’s production levels in 2009 and 2010, when it was refining upwards of 525,000 barrels of oil per day. Those limits remain in place even though Limetree is only proposing to refine less than half as much oil, at around 200,000 barrels per day.

That means the refinery was given tremendous leeway in terms of how much it’s allowed to pollute, likely at the expense of the community, Walke said.

Data requests filed by E&E News and reported in 2019 also revealed that EPA officials under Trump, including then-administrator Andrew Wheeler, rushed the refinery’s permit to ensure the company’s financial viability. One top EPA official wrote in an email that he was there to give the company “anything they need,” the report said.

Valiulis, of the St. Croix Environmental Association, said the local government officials had the same attitude when it came to the approval of Limetree’s permit.

“Whether it is for the government officials’ own personal gain,” she said, “or because they are afraid that Limetree will leave if they are forced to be accountable, the government seems to be allowing the refinery to do whatever they want, no matter how it negatively affects the community.”

A Looming Climate Disaster

In August, one of the refinery’s stormwater pumps failed because of heavy rains. Oil-slicked water spilled from the refinery into an open containment pond and discharged into a nearby harbor—though a containment barrier and cleanup efforts prevented oil from reaching the sea, the company said in a press release.

Valiulis rolled her eyes when she saw the company’s response. “They said it was an unexpected event because of heavy rains,” she said. “But a tropical storm, those happen every year. It’s not like it’s a once-in-a-century hurricane.”

Only a few years ago, historic hurricanes swept through St. Croix. How long until another one hits, Valiulis thought, and what about containing waste water then?

The potential threat is only underscored by climate change, which is making extreme weather more frequent and severe. Warmer air holds more water, and more potential for destruction, scientists have long warned. This hurricane season is expected to be another record year. And a study last year found that the most powerful storms are increasingly forming within striking distance of states in the Southeast and Caribbean islands like St. Croix.

It’s an issue Limetree doesn’t appear to be addressing. The company has no plan to measure or mitigate its greenhouse gas emissions and makes no mention of its role in contributing to global warming in any of the documents it filed with regulators.

In March, the EPA announced that it was investigating the February flaring incident that contaminated Sonya Rivera’s garden. Besides making its way onto 134 roofs and 208 cars, oil was also found in 63 cisterns, Robert Weldzius, Limetree’s senior vice president of operations, wrote in a letter to federal regulators.

Ever since the refinery contaminated St. Croix’s groundwater, cisterns have become a necessity on the island—catching rain to provide water for residents to drink, wash with or, as in Rivera’s case, irrigate their vegetable gardens.

As a consolation, besides offering to clean their cisterns, Limetree provided packages of bottled water to those affected. Rivera remembers the anger she felt when workers showed up at her door with a case for her.

“How are you going to take my food and replace it with water?” she said to them, her voice growing louder.

One worker suggested she go to a restaurant.

Now more than a month since digging it all up, Rivera is back in her garden planting lettuce, greens and okra. This time, she and her husband have raised the beds off the ground to make it easier to recoup their losses should things go wrong again.

“I’m not going to change my lifestyle for them,” she said of Limetree. “All they care about is making money for themselves.”

Kristoffer Tigue is a news reporter for InsideClimate News. Before joining ICN, he covered both politics and business in the Midwest and in New York City. His work has been published in Reuters, CNBC, MinnPost and the Midwest Center for Investigative Reporting. Tigue holds a Master’s degree in journalism from the Missouri School of Journalism.

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