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Charlotte Amalie
Sunday, May 22, 2022
HomeNewsLocal newsA refinery rained oil on thousands of St. Croix homes. Now it...

A refinery rained oil on thousands of St. Croix homes. Now it could reopen.

Valda Austrie visits the gravesite of her father at King’s Hill cemetery in St. Croix, U.S. Virgin Islands, in December. Matthew Austrie, 83, spent time in one of his residences near Limetree Bay refinery. (Salwan Georges/The Washington Post)

Editor’s note: For many years the Source offered direct links to respected news outlets across the globe. When several of the publications adopted paywalls, the links were removed. Because of the importance of the U.S. Virgin Islands’ connections to the rest of the world, the Source licenses articles from sources such as the Washington Post, selected for their local relevance.

The idle Limetree Bay refinery on this tropical Caribbean island doesn’t look like much of a prize.

In May the Environmental Protection Agency ordered it shut down after a series of accidents that showered oil droplets on nearby homes and shrouded neighbors in noxious odors, sending residents to emergency rooms. It is mired in litigation, including class-action lawsuits. And last month, the Occupational Safety and Health Administration filed a citation listing 19 “serious” violations and proposed that Limetree pay more than a quarter of a million dollars in penalties.

Despite all that, the massive oil and gas operation appears to be on the verge of reopening. Three potential buyers are vying to win control of the 200,000 barrel-a-day refinery in a bankruptcy hearing today (December 21). And the island’s governor, Albert Bryan, D, has lobbied EPA officials to allow whoever acquires the refinery to reopen it quickly in accordance with a permit granted to Limetree by the Trump administration.

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Bryan did not respond to requests for comment.

But the push for jobs has opened fissures on an island whose largely Black and Brown population has played a key role in sustaining America’s fuel supply while bearing the brunt of the harm from it. Now the Biden administration, which has made environmental justice a central part of the president’s climate agenda, must soon decide how to address the environmental inequities linked to race and income here.

People sun bathe and children swim at Dorsch Beach near the town of Frederiksted in March. Tourism is a major industry on the island. (Washington Post photo by Salwan Georges)

Now the action moves to a Texas court. U.S. Bankruptcy Judge for the Southern District of Texas David R. Jones is set to hold a hearing on the plant’s sale.

The leading suitor is a combination of a Jamaica-based company, West Indies Petroleum, and a Canada-based sugar refinery, Port Hamilton Refining, which bid $62 million for Limetree Bay at an auction Saturday. If the partnership fails to close on the sale by late January, a newly formed company, St. Croix Energy, could take over with its second-place $57 million bid. Two other investors, who hoped to dismantle the refinery and acquire its parts, were outbid.

The judge will have other considerations. Any new plant owner will have to invest major sums to run it safely. During a recent bankruptcy hearing, a restructuring expert testified that it would cost between $100 million and $150 million to ensure the refinery could be permitted by the EPA, and it would “likely require tens of millions, if not more” to have the working capital to operate it.

The decisions Jones makes more than two thousand miles away in Houston will affect businesses and residents across this Caribbean island.

Keith O’Neale Jr., president and chief executive of O’Neale’s Transport, said Limetree was his biggest customer. “We were moving, just from Limetree alone, 50 or 60 containers per week, coming off the ship and delivering it into the plant,” he said.

But he experienced many of the ills that others complained about.

“About six feet separates my company from Limetree,” O’Neale said. “Sometimes, early in the morning, we would come in and there would really be this acrid smell. I had employees with compromised immune systems and asthma, and they couldn’t work in those conditions.”

Biden administration officials, who cited an “imminent” threat to public health in May, have questioned whether the refinery should be allowed to reopen. They have scrutinized how the Trump administration issued a permit, called a Prevention of Significant Deterioration, which allowed Limetree to open earlier this year. West Indies Petroleum, which did not comment, has indicated publicly that it would apply for a new permit before restarting the refinery, a process that could take a year or longer. St. Croix Energy proposed to resume operations as soon as possible under the existing Trump authorization.

“This administration’s track record with respect to this refinery speaks clearly,” EPA Administrator Michael Regan said in an emailed statement. “EPA will not hesitate to use all of our authorities to protect this community from dangerous pollution stemming from this refinery. We will continue our ongoing engagement with the community, with the territory, and with any new owner, but rest assured, we will do what it takes to ensure the people of St. Croix are safe.”

On Feb. 1, Limetree resurrected what had once been one of the world’s largest oil and gas refineries. Three days later, an accident produced a cloud-like vapor that floated for several miles and rained droplets of oil on neighborhoods. Cisterns were contaminated and oil still stains their rooftops.

Limetree’s environmental debacle added another chapter to the refinery’s dismal history. Its previous owner, a partnership between Amerada Hess Corp. and Petróleos de Venezuela, S.A. known as Hovensa, shut down in 2012 after suffering $1.3 billion in losses over three years. It left an environmental disaster: 300,000 barrels of petrochemicals leaked from underground pipes, polluting the island’s one aquifer, according to a finding in 1982. Bankrupt, Hovensa walked away without having to adequately fund a cleanup or fully pay class-action plaintiffs.

Even people who benefit greatly from the refinery are concerned about it reopening.

“When you spray oil over people’s houses and farmland, I’m never going to say that’s more important than my bottom line,” said O’Neale, whose profits have declined, forcing him to cut the hours of his workers.

Meanwhile, residents in the affected areas are still grappling with the refinery accidents months after they took place. Thousands still cannot use their cisterns for potable water, relying instead on cases of bottled water distributed through Limetree’s oil terminal.

Phyllis Blackman, president of the Williams Delight Homeowners Association in Frederiksted, said that she constantly hears about lingering contamination and other problems from some of her association’s 11,000 members.

“They all complain to me,” said Blackman, who had oil on her roof and in her cistern at one point.

Phyllis Blackman, 73, checks on a barrel that she uses to collect water from her roof. Two of Blackman’s daughters worked at the Limetree Bay refinery when it was operating. (Washington Post photo by Salwan Georges)

After Limetree representatives confirmed that they had rained oil on her neighborhood, Blackman said she was offered $3,900 in compensation. She signed the agreement, but never received the money because the company went bankrupt. She added that she thinks other island industries may still be polluting her home and water supply.

Blackman had two daughters working at the plant before it shut down. One of them, Shakiema Hutchinson, remarked that when it came to the refinery, “They closed it down, and we’re back to zero again, with no work.”

A Limetree Bay spokeswoman, Tara Graham said in an email that the company could not comment on Blackman’s claims, or other allegations that the plant’s emissions could cause long-term health problems. “Unfortunately, Limetree is unable to comment on any pending litigation,” she said.

The lawyers suing Limetree Bay have seized on OSHA’s findings to bolster their case. The citation identified flaws in Limetree’s design, operation and accident response, and suggested they all contributed to mishaps that caused the shower of oil and noxious odors that impacted its surrounding area.

The errors OSHA flagged included failing to design a system that would take into account a change in fuel products; not documenting that its safety equipment “complies with recognized and generally accepted good engineering practices”; and sending workers during an accident to a “safe room” that was not safe. It “was not equipped with appropriate engineering controls” to guard them against a toxic release, OSHA said.

Asked about the citation, which Limetree is contesting, Graham said, “the safety of our employees is of utmost importance to the company. Limetree Bay Refinery has cooperated fully with OSHA throughout their investigation and is working with them to address the findings.”

Frandelle Gerard, executive director of Crucian Heritage and Nature Tourism, helped conduct a community survey with Bennington College and local nonprofits to gauge the refinery’s health impacts.

Residents are still seeking information about what happened, Gerard said, and the government has failed to publicly issue a health report.

“We had people passing out and children throwing up. What all were people breathing? What was in the air?” Gerard said. “We don’t know. There’s still a lot of questions.”

The family of Matthew Austrie is among those still searching for answers.

On May 8, he was sitting on his bed with his head in his hands when his daughter looked in the room. “What’s wrong with you?” his daughter Valda asked. “My head hurts,” he replied.

Three days later, Austrie, 83, started to vomit. Ten days later, he suffered a massive stroke. Within six weeks, he was dead.

How and why the healthy-looking Austrie suddenly became ill is unclear. On the day he first felt sick, he had gone about his daily eight-hour routine, puttering around the garden of a second house he owned near the refinery.

As she recounted her father’s last days, Valda Austrie, 50, wept. “He was fine all the time,” she said. “I just want my daddy back.”

“I don’t know what to think about it,” she said. “I didn’t want to go to a lawyer and relive everything, so I leave it in the hands of God.”

Others tout the refinery as the best available path to salvation.

The closing of the refinery so worried Gregory Hodge, an island native and musician who goes by the name DJ Avalanche, that he recorded a rap song to describe the financial hardship that would await residents.

“No more money from Limetree, the money man ‘dem pockets, they empty,” says “The Limetree Song (Eh Ruff).”

A large company such as Limetree, Hodge said, “should be able to address all the environmental concerns” while remaining open. “At the end of the day, financially, we have to find a way to keep going out here.”

St. Croix Energy founding partner Yohana Manning said he and his fellow investors – whom he wouldn’t disclose – are seeking to bring back jobs to the community.

“We’re tired of asking people for things. We just want to work for what is ours,” Manning said. “We want to save this refinery at all costs.”

Manning’s firm challenged the auction’s outcome in court on Sunday, arguing it was unfair because West Indies Petroleum and its partner were closing on the sale nearly a month after the date all the other bidders had initially set, Dec. 22. It also suggested St. Croix Energy’s bid was more attractive because it could “immediately begin the process of restarting the refinery using” the permits that had been issued under Trump.

Bay Ltd., another company that is hoping to buy the plant and scrap it, has also filed an objection to the sale.

Manning said he hoped federal officials would not delay the refinery’s revival.

“If Administrator Michael Regan is listening, we come in peace,” Manning said, before adding, “We also have some good lawyers, too.”

Indeed, the one thing St. Croix residents do not lack at this point is lawyers. Lee Rohn, a plaintiff’s attorney who successfully sued Limetree’s predecessor, Hovensa, said many of the clients she now represents in a class-action lawsuit against the refinery worry that the toxic fumes they were exposed to earlier this year could lead to cancer or other ailments years from now.

“It’s like a ticking time bomb,” she said, “that they’re waiting to see when it’s going to explode.”

The Limetree oil refinery is seen in the distance in December. (Washington Post photo by Salwan Georges)
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