Senators Unconvinced Limetree Bay Refinery is Prepared to Reopen Months After Oil Spill Affected Thousands of St. Croix Residents Under Old Management

Business Published On July 15, 2022 05:35 AM
Elesha George | July 15, 2022 05:35:06 AM

Charles Chambers, the largest shareholder in Port Hamilton Refining and Transportation, and CEO of West Indies Pretroleum. By V.I. LEGISLATURE

The principal owner of the recently purchased Limetree Bay Refinery in St. Croix could not have been less prepared for the onslaught of questions posed by senators in the Committee on Economic Development and Agriculture on Thursday, regarding shareholders’ ability to restart a financially sound and environmentally safe plant. 

After a drawn out and confusing bidding process, Port Hamilton Refining & Transportation was named as the majority shareholder in the refinery – owning 42 per cent of the company, according to Charles Chambers, the principal owner of Port Hamilton Refining & Transportation.

Mr. Chambers, who is also the chief executive officer at the West Indies Petroleum Limited — which deposited an initial $3 million dollars to secure the bankrupt facility — expects the refinery to become operational in the second quarter of 2023. The plan is to restart the refinery at a capacity of 180,000 barrels of oil daily.

But before they can reopen the second largest oil refinery, they must convince lawmakers in the Virgin Islands that they have the finances, equipment and investor support to do so safely.

"We are moving assiduously towards a restart and we communicate and maintain an open line with the EPA. Whatever the EPA ultimately requires in order for us to restart is what we will give the EPA," Mr. Chambers said as he pushed the companies mandate to restart safely.

“There are a number of people and processes in place. We are going to restart the refinery, first of all safely, and second of all in an environmentally conscious way for us and for all of the people of St. Croix, the U.S. Virgin Islands, the Caribbean and the United States”, he assured.

Reopening also means that the new owners would need to obtain a Prevention of Significant Deterioration (PSD) permit from the Environmental Protection Agency. They would also need to submit a proper Root Cause Analysis (RCA), and to apply for a new water pollution permit.

In the meantime, Fermin Rodriguez, PHRT acting vice president said Port Hamilton is willing to work with the Department of Planning Natural Resources (DPNR) to coordinate efforts that will allow DPNR to receive instant data about the level of emissions in the atmosphere.  

“Right now, we have a computer system that indicates all the monitors information in the headquarters of the EPA," Mr. Rodriuez said, adding that while the same does not exist with DPNR, it is something that can happen.

Mr. Rodriguez also shared that the refinery would no longer be self-monitoring but that monitors would be linked with the EPA and DPNR. Monitors are currently placed outside of the refinery and on its perimeter fence to manage emission output.

But four hours of discussions was simply not enough to sway legislators to buy into the new owners’ plans to reopen. 

“When you speak about potentially starting over fractions of the refinery with maybe 170 people, numbers like that concern individuals like me because I remember when the refinery had thousands of people just to operate it,” said Senator Alma Francis Heyliger, who added that it represents about 10 percent of the people who once worked at the plant.

She said the small number of employees raises concern about safety issues.  

“I came with an open mind, I listened attentively and I gave the benefit of the doubt but I’m still not satisfied,” added Senator Dwayne DeGraff, who quickly noted that he was never in favor of a refinery when the original bill came before the Senate several years ago. 

“I wasn’t satisfied then, that is why I didn’t support it then, so if we had to take a vote on it today again, my answer would still be no,” he said, weighing the economic benefits of operating the refinery with the impact on lives. 

Senator Novelle Francis Jr., who is a cancer survivor also had doubts about reopening the plant in the absence of strict health and safety measures. 

“I want to go on record to say I do support the Limetree Bay Refinery. At this time however, I do have certainly some reservation regarding the safe emissions coming out of the refinery in whatever form of ownership that it now possesses.”

Non-committee member Senator Franklin Johnson who said he was directly affected by the massive flare incident on May 12, 2021, was also not convinced that the refinery was ready to reopen.

“I’m not comfortable listening to the answers that my colleagues are getting here,” the senator remarked. “This island might be small and quiet,” he went on, “but trust me the people of this island don't take much – they don’t.”

Mr. Johnson noted that while the principal owner repeatedly spoke of operating in a safe environment, those words were not enough to convince the people of St. Croix who were affected by numerous toxic emission events.

“It’s good hearing that but it’s going to take a lot more convincing for the people of this island, especially the people of Frederiksted who suffer most from that contamination dropping on their roof. It’s not settled yet with them,” he stated further.    

For Mr. Johnson, who has also been directly affected by years of emissions, his concern was the quick pace in which the new owners of the refinery planned to reopen. “The timeframe that you’re talking about, I think we’re looking to rush the brush and I sure don’t want to give a dab with chemicals on my roof again,” he said sternly.

“The people of this island suffered greatly and only God knows how many of them going to end up with cancer or some disease or something down the road from the contamination and that fumes that was stuck in their house.

“It wasn’t easy, those days, very difficult days. People are not going to let that go very easy,” Mr. Johnson remarked. 

Although not present at the hearing, Wayne L. Biggs, chief executive officer at the V.I. Economic Development Authority (EDA, wrote in his testimony that the authority “did not support the reopening of the refinery."

Meanwhile, non-committee member Janelle Sarauw questioned the readiness of Port Hamilton to receive investors. 

“Today, there is minimal transparency about this refinery restarting. The numbers are off, we don’t know who your investors are, you’re being funny with the numbers and how much it will cost to restart the refinery,” she said, explaining to Mr. Chambers, the Port Hamilton chief executive, that you “can’t put a monetary value to any life."

“The money that you make on one end you lose on the other end on the high cost of healthcare to keep our people healthy in this territory.”

The Limetree Bay Refinery filed for bankruptcy in July 2021 for the second time since it opened in 1966, back then it was named Hess Corporation, PDVSA.

During the latest restart effort, which was first initiated by ArcLight Capital Partners LLC, Investors who had injected approximately $1.4 billion failed in their attempt to revive the decades-old facility. To make matters worse, an initial restart of the site was abandoned after thousands of residents were affected by toxic emissions that spewed oil on their homes and contaminated drinking water.

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