Refinery once key to New York’s fuel supply has been closed

Through Sheela Tobben at 05/16/2021

(Bloomberg) – The Environmental Protection Agency has ordered the shutdown of a refinery in the U.S. Virgin Islands that historically was positioned as a key fuel source for the East Coast due to public health concerns.

Limetree Bay Refinery

The 200,000-barrel-per-day Limetree Bay refinery in St. Croix is ​​required to suspend operations after repeated operational violations, according to the EPA. Since February, the facility has experienced major operational issues, culminating with an incident earlier this week that forced its owners to shut down the plant after spitting oil droplets at nearby communities and drinking water. contaminated.

“These repeated incidents at the refinery have been and remain totally unacceptable,” said Michael S. Regan, administrator of the EPA. “This already overburdened community has suffered from at least four recent incidents in the facility, and each had an immediate and significant impact on the health of people and their property.”

The refinery shutdown comes days after a cyberattack on the Colonial Pipeline revealed how reliant the U.S. east coast has become on a single pipeline for gasoline and diesel. The location of the Caribbean refinery is ideal for quickly and inexpensively transporting fuel to the Atlantic coast, as shipments from the U.S. Virgin Islands are exempt from the Jones Act, meaning that foreign ships can carry large amounts of fuel. gasoline and diesel on the domestic market without derogation.

The EPA was monitoring the growing list of incidents at the Limetree Bay refinery, located in a community disproportionately affected by environmental burdens. The misadventures have raised significant environmental justice concerns, which are a priority, the agency said in its statement Friday.

The agency ordered Limetree Bay to request an independent audit of operations and then submit a plan for approval that responds to the auditors’ recommendations for corrective action.

Previously known as Hovensa, the Sainte-Croix refinery was previously owned by Hess Corp. and Petroleos de Venezuela SA, a Venezuelan state-owned company, before it closed in 2012. Its current owners include ArcLight Capital Partners, Freepoint Commodities and EIG Global Energy Partners.

In an emailed statement, a company spokesperson said Limetree Bay voluntarily shut down the refinery on Wednesday after a flaring incident caused by a disruption at a coker unit. The company is focused on investigating and cleaning up areas of the community affected by the incident, and will fully cooperate with the EPA order. “We are committed to operating a secure facility.”

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