The EPA Is Asking a Virgin Islands Refinery for Information on its Spattering of Neighbors With Oil

The Environmental Protection Agency is asking the owners of a recently restarted oil refinery in the U.S. Virgin Islands to turn over information related to a February event that spattered more than 130 homes with oil and contaminated the drinking water for dozens of residents.

In a letter sent earlier this month to executives of the Limetree Bay refinery, federal regulators requested a host of information pertaining to the Feb. 4 flaring incident, including a detailed report of how and why it happened, who was impacted and what was done to mitigate the damage and prevent it from happening again. The flare, which was the result of a safety valve releasing a buildup of steam inside the refinery, occurred after extremely hot equipment was accidentally exposed to a large amount of water.

But the letter also asked for information that could be seen as going beyond the scope of the agency’s flare investigation, seeking information about the refinery’s current operating status, copies of its compliance certifications and a list of any other accidental air pollution releases since the plant’s restart. 

The expansive nature of the requests led some legal experts to believe the EPA could be preparing to take additional action against Limetree.

“It was a fairly wide-ranging information collection request” that extends “well beyond the one flaring incident,” said John Walke, director of the Natural Resources Defense Council’s clean air, climate and clean energy program and a former attorney with the EPA’s Office of General Counsel.

Walke, who served in the Clinton administration and specialized in Clean Air Act permits, said he noticed that the agency was asking for several documents that could point to a broader investigation. They include the refinery’s deviation reports, which document anytime the facility departs from any permit requirements and can subject the manager who signs off on them to criminal fines if the information is found to be false, he said.

The refinery, located on the territory’s southern island of St. Croix, closed in 2012 after its previous owner agreed a year earlier to a $700 million consent decree with the EPA mandating various environmental and pollution control improvements. The plant reopened earlier this year under a permit granted by the Trump administration in 2018. 

Environmentalists say permitting the plant’s reopening was a clear example of Trump’s unfettered and irresponsible deregulatory agenda and his administration’s penchant for granting sweetheart deals to well-connected corporate interests late in his term. In Limetree’s case, the administration ignored decades of precedent when considering the new permits and expressed a willingness in emails to the refinery’s new owners to do almost anything they needed to restart it.

The latest investigation into the Feb. 4 flaring event is just one of several developments in recent weeks that have cast doubt on the future of the refinery. 

On March 25, the agency withdrew a key air pollution permit for the plant that would have allowed the company to expand its refining operations in the future, citing environmental justice concerns and saying the agency needed to further review how to best safeguard the community.

Last week, Reuters reported that three of the company’s top executives were stepping down. And on Friday, at the behest of the EPA, the Department of Justice asked a federal court to formally transfer the ownership of the 2011 consent decree from the plant’s former owner to its current one, Limetree Bay Ventures.

When asked about the recent developments, Limetree responded in a statement saying it has been working “closely with our community and our regulators, investing billions of dollars to reopen and operate a modernized refinery and create hundreds of high-skilled, well-paying jobs for St. Croix residents.”

The 2011 consent decree ordered Hovensa, the plant’s previous owner, to spend more than $700 million on pollution control upgrades to reduce emissions and pay for projects that would improve the environment of St. Croix after regulators found that the facility was in violation of the Clean Air Act. Limetree negotiated with the Trump administration last summer, agreeing to take on full liability of the Hovensa consent decree, but with several Clean Air Act exemptions included and stating it would make “commercially reasonable” efforts to meet all its requirements.

Local environmental groups welcomed the news that the EPA would hold Limetree accountable for commitments made by Hovensa. But the announcements also raised questions with the groups about how the agency, as well as the Virgin Islands government, has been conducting oversight on Limetree and whether the safety and well-being of the communities living near the refinery have been overlooked for profit.

Much of the information requested in the EPA’s letter should have already been known by the agency when Limetree restarted its operations in February, Walke said. And residents have complained that local officials have been far too lenient with the plant’s owners because they’re afraid of losing the millions of dollars in annual tax revenue that the refinery is expected to bring the territory.

Locals are also aware of the long history the plant has with fouling St. Croix’s air and water without much public attention. The refinery leaked more than 43 million gallons of oil into the island’s only aquifer between 1982 and 2011, when the extent of the leak was fully realized.

Regarding the Feb. 4 flare incident, it took Limetree more than a month to release any public statement on the incident that shot oil into the air and across an entire neighborhood, leaving many residents confused over what had happened.

The Virgin Islands Department of Planning and Natural Resources, which handles the territory’s environmental regulation, reportedly ignored questions from local media regarding the event. The department’s spokesman, Jamal Nielsen, also did not respond to specific questions from Inside Climate News regarding the flaring event for almost a week before pointing to Limetree’s statement upon its release.

Jennifer Valiulis, executive director for the St. Croix Environmental Association, said that neither Limetree nor the Virgin Islands government have been transparent in their dealings, and that it’s been difficult for her organization to track what’s happened at the refinery since it reopened. Even now, the plant has reportedly shut down operations due to an undisclosed mishap, according to Reuters.

Valiulis said local residents have also been left in the dark when it comes to $4.9 million that Hovensa was ordered to pay under the 2011 consent decree—in addition to the $700 million in pollution control upgrades—that was specifically meant to go toward environmental improvement projects. For years, many believed the $4.9 million was never paid, Valiulis said. 

But last week she said she learned from an EPA press release that Hovensa had paid the $4.9 million and that nearly all of it has sat untouched in an escrow account for the past decade.

Only about $315,000 of that money has been spent on health research, an EPA spokesman said.

The EPA said that the Department of Planning and Natural Resources has authority over how the remaining $4.5 million gets spent. But in an email, Nielsen said that the money was going toward paying for the territory’s cancer registry, which has been in development since 2017, and deferred further questions to the Virgin Islands Department of Health.

To Valiulis, the recent events, including the confusion around the consent decree money, have left her feeling even less confident that the Limetree Bay refinery is being properly run and regulated.

“It seems that the local government is not doing much to make sure that Limetree is operating safely and holding them accountable for their impacts on the Croix community,” she said. “It appears that they are relying on the EPA to do all the work and even the EPA is just playing catch up with regulating Limetree.”