Monday, October 20, 2014

Hovensa (Hess) Oil Refinery In The Virgin Islands

A History of Environmental Problems

HOVENSA Refinery
The Fourth Amendment to the Hovensa Concession Agreement, was negotiated between Hovensa, which stopped refining in 2012, and the Virgin Islands government and includes a 14-month sale process for the former refinery.  The agreement called for the refinery to be sold by Aug. 15, 2014. If no one buys it, Hovensa can continue to operate the refinery as a storage facility for up to five years from the ratification of the agreement.  If the refinery is sold within a year (it wasn't), Hovensa would be freed from its obligations to the Virgin Islands government and a new concession agreement would be negotiated with the buyers.

Hovensa would not be freed from its environmental obligations governed by the Environment Protection Agency. HOVENSA entered into a consent decree with the U.S. Environmental Protection Agency and Justice Department and agreed to invest $700 million on pollution controls after a series of chemical releases affected people living downwind from the refinery. Hovensa also agreed to pay a $5.4 million penalty for violating the Clean Air Act.

Cleanup at this site is being addressed by the U.S. Environmental Protection Agency (EPA), under authority of the Resource Conservation and Recovery Act (RCRA).  As a result of relatively slow leaks from process and storage areas, as well as from the underground “oily-water” sewer system , extensive phase separated petroleum hydrocarbon (PSPH) plumes (also known as "oil") are present floating on top of the groundwater underlying the facility, and dissolved phase hydrocarbon constituent (DPHC) plumes are present within the groundwater itself. The Virgin Islands is in EPA Region II.  EPA Region II serves New Jersey, New York, Puerto Rico, US Virgin Islands and Eight Tribal Nations.

Although not utilized for many years, former drinking water wells are present at the Barren Spot well field, located just north of the HOVENSA facility. There is little potential for a threat to the Barren Spot wells, since they are hydraulically upgradient of HOVENSA. Nevertheless, any threat from HOVENSA would be detected by a series of monitoring wells located along HOVENSA's northern perimeter, which are sampled semi-annually to see if dissolved phase hazardous constituents or free oil are present. In addition, an ongoing program of leak detection and repair is designed to prevent or minimize further releases.

Government officials reached a settlement agreement in June 2014 with several companies (including Hess Oil Virgin Islands Corporation and HOVENSA, LLC) identified as responsible for damaging the environment in St. Croix's south shore industrial area. The settlement, expected to be in the neighborhood of $135 million, could add $40 million directly to the Virgin Islands government General Fund. The government lawsuits contended that the defendants' operations injured and contaminated the public's natural resources, including potential drinking water, the marine environment, plant life and wildlife.  Specifically, the lawsuit contended that Hess Oil and HOVENSA contaminated the land and water from the 1960s until recently with their petroleum and other wastes.

The Virgin Islands Department of Planning and Natural Resources (DPNR) is still in litigation with Hovensa over groundwater contamination and cleanup. Hovensa wanted to include environmental issues in the agreement, but the government would not do so. Hovensa is still on the hook to clean up the site. Hovensa's continued obligation for environmental issues is covered by the phrase "as otherwise required by law." Federal law prevents Hovensa from getting rid of its liability.

What obligation does Hovensa have under Superfund?  What would that remediation cost be and how long would it take.  How many jobs could come out of the clean up?
What are the health, environment, and ecological short and long term ramifications of a continued island society with a refinery as one of its largest private employer?

We agree with Virgin Islands Congressional Delegate Donna Christensen:
"If a new refinery converts to natural gas and focuses on lighter grades of oil than the heavy Venezuelan crude Hovensa used, it could provide a crucially needed economic boost and still be dramatically less polluting than the old refinery."
Nothing in the Fourth Amendment alters HOVENSA’s obligations under the Clean Air Consent Decree and Territorial environmental laws and regulations. In fact, the Amendment specifically requires that HOVENSA comply with all applicable environmental laws and regulations, consent decrees, and orders.

The HOVENSA, LLC Clean Air Act Settlement (consernt decree) reqires HOVENSA to establish a $4.875 million “Virgin Islands Territorial SEP Fund” to support one or more projects to be implemented for the benefit of the Virgin Islands. Projects to be funded by the Virgin Islands Territorial SEP Fund are to be determined jointly by HOVENSA and the Virgin Islands, in consultation with EPA and in consideration of the project’s environmental, public health, pollution prevention or reduction benefits.  [Note: These funds are currently in escrow and the project details are being negotiated and finalized with DPNR (representing the Government of the Virgin Islands) for a children’s cancer center on St Croix under the USVI Dept of Health. The agreement had to be made with the consent of the US Dept of Justice, the EPA, HOVENSA LLC and the Government of the US Virgin Islands.] (St. Thomas Source, 10/17/2014, St. Thomas Source, 7/24/2013, EPA, Virgin Island Daily News, 6/14/2014,EPA Consent Decree)

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