By Norris McDonald
The Virgin Islands St. Croix Refinery (HOVENSA), the second largest refinery in the United States, has been closed for two years. Approximately 2,500 jobs were lost when the refinery closed in 2012. The refinery is the largest private employer in the Virgin Islands, which has approximately 108,000 residents.
A new governor will be elected in the Virgin Islands on Tuesday, November 4, 2014. U.S. Congressional Delegate Donna Christensen won the primary, which will probably translate into victory in the general election. Christensen would be the first Black female Governor of the Virgin Islands. Christensen is an energy expert having served on the House Natural Resources Committee for years. It will be interesting to see if the new governor can get this refinery reopened so that the needed jobs can be restored.
HOVENSA generated a minimum of $60 million a year in revenue for the government, about 1/10th of its $700 million annual budget.
The facility has also been plagued by serious economic and environmental challenges. HOVENSA was losing money when it closed. 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.
HOVENSA is currently vetting potential buyers for the refinery through investment banking firm Lazard. Lazard is marketing the refinery through its offices in New York City, Houston and Paris.
For most of its operating life as HOVENSA it supplied heating oil and gasoline to the U.S. Gulf Coast and the eastern seaboard with the crude mainly sourced from Venezuela. At a capacity of about 500,000 barrels per day as of 2010 it was in the top 10 largest refineries in the world. Hess Oil Virgin Islands Corporation started refinery construction and operations in 1966. (Wiki, Virgin Islands Daily News, 4/25/2014)