Wednesday, October 29, 2014

African-American Voters Concerned About Economic Costs of EPA Regulations

African-American Voters Concerned About Economic Costs of EPA Regulations

Survey shows economy and jobs top priority, climate change lowest priority

A new survey reveals that a majority of African-American voters are concerned about the adverse economic impacts of the Environmental Protection Agency’s proposed carbon regulations and significantly less concerned about climate change, a major pillar of President Obama’s regulatory agenda.

According to the survey, climate change was the issue of least importance this election among 11 “hot-button” issues including healthcare, education, national security and defense, immigration and welfare and poverty. Jobs and the economy were the top policy priority for African-American voters.

Nearly 80 percent of African-American voters said they are “very concerned” about their personal budgets and finances. Three-fourths of African-American voters surveyed expressed concern about rising energy costs for their homes and businesses and a strong majority of 63 percent said they were concerned specifically with the impact of EPA’s regulations on energy costs.

Instead of issuing new climate change regulations, six out of ten African-American voters said they would rather see the Obama Administration promote regulations that maintain affordable energy prices. According to Harry Alford, president of the National Black Chamber of Commerce:
“With so many pressing issues looming, both here at home and beyond our borders, President Obama has pursued his misguided climate change agenda with tunnel vision, ignoring the fundamental concerns of African-Americans, like our economy, healthcare and education. The African-American community is already gravely concerned about their personal and business budgets and finances, and EPA’s climate change regulations will only exacerbate their financial woes.”

“With important midterm elections next week, and the 2016 presidential election on the horizon, elected officials should pay close attention to these survey results to understand the real policy priorities of African Americans.”
When asked what issues impact their community most significantly, climate change was again at the bottom of the list among those voters polled, with a scant three percent of African Americans viewing the issue as being most impactful. Instead, an overwhelming majority agreed that issues like unemployment, lack of education and income inequality had the most impact on the African-American community.

A majority of African-American voters believes that policymakers in Washington, D.C., are focused on the wrong priorities, while a plurality of African-American voters believe that the United States is falling behind other global powers.

Recognizing the dearth of polling data for this key voting demographic in advance of the midterm elections, especially with regard to energy and the environmental policy, NBCC partnered with ACCCE in sponsoring the poll, which was developed and administered by Paragon Insights. Conducted online between October 17 and 21, 2014, the survey gauged responses from 2,289 registered African-American voters. The margin of error was 2 percent. VIEW THE POLL HERE

Virgin Islands Senate Should NOT Approve Hovensa Refinery Sale


By Norris McDonald

Many things do not seem right about the prospective sale of the Hovensa Refinery in the Virgin Islands to the newly created company Atlantic Basin Refining, Inc. (ABR).  First, does a 'new' company have the resources to not only 'purchase' the facility, but to also have the deep pockets to rebuild the plant, set up a clean up fund, provide payments to the government and have the funds to clean up the site if they do not reopen the facility?  The agreement gives them 2 years for engineering studies to reopen the facility.  Really?  Sounds like more delay to me.  Delay, delay, delay.  And more delays.  Ongoing delays put off the day of clean up indefinitely.  And this, I fear, is the ultimate goal of this ruse.

This company doesn't even have a website yet.

Neither the Virgin Islands government nor the citizens of the island will benefit from this deal in my opinion.   There will be no jobs and no environmental remediation.  Just more delay.  It appears to be smoke and mirrors that will lead to more complexity in untangling this web when the day of reckoning (environmental clean up) finally comes. 

Hovensa is a petroleum refinery located on the island of St. Croix in the United States Virgin Islands. The refinery is a joint venture between Hess Corporation and Petroleos de Venezuela, S.A (PDVSA).  We are concerned about Hovensa remediating the site and honoring the clean air consent decree.  We are also concerned about whether a foreign company, PDVSA, will be held accountable for polluting a black community in the United States.  Surely the Venezuelan government has the funds to clean up the site.

The U.S. EPA does not appear to be enthusiastic (to put it mildly) about holding Hovensa's feet to the fire.  EPA, in response to AAEA inquiries, is insisting on keeping Hovensa in the Resource Conseravtion Recovery Act (RCRA) Program instead of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA-Superfund) Program.  EPA insists to us that the site can be remediated under RCRA just as effectively as under CERCLA.  We strongly disagree.  The Hovensa refinery needs to be regulated only under the Superfund Program.  Also, does RCRA apply to a foreign company, PDVSA.  And does the law have the power to hold their feet to the fire if they decide to take a walk on clean up?

The U.S. EPA and the U.S. Justice Department should at least review the operational agreement between the Virgin Islands government and the purchasing company BEFORE THERE IS A VOTE.  Does the agreement include a provision that gets Hovensa out of liability for the clean up?  How does RCRA apply in this case?  We know that CERCLA's 'Joint and Several Liability clause would keep Hovensa and Hess on the hook for the clean up costs. 

Specifically, according to senators, Atlantic Basin Refining initially plans to purchase only the HOVENSA company and not its assets. Huh? What does that mean? Particularly in terms of clean up liability. Atlantic Basin then plans to enter into an agreement with an engineering firm - in this case, Samsung - to do a complete assessment of the refinery, which could take up to 12 months.  According to one of the Senators, the engineering assessment phase is necessary for the company to get financing for purchasing the assets of the refinery. Huh?  They have to 'get financing' to actually buy the facility.   Who is putting up this money?  Do they have a commitment from a specific source to put up this money?  What kind of deal is this?  And what are the implications for liability for environmental clean up?

Hovensa Refinery
It is estimated that the cost of constructing and rehabilitating the refinery and bringing it back online is expected to exceed $1 billion.  Where does a start up company get that kind of cash? The Government House statement indicates that under the operating agreement, the new owners would be required to make substantial payments to the government totaling over $1.6 billion in fixed payments (instead of taxes) over the life of the agreements (22-year term - with two 10-year renewal options) and additional variable payments depending on the refinery's profitability. Where does a start up company get this kind of money?  Hovensa lost over a billion dollars in its last couple of years of operation.  We doubt the refining marketplace, notwithstanding the advent of fracking and horizontal drilling, has progressed to the point where a start-up company cannot only make a profit, but also have the cash on hand to pay the Virgin Islands government, reconstruct and rehabilitate the refinery, put up escrow funds for clean up and actually have the funds on hand for ultimate clean up.

We have serious doubts about the legitimacy of this deal. (Virgin Islands Daily News, 10/28/2014)

Hovensa Set To Sell St. Croix Refinery To Atlantic Basin Refining, Inc.

The Hovensa refinery owners have reached a tentative agreement to sell the plant to a new company called Atlantic Basin Refining Inc.(ABR).  ABR is headed by a group of individuals with experience in refining, energy finance, oil trading and environmental restoration, according to Government House.  Virgin Island Senators identified local connections, with Jack Thomas of St. Croix Renaissance Group being one of the principals, along with others from off-island. The other principals include Robert Moore, William Forrester and Steve Schmitz, according to senators. Local attorney Mark Eckard, who is chairman of the board of the St. Croix Chamber of Commerce, was also with the group, although it was unclear whether he is acting as its legal counsel or if he is participating in the venture.

The Virgin Islands government has negotiated an operating agreement with ABR, a company formed specifically to buy the shuttered Hovensa refinery.  Gov. John deJongh Jr. met on Monday with members of the Virgin Islands Legislature, who must approve the new operating agreement, to discuss the development.  The next step involves "delicate negotiations" with ABR and the government over the operating agreement.  The Legislature still has to approve the operating agreement for the sale to be finalized.

The government negotiated an operating agreement requiring ABR to rebuild and restart the refinery, to employ hundreds of Virgin Islanders and to make substantial payments to the government totaling more than $1.6 billion in fixed payments over the life of the agreement and additional variable payments depending on the refinery’s profitability.

For the first time ever, owners of the refinery will be required to take the facility down and clean up the site if they do not restart the refinery or if it is again shut down at any time in the future, according to the Government House.

The operating agreement also requires the new owners to pay into a site restoration fund that will pay for the ultimate deconstruction and take-down of the refinery and remediation of the site.

After the restart, the refinery is expected to employ over 700 workers, with over 500 full-time employees and over 200 contractors" according to the governor. Once restarted, the refinery will provide a tremendous boost to the St. Croix economy and generate hundreds of additional jobs to support the refinery’s operations and employees.

The base term of the operating agreement is for 22 years, but it may be extended for two additional terms of 10 years each if ABR is not in breach of its obligations under the agreement.

The agreement calls for the new owners to obtain financing within 20 months of buying the refinery. Revamping the plant is expected to take another two years and cost more than $1 billion. If the new owners don’t start the refinery, the company will have to dismantle the site and conduct environmental remediation.

Hovensa Refinery
The Hovensa refinery in St. Croix, a joint venture between Hess Corp. and Venezuela’s national oil company, was one of the largest in the U.S. before the companies shut it down.  The refinery processed heavy oil from Venezuela and sold much of the gasoline and diesel it produced in the U.S. But if the plant reopens it probably will process U.S. oil, getting crude that can’t find a home at stateside refineries working at full tilt.

It also would have some cost advantages over U.S. facilities. The so-called Jones Act requires all goods shipped between U.S. ports to move on vessels built in the U.S. and sailed by American crews. That makes the tankers more expensive to rent—and harder to find—than foreign tankers crewed with less-expensive sailors from other countries.But while St. Croix is a U.S. territory, it is exempt from the Jones Act.

The St. Croix refinery has some higher costs than U.S. rivals, such as for power.

Hess built the St. Croix plant in 1966 and by the 1970s had expanded it to become, at one point, the largest in the world, processing up to 650,000 barrels of oil a day.  The company sold a 50% stake to PetrĂ³leos de Venezuela in 1998 and adapted equipment to process the heavier crude that is pumped in Venezuela.
A global economic slowdown in 2008 cut into demand for fuel, and the St. Croix plant could no longer compete with newer, more efficient refineries. Hovensa recorded $1.3 billion in losses in the three years before it closed.  (WSJ, 10/28/2014, St. Croix Source, 10/27/2014)

Tuesday, October 28, 2014

Utilities Oppose Net Metering In Meeting With Congressional Black Caucus

Representatives of an industry group representing electric companies met with staffers for members of the Congressional Black Caucus on Thursday to rally support for efforts to kill solar energy incentives. The meeting included a briefing by David Owens, the executive vice president of business operations and regulatory affairs for the Edison Electric Institute, a utility trade group; Sheri Givens, consultant for Givens Consulting LLC; and Florida state Rep. Joseph Gibbons (D), chair of the National Black Caucus of State Legislators committee on energy, transportation and environment.
The meeting focused on "net metering and communities of color." The session aimed to convince caucus members that solar incentives, including net metering, are bad for black communities. The speakers argued "that communities of color are suffering" from policies that benefit "rich people who could afford rooftop solar. Between 20 and 25 staffers who work for members of the Congressional Black Caucus attended.
Net metering is a policy that allows homes and businesses with solar power systems to sell their excess energy back to the power grid, and has been credited with spurring the growth of solar energy in recent years. Forty-three states as well as the District of Columbia have net metering policies, and solar is beginning to threaten utility earnings in some parts of the country, according to a recent government report.
But electric utilities in many states argue that solar customers are not paying their fair share for use of the grid, and have been pushing efforts to change net metering policies. Utility companies in Arizona last fall failed in their fight to roll back the state's net metering policy, despite Edison spending more than a half-million dollars on ads.
A paper that the National Black Caucus of State Legislators' energy committee released earlier this year expressed concern about "the regressive nature of the cost-shifting that results from the net metering policies." 
The speakers "aggressively attacked federal tax incentives" for renewable energy. Edison Electric Institute's Owens described the meeting as "part of an ongoing educational outreach effort" on issues like the electricity reliability, distributed generation, and the Low Income Home Energy Assistance Program.
The CBC does not have an official position on this issue.  (Huffington Post, 10/24/2014)

Thursday, October 23, 2014

EPA Invites Communities To Apply For Grants

EPA Invites Communities to Apply for Assistance to Resilience, Pursue Revitalization

The U.S. Environmental Protection Agency (EPA) today invited communities to apply for technical assistance to implement smart growth development approaches. EPA is offering this technical assistance through the Building Blocks for Sustainable Communities program to help communities across the country, including underserved communities, coastal communities, small cities and rural areas, adopt sustainable growth strategies.
The program aims to increase resilience to natural disasters and strengthen the economy while protecting human health and the environment. The Building Blocks program provides quick, targeted technical assistance to communities using tools with demonstrated results and widespread application.

Communities may apply for assistance on one or more of the following topics: 
Bikeshare planning
Equitable development
Infill development for distressed cities
Sustainable strategies for small cities and rural areas
Flood resilience for riverine and coastal communities

If selected, a community will work with an EPA-supported team of experts during a one-to-two-day workshop, where participants will learn about relevant strategies, policies, and practices.

EPA will select up to 25 communities through a competitive process. Selections will be made in collaboration with the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Transportation through the Partnership for Sustainable Communities. This interagency collaboration coordinates federal investments in infrastructure, facilities, and services to get better results for communities and use taxpayer money more efficiently.

Applications will be accepted between October 23 and November 20, 2014. EPA will host a webinar to discuss the program and the application process on Thursday, October 30, 2014, from 3 to 4 p.m. EDT.  (EPA)

More information on the Building Blocks for Sustainable Communities program

More information on the webinar
More information on the Partnership for Sustainable Communities

Wednesday, October 22, 2014

St. Croix Electricity, Water and Energy

St. Croix is the largest island in the Virgin Islands and lies about 40 miles south of the three other inhabited islands: St. John, St. Thomas, and Water Island.  The territory has a population of about 106,000. Fewer than 5,000 live on St. John and Water Island; most residents are evenly divided between St. Thomas and St. Croix.

St. Croix imports petroleum products to meet its energy needs, including electricity and desalination for its public water supply.  The economy has typically been about seven times more energy-intensive than the U.S. economy and per capita energy consumption in recent years has run as much as eight times higher than the U.S. average. Energy efficiency is low because of water desalination requirements and the predominance of small simple-cycle generators.

About two-thirds of petroleum products, in the form of No. 6 residual fuel oil and No. 2 diesel fuel, are used for electricity and water production. The remaining one-third is used almost entirely in the transportation sector, as motor gasoline, diesel fuel, and aviation fuel.

The 122-megawatt Richmond plant near Christiansted is the main generating station on St. Croix, which has its own grid. Average loads are less than half of generating capacity.  The plant is aging and needs increasingly costly maintenance and upgrading to maintain reliability.

The Virgin Islands Water and Power Authority (WAPA), a public-power utility, is an autonomous governmental instrumentality of the Government of the Virgin Islands.  WAPA produces and distributes electricity and potable water to approximately 55,000 electrical customers and 13,000 potable water customers. WAPA also installs and maintains street lights in the territory. As a semi-autonomous government agency, WAPA, is considered a not-for profit public corporation that contributes directly to the Virgin Islands Government's budget through an annual payment in lieu of taxes to the Virgin Islands Treasury.

WAPA operates electrical generation and water desalination and reverse osmosis units on St. Croix, St. John and St. Thomas. Rates for electrical, potable water and street light services are regulated and set by the Public Services Commission.  The base electricity rate is reasonable at $0.09 per kilowatt hour (kWh).  But the fuel charge of $0.30/kWh makes for an extremely high electricity bill.

The Hovensa refinery supplied WAPA with No. 2 diesel fuel and No. 6 residual fuel at a small discount until the refinery closed, but, even with that discount, fuel prices rose with world oil prices. As a result, St. Croix residents have paid up to five times the average U.S. price for electricity.

Nearly one-tenth of electricity generated is used for desalination of sea water. Homes not connected to the public water supply are required to have cisterns to catch rainwater; a cistern may represent almost one-sixth of the cost of building a private home.

About one-third of electricity is consumed by the residential sector, and another one-third by large commercial power users like hotels. Nearly one-sixth of electricity goes to large industrial users like distilleries and ports. Average household consumption is about half that of the mainland United States, around 450 kilowatthours monthly. But electricity typically costs Virgin Island residents an average of 9% of their income, compared to 2% for the United States as a whole.

The V.I. Water and Power Authority began leasing ($367,000) a Seven Seas Water-manufactured Winnebago-sized water factory at WAPA's Estate Richmond power plant in 2009.  The unit is being used to assist in reliably providing part of the 1.5-million-gallon per day at the salt-water reverse osmosis plant at St. Croix's Estate Richmond power plant.  One of WAPA's several steam-based desalination plants on St. Croix needed a major overhaul and was gradually becoming less and less productive.  Instead of producing 1.2 million to 1.5 million gallons of potable water a day, it was producing only about 600,000 to 800,000 gallons.  Taking the plant offline for an overhaul would result in water shortages until the work was done. The new unit produces enough so WAPA can take each of its units offline one at a time for overhauling.  (DOE-EIA, Virgin Islands Water and Power Authority-WAPA, WAPA Sample Bill, St. Croix Source, 6/24/2019)

WAPA/EPA Consent Decree on Estate Richmond Generating Facility

Increase in Propane Tank Capacity

Energy Production Action Plan (2012)

Wastewater Treatment Plant

Tuesday, October 21, 2014

Hovensa & Environmental Justice

Hovensa Refinery
The Virgin Islands is 73% African American.  St. Croix is 72% African American.  The Hovensa Refinery is located in St. Croix.  Is there a connection between the minority population on the island and the reluctance of government authorities to seriously pursue clean up of the facility?  This is a classic environmental justice issue.  And the answer to the question is, of course race plays a role in the delayed clean up of this facility.

The U.S. EPA appears to be unwilling to regulate Hovensa under the Superfund Program and instead regulates it under the less aggressive Resource Conservation and Recovery Act (RCRA).  Why?  Is EPA enabling an environmental injustice to be perpetrated upon the minority population on St. Croix?  It appears so.  Unless EPA can explain why they are allowing this site that has been closed (storage facility?) to continue to release uncontrolled hazardous constituents into the local environment, they should openly admit that they are enabling the pollution of this vulnerable community.

There has been litigation of various types and different types of settlements over the past few years.  But these settlements have been woefully ineffective at adequately addressing the clean up of the Hovensa area.  And although EPA should be commended for negotiating the consent decree that placed a $5.3 million fine on Hovensa and required $700 million in air pollution improvement retrofits, it appears the requirements, combined with negative cash flow, also helped push the company right out of business.

The governor, Virgin Islands Senate, Department of Planning and Natural Resources, Attorney General, delegate to the U.S. House of Representatives, U.S. EPA and the U.S. Department of Justice should organize around the Superfund Program to design and implement a program that will clean up the Hovensa site.  Hovensa should not be allowed to delay this clean up forever.  To do so represents an environmental injustice.

Simultaneously with the clean up should be a serious effort to reopen the refinery.  The loss of 2,500 jobs with the closure of the facility adds insult to environmental injury.  Hovensa should sell the facility with all deliberate speed while working with the appropropriate authorites to clean up their pollution legacy liability.  A new owner should also aggressively implement EPA's air pollution retrofit regimen included in the consent decree.  (U.S. Census Bureau-Virgin Islands, U.S. Census Bureau-St. Croix)

Monday, October 20, 2014

Virgin Islands HOVENSA Refinery Should Be In The Superfund Program

HOVENSA Refinery
The U.S. EPA should place the Virgin Islands HOVENSA Refinery in the Superfund Program

AAEA is recommending that if the site is not restarted as a refinery and the EPA consent decree requirement of $700 million in air pollution control equipment is not timely-installed by HOVENSA or a new owner, the site should be placed in the Superfund Program and the Virgin Islands government should require HOVENSA to put up a $20 billion escrow account to assure contamination clean up.

The site is currently regulated under the Resource Conservation and Recovery Act (RCRA) Program.  The RCRA designation is not sufficient to protect the health of people who live in the Virgin Islands.  We also believe that EPA's assessment that the contaminated groundwater does not pose a threat to human health is an inadequate assessment.  We will be encouraging residents [Glenn Webster] and organizations in the Virgin Islands to file Preliminary Assessment Petitions to invite EPA in to conduct a Superfund Program assessment.  AAEA believes the site should be entered into the Comprehensive Environmental Response, Compensation, and Liability Information System (CERCLIS) and targeted for an Emergency Response.

To add insult to the closure of the refinery, which provided 2,500 jobs to the island, authorities, for the most part, are allowing the people, fauna, flora and natural environemnt to be consistently polluted by a clearly uncontrolled hazardous waste site.  Designating the site as a storage facility does nothing to change this reality.  If the site is being leased out to another entity that is not responsible for the site, but could in fact be contributing to the current uncontrolled releases of hazardous oil, then this only serves to establish that this site needs a more aggressive clean up strategy.

The U.S. EPA and the  Virgin Islands Department of Planning and Natural Resources (DPNR) are nibbling around the edges of this issue when they should be insisting on clean up.  At a very minimum the Virgin Islands government should require HOVENSA to establish a Clean Up Escrow Account in the amount of $20 billion to assure that funding is available to bring this area back to its original pristine state.

Just this year the DPNR settled several lawsuits initiated in 2005 against HOVENSA  concerning contamination of the South Coast Industrial Area, where the site is located.  The suits sought damages, the government’s investigation and cleanup costs, the performance of environmental cleanup and restoration work, penalties, litigation costs, and litigation fees.  The lawsuits alleged that the defendants’ operations injured and contaminated the public’s natural resources, including potential drinking water, the marine environment, plant life, and wildlife.  Pursuant to the various settlement agreements regarding the former alumina refinery property and HOVENSA refinery, the settling defendants are required to ultimately make cash payments totaling $67,250,000.00.  This amount is woefully inadequate to conduct an appropriate clean up of the facility.

In 2011, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that HOVENSA LLC, owner of the second largest petroleum refinery in the United States, agreed to pay a civil penalty of $5.375 million and spend more than $700 million in new pollution controls that will help protect public health and resolve Clean Air Act violations at its St. Croix, U.S. Virgin Islands refinery. The settlement requires new and upgraded pollution controls, more stringent emission limits, and aggressive monitoring, leak-detection and repair practices to reduce emissions from refinery equipment and process units.

Although the EPA air pollution control consent decree is adequate, the agency should more aggresssively address the very serious surface and groundwater pollution at the facility.   (Office of U.S. Virgins Governor John P. de Jongh, EPA).

Hovensa (Hess) Oil Refinery In The Virgin Islands

Virgin Islands Oil Refinery Should Be Operating (President's Corner)

Hovensa & Environmental Justice

St. Croix Electricity, Water and Energy

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)

Thursday, October 16, 2014

Equal Access to Justice Act

In 1980, Congress passed the Equal Access to Justice Act (EAJA) to protect the "little man" from government agencies that break their own rules. Under EAJA, if the courts find that the government violated its own policies, the government pays the litigation costs to the winners.
According to some critics, a loophole in the law has enabled "Big Green" environmental groups to broker a self-serving bargain with the government. Wealthy nonprofits receive millions in EAJA reimbursements, no matter how much money those organizations are worth, completely defeating the original intention of the law.
This is ironic since small environmental justice groups do not have the capability to utilize this law.  And you can bet the Big Green groups aren't going to share this cash cow with the smaller EJ groups.  There are many such government subsidies that the large groups get that are not really available to the smaller groups.  EAJA was a good idea when it passed Congress. It remains a good idea today so long as it is operating as Congress intended.
After Congress passed the Sunset Act in 1995, reporting provisions for EAJA payouts disappeared. Currently, EAJA lacks any sort of recordkeeping, which means no government agency knows which organizations are receiving payouts or how much they are receiving. With no records, nonprofit groups are taking advantage of the fact that no one would know how much money the groups are making by suing federal agencies.
The multimillion-dollar Sierra Club Foundation is one of many organizations using the EAJA loophole. In the 55 trials linked between the Sierra Club and the Environmental Protection Agency (EPA), $2.4 million was given to cover lawyer fees and court costs. From 2000 to 2009, the Sierra Club requested fees in 194 cases and was awarded more than $19 million. No one knows the exact amount because in two of the cases, the reimbursement amount remains totally unreported. (The Hill, 10/16/2014)

Wednesday, October 15, 2014

Virgin Islands Oil Refinery Should Be Operating


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 Refinery
HOVENSA is a petroleum refinery located on the island of St. Croix United States Virgin Islands and is a joint venture between USA-based Hess Corporation and Petroleos de Venezuela. 

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.

Although the plant has some serious economic and environmental challenges, I believe this plant can operate profitably and its environmental challenges can be mitigated. This is also a prime opportunity for African American ownership of energy infrastructure and resources.  Currently, Blacks own virtually no energy infrastructure and resources in the United States.

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.

Negotiations between HOVENSA and the Virgin Island's government led to a fourth amendment agreement that had HOVENSA agreeing to a sale process with an experienced investment banking firm (Lazard) and the government agreeing to allow HOVENSA to operate the refinery site as an oil storage terminal while the refinery is up for sale.

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)

Thursday, October 02, 2014

Urban Youth Gather For Wilderness 50 Celebration

On September 3, 1964, Lyndon Johnson strolled out to the Rose Garden, pressed a pen between his fingers and signed into law the highest level of protection ever afforded the American landscape. "If future generations are to remember us with gratitude rather than contempt," President Johnson said later, "we must leave them something more than the miracles of technology. We must leave them a glimpse of the world as it was in the beginning." On that day, America gained a wilderness preservation system. Initially now protecting over 109 million acres of wild lands from Alaska to Southern California.

On September 27, 2014, fifty years later, over 250 Americans gathered for a Wilderness 50 Celebration in the San Gorgonio Wilderness Area on the San Bernardino National Forest to sign a Proclamation to be given to President Obama and US Forest Service Chief Tom Tidwell pledging to support another 50 years of wilderness protection.

Over 250 people pledged to be the next generation of wilderness stewards, especially on the San Bernardino National Forest. “Through our signatures, we want our President and the US Forest Service Chief to know that we are happy that so much land in our Country is still wild”, stated Lorenzo Bettencourt age 16. “ My hope is that if I help keep the wilderness areas clean, 50 years from now I can bring my grandchildren to see wilderness areas just like I did on September 27, 2014 when I was 16” Bettencourt also added.
The signatures were predominately from African American and Latino youth from some of the poorest areas in San Bernardino County. The Proclamation was given to Elwood York, representing the US Forest Service from Washington D.C. to be the holder of the proclamation and the messenger to our Federal Government. (Elwood York)

Among the Wilderness 50 celebration were many key leaders from the U.S. Forest Service including Jodi Noiron, San Bernardino National Forest Supervisor, Gabriel Garcia, Front Country District Ranger, San Bernardino National Forest and Elwood York, US Forest Service Washington D.C. Office, as well as other organizations that help put the Wilderness 50 Celebration together including the San Gorgonio Wilderness Association, San Bernardino County Sheriff Department and the Housing Authority of the County of San Bernardino.

The Wilderness 50 Celebration also included a Wilderness Bus Tour, in which 3 large charter buses carried families and children from San Bernardino Public Housing and members of the Urban Conservation Corps of the Inland Empire, a program of the Southern California Mountains Foundation to participate in a guided bus tour up to the San Gorgonio Wilderness Areas. The bus tour guides were volunteers from the San Gorgonio Wilderness Association.

Unquestionably, the Wilderness 50 Celebration on the San Bernardino National Forest was the largest Wilderness 50th Celebration throughout the Country and indeed was the largest celebration of urban children, youth and their families (many first time visitors). This historic event truly was a celebration of the power of conservation!