U.S. Virgin Islands governor proposes to restart refinery in St. Croix

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[Many thanks to Michael Connors for bringing this item to our attention.] This article from DaMajority focuses on the creation of hundreds of jobs in the territory and the millions of dollars that may be used to fund a new hotel development in St. Thomas and to improve infrastructure; there is no mention of the destruction of the environment and health risks to the population.

I chose the photo above, which shows the remains of the now-defunct Commonwealth Oil Refining Company (CORCO) in Guayanilla and Peñuelas, Puerto Rico, just to remind our readers of what a refinery looks like. The image does not accurately convey the eerie ugliness of the obsolete, crumbling apparatus left behind (for over four decades) or the destruction to the natural habitat. I still remember the chemical stench of the refinery that spread far across the island, and year after year, I gaze at the strange, apocalyptic structures—the antithesis of a Caribbean paradise—and wonder, “Would you want this foul-smelling monstrosity in your backyard?” Here are excerpts from “U.S. Virgin Islands Governor announces $1.4 billion landmark deal to restart refinery in St. Croix.” [Photo below shows the refinery in St. Croix.]

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U.S. Virgin Islands Governor Kenneth E. Mapp announced today an agreement which [sic] would reopen one of the world’s largest refineries, create hundreds of jobs in the Territory and shore up the solvency of the Government Employees Retirement System (GERS).

Governor Mapp said the $1.4 billion agreement was between the Government of the Virgin Islands and ArcLight Capital Partners, LLC, the owners of what had been one of the largest oil refineries in the world, when it was shutdown in 2012. The massive deal includes reopening the refinery portion of the operation, which when restarted, will inject hundreds of millions of dollars into the local economy, generating new tax revenues.

Under the agreement with ArcLight Capital, the owners of what is now called Limetree Bay Terminals, the company will invest approximately $1.4 billion to refurbish the existing refinery located in St. Croix. Over the next 18 months, this will create more than 1,200 local construction jobs. Once refinery operations commence at the end of 2019, as many as 700 permanent jobs will be created. The new jobs will be in addition to the more than 750 jobs now at the terminal storage facility. The initial refining operations provide for the processing of approximately 200,000 barrels of crude oil feedstock per day. “This agreement is great news for the people of the Virgin Islands as we continue to grow and expand our economy,” said Governor Mapp, who noted it is tremendous news for the ‘big island,’ which felt the full brunt of the shutdown of refining operations in 2012.

He added that the capital investment will not only benefit St. Croix since the revenues from the agreement will shore up the solvency of GERS, but it will also help fund a new 110-room, “upscale lifestyle” hotel, flagged by a major four-star brand on St. Thomas. Governor Mapp has called the Virgin Islands Legislature into special session on Wednesday, July 25, 2018 to consider and ratify the agreement. “This landmark deal to jumpstart our recovery and to pave the road to better times … requires us to move expeditiously if the refinery is to restart on schedule,” said Governor Mapp. “I look forward to working with members of the Legislature and our partners at Limetree Bay to realize its potential for the benefit of all of our people.”

[. . .] Once refinery operations commence and after crediting the $40 million of prepaid taxes, Limetree will make annual payments to the government in lieu of taxes at a base rate of $22.5 million a year. With market adjustments based on the refinery’s performance, this could increase to as much as $70 million per year, but will not fall below $14 million a year.

According to industry experts and consultants Gaffney, Cline & Associates, the government expects to receive more than $600 million over the first 10 years of the restart of the refining operations. This income is in addition to the $11.5 million currently flowing to the government from the oil storage terminal each year. [. . .]

Read Governor Mapp’s letter calling Legislature into special session here.

[Photos: Top: CORCO, Puerto Rico, from http://www.miprv.com/listas-las-estrategias-para-la-evaluacion-y-limpieza-de-las-11-petroquimicas-abandonadas-en-el-sur/; Bottom: St. Croix refinery, from https://www.wsj.com/articles/u-s-virgin-islands-refinery-files-for-bankruptcy-protection-1442346699 ]

For full article, see https://www.damajority.com/u-s-virgin-islands-governor-announces-1-4-billion-landmark-deal-to-restart-refinery-in-st-croix/

One thought on “U.S. Virgin Islands governor proposes to restart refinery in St. Croix

  1. For a 110 room hotel on St. Thomas. Why? How about a commitment for safe, paved roads throughout the territory?

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