A notoriously dirty oil refinery in the U.S. Virgin Islands is shutting down after “escalating environmental scrutiny made it impossible for backers to obtain desperately needed financing,” Bloomberg News reports.
The 200,000-barrel-per-day Limetree Bay facility is a “key refinery for U.S. East Coast consumers,” Bloomberg writes. And its closure “is the most dramatic fallout from the Biden administration’s plan to wean the world’s biggest economy off fossil fuels since the January cancellation of the Keystone XL pipeline project. It’s also emblematic of the challenges facing an industry struggling with shrinking profitability, excess production capacity, and rising competition from mega-refineries in Asia.”
But Limetree Bay, which was previously shut down in 2012, had also been quick to establish itself as an environmental justice flashpoint since new owners began working to reopen it last September. The closure decision followed “a number of catastrophic errors that rained oil droplets on St. Croix, sent residents to emergency rooms after noxious gas releases, and raised fears among homeowners that their drinking water was laced with toxic chemicals,” the Washington Post says.
“The plant, which had closed a decade ago under a previous owner after toxic spills helped push it into bankruptcy, was plagued with problems from the start after the Trump administration granted it permission to reopen in February,” the Post recounts. “The refinery’s pollution impacts on Black and Brown people in communities that surround it quickly emerged as a priority under President Biden, who made environmental justice a major focus of his climate agenda.”
That shift may have helped motivate investors to abandon Limetree’s owners, the Bloomberg coverage suggests.
“Limetree had a very high rate of environmental violations over a very short period of time,” said Judith Enck, an Obama-era Environmental Protection Agency (EPA) staffer who was once responsible for monitoring the refinery. “It was an environmental catastrophe unfolding in real time.”
That made St. Croix Island “a critical test for the president, who has promised to devote 40% of federal spending on the environment to disadvantaged communities,” the Post says. “Even as many residents welcomed the plant’s closure Monday, they questioned how the territory would recover from the harm it has already caused.” Particularly because “the refinery, which now owes tens of millions of dollars to contractors and faces multiple class-action lawsuits from residents, might never restart.”
Limetree Bay CEO Jeff Rinker said the closure was an “extremely difficult decision for us,” but “our only option, given the extreme financial constraints facing the company.” But Enck said the Trump administration should never have allowed the new owners to reopen the plant.
“They were very inexperienced. They didn’t know what they were doing, and within days of restarting experienced significant environmental problems,” she told the Post. “I was extremely concerned when I learned that an [limited liability corporation] with no experience was attempting to restart a major facility like this.”
Inside Climate News has carried extensive coverage of the refinery reopening, including residents’ demands for answers after a series of accidents and the EPA’s order shutting the plant down as an “imminent” health threat.