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Charlotte Amalie
Thursday, June 30, 2022
HomeNewsLocal newsEPA, Justice Department Lay Out Terms for STX Refinery's Restart

EPA, Justice Department Lay Out Terms for STX Refinery’s Restart

New documents released by the Environmental Protection Agency and U.S. Justice Department shed light on West Indies Petroleum’s questions concerning the restart of the former Limetree Bay Refinery on St. Croix that it purchased at a bankruptcy auction in December.

The twin towers of Limetree Bay refinery's coker rise in the distance on Tuesday, May 25, on the south shore of St. Croix, USVI. A coker malfunction contributed to the refinery's shutdown and bankruptcy. (Source photo by Patricia Borns)
The Limetree Bay Refinery on St. Croix. (Source Photo by Patricia Borns)

Key among them is whether the new owner and its partner in the $62 million purchase, Port Hamilton Refining and Transportation, will be able to operate under the same regulatory permits that were transferred to Limetree in November 2018 after it acquired the 1960s-era plant from original owner Hovensa in 2016.

The issuance of the Clean Air Act Prevention of Significant Deterioration, or PSD, permits to Limetree under the administration of former President Donald Trump was a source of contention among environmental groups and St. Croix residents affected by pollution from the refinery.

However, WIPL attorneys Tom Eagan and Julie Domike have asked whether the company can use those permits, according to a Justice Department letter dated March 2.

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“Can West Indies Petroleum use Limetree’s existing permits to restart the refinery? If not, what does West Indies Petroleum need to do in order to restart the refinery?” Eagan and Domike asked. The Justice Department referred them to the EPA’s letter, also dated March 2.

“EPA expects to send you a separate letter shortly regarding additional PSD permitting issues,” the agency stated in its response. “It is very important to avoid any repeat of the incidents that occurred at the Refinery in the first half of 2021, involving emissions of hydrogen sulfide (H2S), sulfur dioxide (SO2), uncombusted hydrocarbons, and/or flare rainout from the Refinery.”

Those toxic flares rained pollution over thousands of St. Croix homes within weeks of Limetree restarting the long-shuttered refinery in January 2021, and the March 2 correspondence reveals the new owners will need to undertake multiple corrective actions before they can reopen.

The incidents led the EPA to order Limetree shut down in May and the Justice Department to file a complaint in federal court in July alleging that the refinery presented “an imminent and substantial danger to public health and the environment.” Limetree filed for Chapter 11 bankruptcy the same day.

Now, WIPL and PHRT, together with Limetree Bay Terminals and Limetree Bay Refining, will need to reach an agreement with the United States on a new consent decree to resolve the issues that led the EPA to shut down the plant, according to the Justice Department’s letter to Eagan and Domike.

Additionally, they will need to apply to the V.I. Department of Planning and Natural Resources for a new Territorial Pollutant Discharge Elimination System permit under the Clean Water Act as the current one, issued to Hovensa in 2008 and subsequently transferred to Limetree Bay Terminals in 2016, may not be transferred to WIPL/PHRT, the EPA stated.

Before WIPL/PHRT can entertain a restart, the refinery also must comply with the Code of Federal Regulations concerning hydrogen sulfide gas concentration limits and sulfur dioxide emissions from Flare #8, which was the source of the pollution sprays over St. Croix homes, according to the EPA. Additionally, the pilot light at the flare must meet combustion standards, and a continuous emission monitoring system must be operating, it said.

The new owners also will be required to install a flare gas recovery system on Flare #8, the Justice Department said. “The absence of an FGRS at the Refinery was one of the causes for the excess emissions of H2S and SO2 from the Refinery during the first half of 2021,” it stated.

According to a February progress report by PHRT, the company has engaged Becht Engineering to design such a recovery system, but “the United States requests that before the process design specifications are developed, PHRT and WIPL engage with DOJ and EPA on how the companies and Becht Engineering will determine an appropriate size for the FGRS and discuss their conclusions as to the size,” the Justice Department stated in its letter.

Fenceline monitoring of benzene levels at nine stations around the perimeter of the plant also will be required, and when they exceed acceptable standards, a root cause analysis will be mandated to determine the causes and corrective actions, the EPA said. The new owners also must construct a meteorological tower, according to the correspondence.

According to an email from the EPA to Limetree engineer Catherine Elizee and general manager Neil Morgan in January, the agency was unconvinced by the findings from just such an analysis the refinery presented in December.

“EPA has reviewed this submittal and is concerned that the root cause analysis is poorly reasoned and thus unlikely to have identified all of the actual root causes of the exceedances or all of the appropriate corrective actions,” the email stated. “If Limetree or a new owner were to restart the refinery, further analysis would be needed to identify the root causes contributing to exceedances,” and corrective actions implemented, it said.

While Limetree asserted that the excessive benzene levels were due to its shutdown actions, “the most severe impacts occurred while the refinery was operating; the root cause analysis did not focus on the time periods with the highest and/or most extended exceedances of the action level, and hence the corrective actions – as noncommittal as they are – miss the mark as well,” EPA said in the email.

“EPA expects that Limetree or a new owner will resubmit a proper root cause analysis to identify appropriate corrective actions; EPA strongly encourages that the corrective actions be identified and implemented before any refinery restart,” the email concludes.

The Justice Department noted in its letter to the WIP attorneys that its answers “are not intended to be nor should be read as an exhaustive list of the environmental obligations that WIPL and PHRT will need to meet as an owner and operator of the Refinery. As additional information is received from WIPL and PHRT, the United States may conclude that other actions … are necessary. In the meantime, WIPL and PHRT should continue to consult with their legal and technical experts in environmental regulations and permitting.”

The EPA issued a similar disclaimer.

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New documents released by the Environmental Protection Agency and U.S. Justice Department shed light on West Indies Petroleum's questions concerning the restart of the former Limetree Bay Refinery on St. Croix that it purchased at a bankruptcy auction in December.
The twin towers of Limetree Bay refinery's coker rise in the distance on Tuesday, May 25, on the south shore of St. Croix, USVI. A coker malfunction contributed to the refinery's shutdown and bankruptcy. (Source photo by Patricia Borns)
The Limetree Bay Refinery on St. Croix. (Source Photo by Patricia Borns)
Key among them is whether the new owner and its partner in the $62 million purchase, Port Hamilton Refining and Transportation, will be able to operate under the same regulatory permits that were transferred to Limetree in November 2018 after it acquired the 1960s-era plant from original owner Hovensa in 2016. The issuance of the Clean Air Act Prevention of Significant Deterioration, or PSD, permits to Limetree under the administration of former President Donald Trump was a source of contention among environmental groups and St. Croix residents affected by pollution from the refinery. However, WIPL attorneys Tom Eagan and Julie Domike have asked whether the company can use those permits, according to a Justice Department letter dated March 2. "Can West Indies Petroleum use Limetree's existing permits to restart the refinery? If not, what does West Indies Petroleum need to do in order to restart the refinery?" Eagan and Domike asked. The Justice Department referred them to the EPA's letter, also dated March 2. "EPA expects to send you a separate letter shortly regarding additional PSD permitting issues," the agency stated in its response. "It is very important to avoid any repeat of the incidents that occurred at the Refinery in the first half of 2021, involving emissions of hydrogen sulfide (H2S), sulfur dioxide (SO2), uncombusted hydrocarbons, and/or flare rainout from the Refinery." Those toxic flares rained pollution over thousands of St. Croix homes within weeks of Limetree restarting the long-shuttered refinery in January 2021, and the March 2 correspondence reveals the new owners will need to undertake multiple corrective actions before they can reopen. The incidents led the EPA to order Limetree shut down in May and the Justice Department to file a complaint in federal court in July alleging that the refinery presented "an imminent and substantial danger to public health and the environment." Limetree filed for Chapter 11 bankruptcy the same day. Now, WIPL and PHRT, together with Limetree Bay Terminals and Limetree Bay Refining, will need to reach an agreement with the United States on a new consent decree to resolve the issues that led the EPA to shut down the plant, according to the Justice Department's letter to Eagan and Domike. Additionally, they will need to apply to the V.I. Department of Planning and Natural Resources for a new Territorial Pollutant Discharge Elimination System permit under the Clean Water Act as the current one, issued to Hovensa in 2008 and subsequently transferred to Limetree Bay Terminals in 2016, may not be transferred to WIPL/PHRT, the EPA stated. Before WIPL/PHRT can entertain a restart, the refinery also must comply with the Code of Federal Regulations concerning hydrogen sulfide gas concentration limits and sulfur dioxide emissions from Flare #8, which was the source of the pollution sprays over St. Croix homes, according to the EPA. Additionally, the pilot light at the flare must meet combustion standards, and a continuous emission monitoring system must be operating, it said. The new owners also will be required to install a flare gas recovery system on Flare #8, the Justice Department said. "The absence of an FGRS at the Refinery was one of the causes for the excess emissions of H2S and SO2 from the Refinery during the first half of 2021," it stated. According to a February progress report by PHRT, the company has engaged Becht Engineering to design such a recovery system, but "the United States requests that before the process design specifications are developed, PHRT and WIPL engage with DOJ and EPA on how the companies and Becht Engineering will determine an appropriate size for the FGRS and discuss their conclusions as to the size," the Justice Department stated in its letter. Fenceline monitoring of benzene levels at nine stations around the perimeter of the plant also will be required, and when they exceed acceptable standards, a root cause analysis will be mandated to determine the causes and corrective actions, the EPA said. The new owners also must construct a meteorological tower, according to the correspondence. According to an email from the EPA to Limetree engineer Catherine Elizee and general manager Neil Morgan in January, the agency was unconvinced by the findings from just such an analysis the refinery presented in December. "EPA has reviewed this submittal and is concerned that the root cause analysis is poorly reasoned and thus unlikely to have identified all of the actual root causes of the exceedances or all of the appropriate corrective actions," the email stated. "If Limetree or a new owner were to restart the refinery, further analysis would be needed to identify the root causes contributing to exceedances," and corrective actions implemented, it said. While Limetree asserted that the excessive benzene levels were due to its shutdown actions, "the most severe impacts occurred while the refinery was operating; the root cause analysis did not focus on the time periods with the highest and/or most extended exceedances of the action level, and hence the corrective actions – as noncommittal as they are – miss the mark as well," EPA said in the email. "EPA expects that Limetree or a new owner will resubmit a proper root cause analysis to identify appropriate corrective actions; EPA strongly encourages that the corrective actions be identified and implemented before any refinery restart," the email concludes. The Justice Department noted in its letter to the WIP attorneys that its answers "are not intended to be nor should be read as an exhaustive list of the environmental obligations that WIPL and PHRT will need to meet as an owner and operator of the Refinery. As additional information is received from WIPL and PHRT, the United States may conclude that other actions … are necessary. In the meantime, WIPL and PHRT should continue to consult with their legal and technical experts in environmental regulations and permitting." The EPA issued a similar disclaimer.