Major economic disaster in the USVI

[Exit Zero]

This was posted on the STX board but will have a major effect on all the USVI -- Hovensa is our largest private employer, taxpayer and the supplier of our fuel - WAPA also gets its fuel from them - I believe the number of jobs lost is projected at over 1500 people - in the plant alone - but the ancillary effects on everything else in the economy will be devastating across the board.



Wed Jan 18, 2012 9:32 am Post subject: Hovensa to close its refinery Reply with quote
http://www.marketwatch.com/story/hess-s ... 2012-01-18

[GraysonDave]

I work with a guy who used to be a manager there. He was just describing to me the extent of the devastation that the closing will cause. The economic impact will be severe, and the social impact could be just horrible. It's very sad for all residents and will impact all the islands, not just St. Croix.

[Exit Zero]

This is the statement released locally by Hovensa:


This morning, we announced that the HOVENSA refinery will commence shutdown of operations and become an oil storage terminal.

Losses at the refinery have totaled $1.3 billion in the past three years alone and were projected to continue. These losses have been caused primarily by weakness in demand for refined petroleum products due to the global economic slowdown and the addition of new refining capacity in emerging markets. In the past three years, these factors have caused the closure of approximately 18 refineries in the United States and Europe with capacity totaling more than 2 million barrels of oil per day. In addition, the low price of natural gas in the United States has put our oil-fueled refinery at a competitive disadvantage.

We deeply regret the closure of the refinery and the impact on each of our people. We explored all available options to avoid this outcome, but severe financial losses left us with no other choice. We will work closely with the government of the U.S. Virgin Islands to ease the transition for our employees and the rest of the community.

After formal shutdown of the refinery, which will occur by the middle of February, most people will continue working through a transition period over a number of months. Thereafter, approximately 100 people will remain to work at the oil storage terminal.

We are committed to providing as much information as we possibly can for each employee. Senior managers will hold meetings by shift and be available throughout the coming days to answer your questions, and information has been mailed to homes. We will also update the [Intranet] with information as it becomes available.

We are extremely sad to share this news. We thank each of our employees for their dedication to HOVENSA, and we are committed to doing everything in our power to ease the transition for all concerned.

Sincerely,
Brian Lever

[PA Girl]

This is dire news. I have a West Indian friend (born and raised on St. Croix) that moved to PA and from what I gathered, things were tough on St. Croix for a long time. How sad that it will get worse.

I assume this plant also supplies fuel for most (if not all) island gas stations?

[susan & herb]

How many people does the plant employ? It says they will keep 100 people but it doesn't how many they are letting go.

[Exit Zero]

On the Hovensa website they state they employ over 2500 people - most on ST Croix.

[Teresa_Rae]

Wow, that is just terrible.

[lprof]

What the governor is saying...

<iframe width="420" height="315" src="http://www.youtube.com/embed/2jh2IyPuTKI" frameborder="0"></iframe>

[SCMako17]

And there's a great example that "drill baby drill" doesn't necessarily hold up at the end of the day.

I would imagine that someone will purchase the refinery at a deep discount, possibly hold it for a bit, and then begin to refine again once the global economy heats up to a point that demand begins to align with profitable supply.

I hope that the folks on STX can hold on until then.

[Agent99]

Does the decision to shut down have anything to do with this EPA /Justice Departmant penalty against Hovensa last January? I'm not implying anything- just asking.

Hovensa LLC Clean Air Act Settlement The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced today that HOVENSA LLC, owner of the second largest petroleum refinery in the United States, has 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. Consent Decree 1/26/2011

[chicagoans]

I really feel for the folks who are affected by this, and it sounds like there will be many (not just those laid off and their families, but the businesses who relied on their patronage, too.)

It's a reminder that living in a beautiful place many consider a paradise still has the realities we face everywhere else.