The Biden EPA Withdraws a Key Permit for an Oil Refinery on St. Croix, Citing ‘Environmental Justice’ Concerns

The Biden administration handed environmental justice advocates a major victory on Thursday when it announced it was withdrawing a key pollution permit for an oil refinery in the U.S. Virgin Islands that locals say has long fouled their air and water and endangered their health.

Citing “environmental justice concerns” and the new administration’s priority to consider “the needs of overburdened communities,” the Environmental Protection Agency announced in a press release that it was withdrawing the federal air pollution permit for the Limetree Bay oil refinery, located on the territory’s southern island of St. Croix. The move, however, won’t require Limetree to cease refining operations.

The company had operated the refinery as an oil storage facility for years, but last month reopened the refining portion utilizing that permit, which was issued by the Trump EPA in December 2020. 

“Withdrawing this permit will allow EPA to reassess what measures are required at the Limetree facility to safeguard the health of local communities in the Virgin Islands, while providing regulatory certainty to the company,” Walter Mugdan, EPA’s acting regional administrator, said in the release.

The decision could lead to stricter pollution controls at the facility and marks the Biden administration’s most significant step so far to follow through on its pledges to elevate environmental justice to the top of its regulatory agenda.

Nearly 75 percent of the people living in the communities just north of the refinery are Black, about a third identify as Hispanic or Latino and over a quarter fall below the national poverty line, according to a recent EPA analysis.

“We are grateful to the Biden/Harris administration and the EPA for this significant first step in commitments to environmental justice and meaningful action on climate change,” Jennifer Valiulis, executive director of the St. Croix Environmental Association, said in a statement Thursday afternoon. “Our island community and environment have suffered for decades due to lax monitoring of emissions, poor enforcement, and inadequate protections.”

In February, the St. Croix Environmental Association, along with other environmental groups, filed an appeal of Limetree’s air pollution permit with the EPA’s Environmental Appeals Board, arguing that it allowed excessively high emissions that would disproportionately harm the nearby communities.

The permit withdrawal comes just days after Inside Climate News reported that the St. Croix refinery had been the site of one of the largest oil spills in American history and that its previous owners had dodged a multi-million dollar settlement for violating the Clean Air Act.

The article showed how the refinery’s new owners had received special help in reopening the refinery from the Trump administration, which ignored decades of EPA precedence to rush the plant through the federal permitting process and ensure its financial viability.

After shutting down for nearly a decade, the refinery restarted operations last month under the new ownership of Limetree Bay Ventures, a company backed by the private equity firms EIG and ArcLight Capital. Local officials, and many in the community, touted the restart as a critical lifeline for the territory’s struggling economy.

But residents living closest to the plant have long complained that it has fouled their air, poisoned their drinking water and resulted in increased cases of cancer, asthma and a host of other ailments commonly associated with higher exposure to air pollution.

In 2016, St. Croix had the highest number of reported cancer cases among the three islands, according to the territory’s cancer registry, though that data is limited and does not establish a causal link between those cases and any pollution source on the island. The EPA said in its release that Limetree will also be subject to a multi-million-dollar consent decree the agency had negotiated with the refinery’s previous owner, Hovensa. The company walked away from the decree when it shut down the plant’s operations in 2012 and declared bankruptcy a few years later. 

On Hovensa’s watch, the refinery leaked more than 43 million gallons of oil into St. Croix’s sole aquifer between 1982 and 2011. The EPA also found the refinery in serious violation of the Clean Air Act in 2011, ordering Hovensa in the consent decree to spend $700 million on new pollution control equipment to reduce the plant’s emissions, and to fund nearly $5 million in projects that would improve the environment of St. Croix.

Between 2017 and 2019, the Trump administration implemented several changes to how it interpreted Clean Air Act rules that ultimately allowed Limetree to get a far more lenient air pollution permit than it normally would have been granted. Many of those changes will result in higher pollution in environmental justice communities like St. Croix, said John Walke, an environmental attorney and director of the Natural Resources Defense Council’s clean air, climate and clean energy program.

“This is an important first step to addressing several regulatory abuses by the Trump EPA,” Walke said of today’s announcement. “It’s not the end at all, and there’s much more work that truly needs to be done to protect St. Croix residents.”