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EPA Signals it Will Petition Appeals Court for Rehearing on STX Refinery Permit

The St. Croix refinery, as seen from a residential community. (Source photo by Linda Morland)

The Environmental Protection Agency intends to petition the Third Circuit Court of Appeals for a rehearing of its ruling that the St. Croix refinery does not require a new permit to reopen, but needs more time to do so, according to a motion filed Thursday.

A three-judge panel of the court ruled on July 25 that the EPA “exceeded its authority” under the Clean Air Act when it determined that Port Hamilton Refining and Transportation required a Prevention of Significant Deterioration Permit to restart — a process Port Hamilton contended would take three years and “threaten” the refinery’s “very existence.”

On Thursday, the EPA filed a motion seeking an extension of time to petition for a rehearing, saying that consultation with its staff and the Justice Department is taking longer than expected, and its counsel is also currently tied up with unrelated cases in the District of Columbia and the New Mexico Court of Appeals.

The deadline to petition is Sept. 8, and the EPA is seeking a 21-day extension to Sept. 29.

“To date, EPA and its counsel at the U.S. Department of Justice have worked diligently to examine the decision and identify only those issues that merit a proposed petition for panel rehearing, including ongoing consultation with senior management and officials in both agencies,” according to the motion. “The necessary consultation process is taking significantly longer than originally anticipated, however,” it said.

The EPA consulted with Port Hamilton officials on the request for an extension of time, and they are not opposed, according to the motion.

The EPA’s decision that Port Hamilton needs a PSD permit came after the refinery was shut down for 60 days in May 2021 following a flare that sprayed oil over some 137 homes, and a subsequent inspection in the summer of 2022, during which federal regulators reported multiple serious safety issues.

“Based on EPA’s analysis … we conclude that the Refinery was permanently shut down in 2012 and that restarting the Refinery qualifies as construction of a new major stationary source under the federal PSD permitting regulations applicable in the U.S. Virgin Islands,” according to EPA’s letter to Port Hamilton.

Still, Port Hamilton purchased the refinery for $62 million at a bankruptcy auction in December 2021 believing it could operate under the permits of its predecessor, Limetree Bay Refining, according to a brief it filed in April appealing the EPA’s decision. Those permits were issued under the administration of former President Donald Trump, which considered the refinery’s restart the reactivation of an idled facility — the plant had been shuttered by previous owner Hovensa since 2012 — rather than a new source.

Port Hamilton has argued that the PSD requirement is onerous and will put it out of business.

“To comply with EPA’s PSD regulations, Port Hamilton must … delay the resumption of refinery operations for two to three years, model its potential future emissions, assess the ‘Best Available Control Technology’ for each of the units to return to operating status, and install such controls prior to resumption of operations,” according to its brief.

“If operation of the refinery is delayed for a period of years, Port Hamilton may have to abandon its plans and instead shut down and dismantle the refinery, with devastating consequences for the local economy, including the elimination of jobs and tax revenue that otherwise would be generated by a resumption of operations,” the brief stated.

Port Hamilton and Gov. Albert Bryan Jr., long a proponent of the refinery reopening, lauded last month’s Third Circuit ruling, with the governor calling it “a significant milestone in the refinery restart and for the St. Croix manufacturing economy. It affirms my longstanding position that the Environmental Protection Agency was less than judicious in requiring this permit,” he said.

Groups that filed amicus briefs in support of the EPA include the Sierra Club, the St. Croix Environmental Association, and the Center for Biological Diversity.

EPA said after last month’s ruling that it “remains committed to ensuring that the refinery complies with environmental laws that protect public health. EPA will continue its efforts to prevent environmental harms in this community and disproportionate burdens to its residents.”

The EPA continues to hold virtual community meetings to update the public about its oversight of the refinery and the ongoing removal of dangerous chemicals from the site, with the next one scheduled for Wednesday at 5 p.m. People may access the meeting, being held via Zoom, at https://usepa.zoomgov.com/j/1607391633. The access code 160 739 1633.

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