HOVENSA ENVIRONMENTAL RESPONSE TRUST (ERT) HIGHLIGHTS & ACCOMPLISHMENTS
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Closure of Hazardous Waste Land Treatment Units
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Seven Full Time On-Site Employees (Dollars reinvested in the local economy by utilizing local labor)
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More than $660,000 in revenue generated through asset sales and services provided to other entities
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Lost Time Incident Rate (Primary Contractors) = 0.0
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Total Recordable Incident Rate (TRIR) (Primary Contractors) = 0.0
Trust Overview
The HOVENSA refinery was once the largest petroleum refinery in the world. The site presents unique challenges due to its location on an island in the Caribbean Ocean, the number of real property owners at the site, continuation of industrial activity at the site and a direct hit from Category 5 Hurricane Maria in 2017.
In 2016, the HOVENSA Environmental Response Trust (ERT) was established as part of HOVENSA, L.L.C.’s (HOVENSA’s) bankruptcy settlement. The ERT was created to wind-down certain of HOVENSA’s affairs, including remedial activities required by the EPA-issued RCRA Permit, closure and post-closure of RCRA-Permitted hazardous waste land treatment units (landfarms), closing the solid waste recycling yard (scrap metal and universal waste), closing and maintaining the Asbestos NESHAP landfill and administering funds for Supplemental Environmental Projects (SEPs) required by a Consent Decree issued to the former owner. Clean-up performed by the ERT is limited to known and unknown pre-existing conditions (i.e., conditions at the Site prior to January 4, 2016).
A wind-down budget of $66 million was approved by the Court for use by the ERT to complete the work required to wind-down HOVENSA’s remaining affairs. The budget is funded by $36 million provided by HOVENSA which is held in a financial assurance trust controlled by EPA and up to $30 million available from the entity that purchased HOVENSA’s assets and operates the storage terminal at the Site (Limetree Bay Terminals, LLC which operates as Ocean Point Terminals).
The Site consists of approximately 1,790 acres located in the United States Virgin Islands (USVI) on the southern shore of the island of St. Croix.
Roberto Puga, of PathForward Consulting, was named the Custodial Trustee. PathForward Consulting manages all aspects of the RCRA Permit and the wind down of HOVENSA’s affairs with the oversight of the Virgin Islands Department of Planning and Natural Resources (VIDPNR), the United States Environmental Protection Agency (EPA), the Virgin Islands Attorney General, and the United States Department of Justice (USDOJ)
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Technical Milestones
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Closure of Hazardous Waste Land Treatment Units (Landfarms) 2 and 3: Landfarms 2 and 3 were certified closed by the ERT on May 3, 2019. Landfarms 2 and 3 total more than 14.5 acres in size. The process to close the landfarms began in 2016. The ERT modified the closure plans, and the modified closure plans underwent public review prior to being approved by the EPA and incorporated into the RCRA Permit for the Site. After installation of the final vegetative cover, Landfarms 2 and 3 were certified closed and entered the post-closure care period which is scheduled to continue until 2049. The ERT administers the post-closure care at Landfarms 2 and 3 which includes maintenance of the vegetative cover and monitoring of soil and groundwater beneath the landfarms.
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Completion of Post-Closure Care at Hazardous Waste Landfarm 1: The ERT completed remaining requirements of post-closure care at Landfarm 1 and certified the completion of care on November 16, 2022. The ERT administers on-going controls at Landfarm 1 which include access control and maintenance of the final cover.
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Corrective Action Remedy: The RCRA Permit identifies 31 Corrective Action Units at the Site (29 Solid Waste Management Units and 3 Areas of Concern). Since 2016, the ERT has worked with EPA to review the status of the Corrective Action Units, review final remedies proposed by HOVENSA, and update workplans originally generated by HOVENSA. The ERT anticipates a renewed RCRA Permit issued by EPA which will provide final remedies and workplans for the Site.
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Asset Recovery & Provided Services: The ERT identified and sold $96,300 in assets and generated an additional $568,668 in revenue through services provided to other entities operating at the Site. This revenue has been added to the ERT accounts for use in completing the ERT’s objectives in winding-down HOVENSA’s affairs.
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Trust Overview
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The Virgin Islands Department of Planning and Natural Resources (VIDPNR) and Region 2 of the United States Environmental Protection Agency (EPA) are the beneficiaries of the ERT.
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VIDPNR, EPA Region 2, the United States Department of Justice (USDOJ) and the Virgin Islands Attorney General approved the annual expenditure budget for the ERT.
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Project News
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February 2016, Federal Register Notice of Filing of Environmental Response Trust Under the Resource Conservation and Recovery Act
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Site History
The Site consists of approximately 1,790 acres located in the United States Virgin Islands (USVI) on the southern shore of the island of St. Croix. Construction of the Site began in the mid-1960s under Hess Oil Virgin Islands Corporation (HOVIC) which operated the Site as a petroleum refinery and storage terminal until 1998. In October 1973, approximately 21 acres of the HOVIC property were leased to St. Croix Petrochemical Corporation (SCPC) for use as a paraxylene plant. SCPC was formed in 1972 as a joint venture between HOVIC and Hercules Island Corporation. This area was in operation until December 1992, and dismantling of the process plant was completed in March 1994. Storage tanks from the SCPC operation were emptied and remain on the premises. HOVENSA L.L.C. (HOVENSA), a joint venture between HOVIC and Petróleos de Venezuela Virgin Islands, Inc. (PDVSA V.I.), was formed in 1998 and continued operation of the petroleum refinery and storage terminal until 2012 when petroleum refining operations were idled. Storage terminal operations were continued by HOVENSA until March 2015. In September 2015, HOVENSA, L.L.C. filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the District Court of the Virgin Islands, Bankruptcy Division [Case No. 15-10003]. As part of the Chapter 11 Section 363 process, a court-supervised auction of HOVENSA’s assets resulted in a sale of all terminal and refinery assets located at the Site. The Asset Purchase Agreement (APA) was executed in January 2016, and, as party to the APA, Limetree Bay Terminals, LLC became the owner and operator of all terminal and refinery assets as defined in the APA. Limetree Bay Terminals, LLC began its operations at the Site immediately upon acquiring the assets in January 2016 and continues to operate the terminal. Effective August 2022, Limetree Bay Terminals, LLC does business as Ocean Point Terminals. HOVENSA, L.L.C.’s Chapter 11 Liquidation Plan, confirmed by the Court in January 2016, provided for the creation of the HOVENSA Environmental Response Trust (ERT). Under the Environmental Response Trust Agreement, filed with the Court and effective February 2016, the ERT has assumed responsibility for certain environmental requirements, including certain activities required by the RCRA Permit. As part of the HOVENSA bankruptcy and sale transaction, select parcels of the site were deeded to the United States Virgin Islands (USVI). Subsequent to the January 2016, transaction, Limetree Bay Refining, LLC was formed in 2018. In November 2018, refinery assets were transferred from Limetree Bay Terminals, LLC to Limetree Bay Refining, LLC. In July 2021, according to documents filed in the Court, after years of planning and preparation, Limetree Bay Refining, LLC restarted refinery operations in February 2021, following a preliminary restart in December 2020. In response to an incident that occurred in May 2021, Limetree Bay Refining, LLC voluntarily ceased refining operations in May 2021, and received an order from EPA directing it to cease operations for a period of 60 days pending the completion of certain operational and compliance audits. Limetree Bay Refining and five of its affiliates filed for bankruptcy in July 2021. According to Court documents [United States Bankruptcy Court for the Southern District of Texas, Case 21-32351], in December 2021, West Indies Petroleum Limited and Port Hamilton Refining and Transportation, LLLP were designated as the winning bidder in the auction and sale of all Limetree Bay Refining, LLC’s assets. The Court-approved transaction closed in January 2022, and all assets were titled to Port Hamilton Refining and Transportation, LLLP (Port Hamilton). Limetree Bay Terminals, LLC (dba Ocean Point Terminals) continues to own and operate terminal assets such as tanks, docks, and associated infrastructure. The ERT has not owned or operated terminal or refinery assets at the Site and continues with its charge to wind-down certain of HOVENSA’s affairs including the clean-up requirements under the RCRA Permit. Current landowners at the Site include the ERT, the USVI, Limetree Bay Terminals, L.L.C. (dba Ocean Point Terminals), and Port Hamilton Refining and Transportation, LLLP.