Problem-plagued Virgin Islands oil refinery shuts down indefinitely

June 21 (UPI) -- The controversial, problem-plagued Limetree Bay oil refinery in the U.S. Virgin Islands has been closed indefinitely due to financial problems, its owners said Monday.

Shuttered since May 12 under a 60-day suspension issued by the Environmental Protection Agency, Limetree Bay Energy said it has suspended plans to restart the 210,000 barrel-per-day facility on the island of St. Croix because of "severe financial constraints."

"This was an extremely difficult decision for us, and we are truly saddened to announce suspension of our restart plans for the refinery," Limetree Bay CEO Jeff Rinker said in an issued statement.

"Our personnel have demonstrated tremendous commitment and dedication in restarting the refinery, and we continue to be proud of their hard work. Unfortunately, this is our only option, given the extreme financial constraints facing the company," he said.

Rinker said the company will lay off all of its 271 employees effective Sept. 19.

Formerly operated by Hovensa LLC, the St. Croix facility is an integrated petroleum refinery consisting of refinery process units and supporting operations including sulfur recovery plants, steam and electric power generation and a marine terminal.

It has long been a key employer in the Virgin Islands -- in its heyday in the 1970s, the facility produced 650,000 barrels of crude oil per day, making it the largest refinery in the Americas.

But it has also long been the subject of environmental complaints. It was closed for eight years before the Trump administration issued a permit for it to be restarted by its new owners in December 2020.

Shortly after the February restart, however, low-income residents living nearby reported becoming sickened by air pollutant and oil releases from the facility.

The EPA under the Biden administration last month ordered the 60-day pause of its operations to determine whether the plant presented "an imminent risk to public health."

The refinery had experienced "multiple major mishaps resulting in significant air pollutant and oil releases," EPA Administrator Michael Regan said in a statement. "These repeated incidents at the refinery have been and remain totally unacceptable."

The agency has since been working to provide relief and assistance to the surrounding St. Croix community.