Hovensa LLC, a joint venture between subsidiaries of Hess Corporation and Petroleos de Venezuela, S.A., and the owner of the second-largest petroleum refinery in the United States, has agreed to pay a civil penalty of more than $5.3 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, US Virgin Islands refinery.
Hovensa is one of the 10 largest refineries in the world and has the capacity to refine more than 525,000 barrels of crude oil per day. Hovensa LLC became the owner and operator of the former Hess Oil Virgin Islands Corp. (HOVIC) refinery on 30 October 1998. HOVIC, a wholly owned Virgin Islands subsidiary of Hess Corporation, was established to construct and operate an oil refinery in coordination with the Virgin Islands Government’s efforts in the 1960’s to diversify the economy of the islands.
The settlement with the US Environmental Protection Agency (EPA) and the US Department of Justice (DOJ) 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.
The government's complaint, filed concurrently with the settlement, alleged that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant.
Once fully implemented, the pollution controls required by the settlement are estimated to reduce emissions of nitrogen oxides (NOx) by more than 5,000 tons per year and sulfur dioxide (SO2) by nearly 3,500 tons per year. The settlement will also result in additional reductions of volatile organic compounds, particulate matter, carbon monoxide and other pollutants that affect air quality. Additional pollution-reducing projects at the refinery’s coking unit under the settlement will also reduce greenhouse gas emissions by over 6,100 tons per year.
High concentrations of SO2 and NOx, two key pollutants emitted from refineries, can have adverse impacts on human health, and are significant contributors to acid rain, smog, and haze.
The government of the US Virgin Islands has joined in the settlement and will receive a portion of the civil penalty. In addition, the company will set aside nearly $4.9 million for projects to benefit the environment of the US Virgin Islands. The projects will be identified jointly by the US Virgin Islands government and Hovensa, in consultation with EPA.
The settlement with Hovensa is the 28th under an EPA initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide through comprehensive, company-wide enforcement settlements. The first of EPA’s settlements was reached in 2000, and with the new settlement, 105 refineries operating in 32 states and territories—more than 90% of the total refining capacity in the United States—are under judicially enforceable agreements to significantly reduce emissions of pollutants.
As a result of the settlement agreements, refiners have agreed to invest about $6 billion in new pollution controls designed to reduce emissions of sulfur dioxide, nitrogen dioxide and other pollutants by more than 360,000 tons per year.