Posted on 01/20/2012 4:26:10 PM PST by wildbill
ST. CROIX - After 45 years operation as the territory's largest private employer, HOVENSA announced Wednesday that the 350,000-barrel-per-day refinery will shut down and more than 2,000 employees will be dismissed.
"This is a catastrophic event. This is like a hurricane hitting a community or an earthquake," said Sen. Louis Patrick Hill, who began a Senate committee hearing with an announcement of the news Wednesday.
HOVENSA has 2,150 direct and contract employees, and its operations account for about 20 percent of the territory's gross domestic product.
The refinery's closure represents "at a minimum" a loss of about $60 million in annual tax revenue for the government, from real property taxes and employee income taxes, deJongh said.
"It has been losing money in the last three years," said Fadel Gheit, the senior oil and gas analyst for Oppenheimer and Co. "Stopping the refinery does not make it profitable. It just stops the loss. It's the lesser of two evils."
In addition to the lull in demand for refined products, HOVENSA and other domestic refineries were put at a competitive disadvantage by the construction of new, highly efficient refineries in developing regions such as Asia and the Middle East, Gheit said.
"Every company I know of is bailing out of refining," he said. Losses were not limited to the refinery's operations, however, and the future held at least $700 million in environmental upgrades required by the U.S. Environmental Protection Agency under terms of a consent decree lodged in federal court about a year ago.
Quarterly stockholder reports from Hess consistently have painted a dire picture of the refinery's situation, and a report from Goldman Sachs released last week speculated about how much longer HOVENSA could actually hold out.
In the end, there was "no other choice," HOVENSA officials said.
Read more: http://virginislandsdailynews.com/news/hovensa-closing-1.1259790#ixzz1k2yB3B4G
(Excerpt) Read more at virginislandsdailynews.com ...
Where are the republicans in defunding these criminals. HELLO!
Now that’s a whole lotta Change without any Hope.
Fore!
Remember when the MSM and Dems laughed at Rick Perry when he said he wanted to dismantle three Departments of the Government to stop waste and non-functional departments?
And how they slobbered all over themselves when Obama says he wants to combine two Departments and get rid of waste and duplication.
Not many businesses can survive a $700 million dollar hit.
Looks like the EPA just screwed a few thousand black workers ...being that the VI is 90% or so black. Their attitude must be "screw 'em they can't vote for Obama anyway because VI is a US territory"
Anyways, put them on Bammy Boys food stamps list
most all of their oil came from Venezuela... and it's prolly the thickest sludge around and hard to refine, so what does Yugo do now??? this will about sink STX...
Newt must Nuke the EPA on January 21st right after being inaugurated. And if lib judges defy him on this, then fire their arses
Other than the notorius VI government jobs, the Hess refinery was the highest paying employer in the Islands.
The ripple effect will go on for years, but one thing I can guarantee—the rate of tourist assaults and robberies is gonna go out of sight.
Back in the 70s some local ‘communist’ guerillas decided to start a revolution on St.Croix by killing a few white tourists on the 18th hole of a luxury hotel golf course.
It took years for the tourist industry to rebound a little bit on St.Croix and the hotel never recovered. The last time i visited the ruins of the hotel a few years ago it was like something from an Indiana Jones film with jungle vines overrunning the ceilings and lobby and the rooms had all been stripped of anything that could be sold.
Back in the 70s some local ‘communist’ guerillas decided to start a revolution on St.Croix by killing a few white tourists on the 18th hole of a luxury hotel golf course.
I actually remember that
US is losing refinery capacity. Most of the refineries on the east coast are either closed or being closed. We need to build new refineries.
yup, there were a bunch of useless eaters who fancied themselves as Mau Mau's and murdered eight American tourists at the Fountain Valley golf course owned by the Rockefeller familyi used to live on /own property on STX(not at that time) and this will make the island damn near unlivable which it almost is now is you are white
I have a friend from Texas who used to own two spots down at the main corner of Christiansted. He lived on a super estate on the top of the tallest mountain over-looking the town.
A few years ago some thugs started harassing tourists going to his clubs and demanded protection money. He deciced it was time to get out.
St. Croix never had the tourist base of St. Thomas and the people there never have had the feeling that the tourist is their life-blood. I predict things will get very nasty there very quickly.
yup... i lived above Frederiksted and sold out in 2006 as it was simply tooo dangerous and you start feeling like a fugitive from the law of averages 
When you live in a place with a small population but has several businesses that specialize in training attack dogs for home protection, you know you are in trouble. :-0
Perhaps they should bring in some planning consultants from Haiti. That should fix things up real quick... /g
bingo... i was the next to the last place on a dead end hill top road and could hear the dogs barking along the fire chain if a car was coming it was too far for crackheads to walk, and if they come by car, it's to rob you after they kill you
prolly couldn't do much worse...
About 20 years ago I was looking to buy/build a bar business in the islands and spent a LOT of time there over several years, fruitlessly as it turned out.
The first thing I did on each island was to ask around for the most politically connected attorney. I hired them and they kept me out of serious trouble. The attorney on St. Croix was Kenneth (M——?), a nice young guy who became the Senator for St. Croix in the legislature.
I made several offers on land/buildings but found out the “belongers” —and their realtors—ideas about business ethics and practices would put them in jail in the U.S.
One of the properties I looked at on St.Croix was the old windmill restaurant near Fredricksted. After I made an offer with a earnest money deposit to the old lady who owned it, her nephew, an attorney, stepped in and bought it. I guess he thought he’d get it for free when she died.
Another one was the old dock and gasoline storage acreage for Cruzan Rum on the beach road out of Fredericksted. When I met their price and tendered money, they withdress it from the market (temporarily as it turned out, I think, and a buddy of the Board bought it.)
There was a bar/restaurant on the main street of Fredericksted that was owned by two gay guys who were splitting up and wanted to sell. Never made a deal on that one as they wanted too much.
Then there was the old abandoned resort out on the beach road in the opposite direction (Ham’s Bluff). Again, as soon as I showed interest, a local politician stepped in and bought it from under me.
In St. Thomas things were worse. A guy tried to sell me a restaurant overlooking the bay at Charlotte Amalie that was perfect. But my attorney told me that he didn’t own it. The owner was his ex-wife who was in a mental institution and her three crackhead kids would inherit. The Realto knew, or should have known, all this.
I still go back from time to time but mostly to sail and enjoy the islands. I’m too old now to worry about getting into business down there.
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