MarketWatch.com reported this morning that Hess Corp. plans to close its Hovensa oil refinery on St. Croix. The company said the refinery is one of the 10 largest in the world.
"Hovensa is our largest private employer, taxpayer and the supplier of our fuel," said one VI resident. "WAPA (water and power) also gets its fuel from them … believe the number of jobs lost is projected at over 1,500 people – in the plant alone – but the ancillary effects on everything else in the economy will be devastating." (The Hovensa Web site says the unit employs 2,500 people.)
At midday, the Governor issued a statement. "It is hard to imagine any single piece of economic news worse for this territory," he said.
What's it mean? Besides the loss of the Territory's largest employer and thousands of jobs? Well, on a very basiuc level, VI residents already pay a sky high price for electricity. Blue Tang, our two-bedroom villa, had a $550 electric bill in December, hardly a time for intense use of air conditioning. So, that's just for fans and hot water and the pool pump. If the Territory needs to source fuel oil from somewhere else, the price of power is only going to rise.
Maybe Hess could have put the Hovensa unit into bankruptcy. It's possible a reorganization would result in lower operating costs. However, the MarkeWatch.com story said Hess "explored all available options".
Bloomberg reported Hovensa "will shut the St. Croix plant by mid-February and convert the 350,000-barrel-a-day plant into an oil storage terminal."