Very bad news for the Virgin Islands

HovensaMarketWatch.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."

5 thoughts on “Very bad news for the Virgin Islands”

  1. Now that is truly the most ego maniacal comment I’ve read anywhere in a long time. Let’s see VI resident or Exit Zero. Use your actual name and maybe you’ll get full credit. Laughable.

  2. I would think it would be considered a great thing if STX can return to nature and no longer be an industrial island. Now they an focus solely on tourism. I always thought of Hovensa as an eyesore and a polluter. So why aren’t we celebrating their departure? Time to run an underwater line from Puerto Rico to the VI’s for our electricity needs…

  3. OK MIT how are you going to employ all the people losing their jobs? Oh that’s right, let’s have them be dependent on the government. No one needs to work for a living as long as we have a bountiful public trough. Maybe they can start making solar alternatives like that successful company Solyndra. Oh wait that went under didn’t it?
    The underwater line from Puerto Rico to VI’s. Gee that won’t disrupt the ecosystem or cause any damage. Who would foot the bill for that? Uh the consumer would have to eat that cost. I assume you are ok with that. Sacrifice right?

  4. The official name of the British Virgin Islands is simply the Virgin Islands, and the official name of the United States Virgin Islands is the Virgin Islands of the United States. In practice, the two island groups are almost universally referred to as the British Virgin Islands and the United States Virgin Islands, to distinguish them from one another.

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