St. Croix’s Port Hamilton Refinery Battles Legal Challenge Over Emissions Technology

Port Hamilton Refining and Transportation is embroiled in a legal dispute, seeking judicial support to bypass the installation of costly emissions control technology—a step crucial for resuming its operations. The heart of the contention lies in a motion presented to the district court last Friday, asserting the refinery’s stance against an EPA-enforced consent decree.

The conflict originates from incidents in early 2021, when significant flaring events led to the shutdown of the St. Croix refinery, pushing its former owners towards bankruptcy. The EPA interprets these incidents as triggering a mandate under a revised consent decree for the installation of a flare gas recovery system—a requirement Port Hamilton contends was not in effect at the time of the events.

Port Hamilton’s legal representatives maintain that the EPA’s stance misinterprets the decree, arguing that the mandate for the flare gas recovery system, established in December 2021, was subsequent to the flaring incidents. Therefore, they argue, the incidents could not possibly invoke the requirement.

The dispute underscores the substantial financial implications of installing and operating a flare gas recovery system, which Port Hamilton suggests could financially incapacitate the company, preventing the refinery’s restart. The company warns of potential EPA enforcement actions if operations resume without the system, absent court-sanctioned approval.

This legal quagmire traces back to a consent decree formulated to address violations of the Clean Air Act by the refinery’s previous owner, HOVENSA, in 2011. Following HOVENSA’s 2015 bankruptcy, Limetree Bay, the subsequent owner, inherited the decree’s obligations. The flare events of February 2021 unfolded ahead of the court’s approval of a decree modification in December 2021, a fact the EPA noted, emphasizing the original agreement’s continuity until judicial endorsement.

The refinery’s sale to Port Hamilton in December 2021 marked a new chapter, with the company joining the consent decree in September 2023 without a definitive ruling on its liability. Port Hamilton’s legal argument emphasizes the precedence of court approval for consent decree enforcement, a principle they argue is clear in the decree’s modification text.

The ongoing legal battle presents a pivotal moment for the refinery’s future, with Port Hamilton urging the court for a decision that would absolve it from installing the flare gas recovery system, thus determining the facility’s operational viability.