EPA Red Tape Represents Major Obstacle for Potential Purchase and Restart of Limetree Bay Refinery
Potential buyers of the oil refinery on the south shore of St. Croix expressed pessimism regarding the possible restart during an impromptu court status conference Monday morning, with the main issue being concern over the Environmental Protection Agency's permitting process.
"I am sure that any going concern bidder would have to say, 'well why would I put a DIP [debtor-in-possession financing] if I only know that I'm going to have that roadblock and the value that I'm going to get is going to ultimately be liquidation value if I can't meet that hurdle," said Gregg Galardi, St. Croix Energy LLLP counsel, referring to the EPA's permitting for restart of oil refining at Limetree Bay. "And there's nothing wrong with the EPA's position as we all understand, but it does take a lot of work to deal with the permits."
EPA attorney Rick Kincheloe said the EPA was unwilling to deviate from the methodology that it has applied to such matters. "There's a lot of things that have to go in notice and comment as proposed decisions before the EPA can make a decision, and so the process to get an answer on permitting is just not short, and it's not something the EPA can front load. So we've tried to be candid with [potential buyers] so that they can evaluate that risk and they can put a dollar amount on it," Mr. Kincheloe said.
He added, "One of the problems we're running into is it's one thing if Limetree said, 'okay, we're going to restart and can you give us some guidance, this is what we plan to do.' It's another thing for a buyer to take the facility and then come to EPA and say, 'this is what we plan to do, what do you think.' It's as far as I know unprecedented for a prospective buyer to come to EPA and say, 'this is what we think we're going to do, what do you think,' before they own the facility. I'm not aware of that having happened before, or if EPA has given an answer. And the EPA is understandably uncomfortable deviating from the way it applies non-bankruptcy law."
Read more: https://viconsortium.com/vi-business/virgin-islands-epa-red-tape-represents-major-obstacle-for-potential-purchase-and-restart-of-limetree-bay-refinery
