Biden White House blocks Virgin Islands refinery expansion permit over pollution concerns

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency on Thursday revoked a permit that would have allowed a U.S. Virgin Islands oil refinery to expand with limited review, citing concerns that the area around the facility is already overburdened with pollution.

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The move marks the first big move by President Joe Biden’s EPA against a large industrial facility over considerations of environmental justice, which Biden has said would be a big priority for his administration.

The Limetree Bay refinery, located on the island of St. Croix, fully restarted earlier this year, with a goal to process up to 200,000 barrels of crude oil every day. The refinery can keep operating, but it cannot pursue additional expansion before an environmental review to assess measures the facility needs to take to protect nearby residents.

“Withdrawing this permit will allow EPA to reassess what measures are required at the Limetree facility to safeguard the health of local communities in the Virgin Islands, while providing regulatory certainty to the company,” said EPA acting Regional Administrator Walter Mugdan, in a statement.

Some local residents told Reuters recently here that since the refinery restarted they have had difficulty breathing, along with headaches and watery eyes. Some reported oil droplets covering their homes and chemical odors like rotten eggs. The facility employs several hundred people, which the island's governor has praised as necessary during "difficult economic times."

After nearly a decade idle, the refinery restarted last month after securing a permit from the Trump administration on Dec. 2, 2020. That permit would allow Limetree Bay to build additional units without being deemed a new source of pollution, which triggers more stringent regulatory controls.

A Limetree Bay spokesperson said the company is “disappointed in the EPA’s decision,” saying the permit would have streamlined the process for potential future investment.

Environmental groups cheered the decision.

“Withdrawing this permit is correcting a grave oversight of the previous administration,” said Jennifer Valiulis, executive director of the St. Croix Environmental Association. “Our island community and environment have suffered for decades due to lax monitoring of emissions, poor enforcement, and inadequate protections.”

Former President Donald Trump made it a priority to roll back environmental regulations he viewed as overly burdensome on the industry. Biden campaigned on a promise to bring the U.S. economy to net zero greenhouse gas emissions by 2050 and to fight pollution in poor and minority neighborhoods.

The owner of the refinery, Limetree Bay Ventures, backed by private equity firms EIG and Arclight Capital, had challenged requests by the EPA to increase air quality monitoring after its restart, arguing the monitors are not necessary and it should not pay to operate them.

Reporting by Valerie Volcovici; additional reporting by Laura Sanicola; Editing by David Gregorio