St. Croix oil refinery shuts down "indefinitely" from financial restraints

A controversial oil refinery in St. Croix, U.S. Virgin Islands, is shutting down "indefinitely" because of "severe financial constraints," its owner, Limetree Bay Energy, announced on Monday.

Why it matters: The future of the refinery, which recently showered oil on homes in nearby communities and polluted drinking sources, is unknown, and it is unclear how cleanup in the future would be handled, the Washington Post reports.

The Environmental Protection Agency in May ordered the refinery to cease operations for 60 days "due to multiple improperly conducted operations that present an imminent risk to public health."

• Limetree Bay voluntarily ceased operations before the EPA order after a flaring event showered homes in nearby communities with oil droplets.
• The company said the flaring event was the result of a malfunctioning coker unit and warned residents to avoid drinking from rainwater cisterns on Thursday.

What they're saying: After the May shutdown, Limetree Bay said it had been working to obtain capital to help its restart efforts.

• "Regrettably, the Company has been unable to secure the necessary funding and will be required to reduce the refinery’s workforce by approximately 271 employees, effective September 19, 2021," it said in a statement.
• “Our personnel have demonstrated tremendous commitment and dedication in restarting the refinery, and we continue to be proud of their hard work. Unfortunately, this is our only option, given the extreme financial constraints facing the Company," CEO Jeff Rinker said.

The big picture: The 1,500-acre facility sat idle for four years until 2016 when Boston-based private equity firm Arclight Capital Partners acquired the plant and recruited other investors to attempt to resume operations, according to Reuters.

• Since that attempted restart, the facility has suffered several financial and operational setbacks.