Virgin Islands refinery to shut down

When you think of the U.S. Virgin Islands, you probably envision sunny beaches and tropical cocktails, rather than petrochemicals. But that island paradise has also been the longtime home of one of the world’s largest oil refineries. Until 2011, when it scaled back production, it was actually the third-largest in the U.S.

The operators of the massive refinery have announced that it will close soon. Nearly 2,000 of the 108,000 residents of the economically distressed U.S. territory currently work at the facility, raising significant concerns about the impact on the local economy.

The facility is a joint venture of Venezuela’s state-owned petroleum producer and the U.S.-based Hess Corporation. Its operators cite losses of more than $1.3 billion in the last three years and the fact that the refinery’s operations are fueled by costly oil instead of natural gas as key reasons for the shutdown. It also had recently been ordered to pay fines for environmental noncompliance. The owners plan to convert the refinery into an oil storage terminal.