What will the President of The United States do?

Go to a basketball game? Go to Hawaii?Or go to a basketball game in Hawaii.(tu)

WGAF,
Did you find a Job Yet?

Nice try WGAF, but no go. You'll need to do better than that to join 'Club Snarky' - we have our standards. 😎

That aside, interestingly enough the story hasn't hit any major online news sites yet. She's a bloody big refinery as a portion of our nations capacity. You think it would be a worthwhile news item.

As side note, it appears that the Obama administration is going to void the Keystone pipeline. Not a good choice, IMO.
I guess we will have to rely on more sun and wind! 🙂 That seems to be working good!

That aside, interestingly enough the story hasn't hit any major online news sites yet. She's a bloody big refinery as a portion of our nations capacity. You think it would be a worthwhile news item.

Yeah it has. Wall Street Journal, SF Chron, WaPo, ABC, Bloomberg, Biz Week, CNBC ... all have been chattering about the refinery closure all morning. Maybe you're stuck in the SOPA blackout?

back on topic..
http://www.cnbc.com/id/46037851
found one reference online where our govenor is quoted " ...a complete body blow.."

As side note, it appears that the Obama administration is going to void the Keystone pipeline. Not a good choice, IMO.
I guess we will have to rely on more sun and wind! 🙂 That seems to be working good!

Gone, your are right. It's all over the news. But the administration is trying to let the State Dept. say no so he won't be blamed. But the current legislation requires it to be the Pres. and if the answer is no, he is to provide a full rationale to the Congress.

http://politicalticker.blogs.cnn.com/2012/01/18/white-house-to-announce-opposition-to-keystone-pipeline-project/?hpt=hp_t3

If you have the oil available why not use it to lower costs and improve the standard of living. This no vote on the pipeline in no way helps people on welfare to help themselves to get off welfare. It's like they are trying to make everyone dependent on the gov. I too don't like being dependent on "foreign" oil, but I don't consider Canada foreign even if they are a different country. At least with the pipeline the USA is in Total Control of it.

As this is a serious crisis facing the USVI, it does seem that turning the thread immediately into a President-Bashing forum is a bit callous and immature. The Hovensa closure is not a light hearted topic. It will invade all aspects of life in the USVI due to decreased revenue to the territory, especially on St. Croix.

Just a few of the things to expect this year:
Rising prices at the gas stations
Rising WAPA rates
Rising prices on everything else since stores and restaurants will also be paying higher WAPA bills
Higher crime rate
Fewer consumer goods available as the lower purchasing power will force stores to stop stocking things we take for granted

The private schools will likely close or at least consolidate into just one facility as more than half the kids enrolled are paid for by Hovensa
Doctors and other professionals leaving island due to the smaller demand for their services and fewer insured patients, etc.
No jobs available and the highest unemployment rate in the country without much chance of that improving in the foreseeable future
Other businesses will lay people off due to lower business volume and some businesses will close completely
Real Estate prices will drop even further and we could wind up with a foreclosure surge, which is very unusual in the islands

For those in service jobs, business will be slower than ever as residents will have little to no disposable income
Many restaurants and retail stores will close, as will some service providers
Many of your friends and neighbors will leave island, so if you stay your social life will take a dip, too.

Substance abuse issues increase when the economy suffers and people lose hope
Physical violence towards others, both domestic violence and public assault, increase when people are out of work and stressed

With fewer people working, there are fewer to pay income taxes while more people go on assistance, increasing the financial shortfall we already face
Property taxes will go unpaid, decreasing government revenues even further

Rising crime and decreasing availability of services will have a negative effect on tourism as people won't come if there is nothing to do and nowhere to eat and be entertained, etc.

It won't be only the contractors who leave island. Many locals who have been employed by Hovensa may find it financially necessary to leave as well. These are the locals who have some training and experience and job skills and who haven't been living on welfare benefits. It won't be good for the island for them to leave as where will the workforce be when a new company does want to open?
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That's just a sampling of negative impacts to come. There will be more.

This will definitely affect mainlanders, too, as Hovensa produces a large percentage of the jet fuel for the American aviation industry. Expect to see airfare increases everywhere as the airlines seek a new supplier that has to ship the fuel further.

So I for one hope that CITGO or someone DOES manage to restructure the company and reopen by this summer. Our Governor and Delegate to Congress said today that they're applying to the federal government for emergency funds to help with the huge expense to the Department of Labor for unemployment claims, retraining, etc. What the island needs is JOBS, not handouts.

Alexandra.
" EXCELLENT POST"

x2 excellent post.

I am wondering if Biden's recent "vacation" to St. Croix may have been to deal in some way with the impending closure... not exactly "the president" but close...

Maybe it is time to reconsider the development projects that seem to be stalled in St Croix and get them going now. Lots of jobs in these developments as well as tax revenue.

I read somewhere that the statistical point for critical mass for a community to have enough people to be a self sustaining economy is 20k. St. Croix has two and a half times that. There are enough people to generate enough income, and provide services to each other, to support enough core businesses like banks, supermarkets, utilities, and to form enough households to keep service industries like plumber, carpenter, babysitters, roofers, house help, landscapers, painters, cistern maintenance, tutors, computer repair, hairdressers, and any other such profession in demand. I know, WAPA, GERS, HOVENSA.... a lot of people who are losing their jobs have skills, sometimes multi-skilled. If they were worth anything NEAR what they were being paid, they should be able to work for people and smaller businesses, or start their own, even if it is sole proprietor. Use Craigslist. http://virgin.craigslist.org/ It is free. Post what you have to offer. Your posts will expire after 30 days, so you will need to re-post at LEAST that often. You can re-post more often to bump your ad ot the top of the list, by going to your validation email and clicking on the link to your ad, If it says "Repost your Ad" as one of the options, click it. Get on it and do it right now. Takes just a minute, and might keep food on your table. You never know until you try and you have nothing to lose other than a few minutes of your time.

I agree with Alexandra about BIG change will occur.....BUT....Let's think of some bright positives that may occur also......lower values may increase purchases of real estate from many sources and newcomers=$$$$,less pollutants in our enviorment and water/corals....government office workers may shrink....Think did hovensa dollars fix the pot holes ?nope hovensa created many jobs yes but also inflated many other things...There will be tough times no doubt but other long term opportunities still exist ..What other positives can YOU think of?????*-):-(

One of the posts today on Facebook came from a local journalist who posted some revenue statistics for the USVI in 2007. The numbers dramatically show how bringing in a few new mom and pop businesses or even bringing in three times as many cruise ships as St. Thomas gets isn't going to make a dent compared to the revenue Hovensa produced for the USVI each year. Admittedly a lot of the cruise ship revenue isn't reported as it's received in cash, but the figures are still dramatic.

Here's his post:
FYI... To truly understand the real economic depth, magnitude or impact of Hovensa closing the oil refinery, Hovensa annual revenue is $12,258,297,000(billion). The U.S Virgin Islands' economy generated $19 billion in sales in 2007 (according to U.S Census). Businesses in St. Croix reported $16.1 billion in total sales -- 83 percent of U.S. Virgin Islands total sales in 2007 -- while St. Thomas reported $3.1 billion in total sales. Hovensa accounted for a health chunk of the St. Croix revenues.

Hurricane Hugo.
Hurricane Hovensa?

Regardless of whether a buyer emerges, this crisis could be the mother of intervention and reinvention that's long overdue.

Societies all over the world, in much worse conditions, are self supporting. Almost all of them. There is no reason STX cannot stand up and be counted among them.

Figures lie...and liars figure....the economy will adjust or it will fail..The president is a side show at best and can't be counted on.Some rich investors will hopefully react when prices and terms are readily available.The old saying in real estate is ........real estate always converts to its highest and best use. In this case it might take 40 years for that to happen...........................

Hurricane Hugo.
Hurricane Hovensa?

Regardless of whether a buyer emerges, this crisis could be the mother of intervention and reinvention that's long overdue.

Yes - but will we survive the likes of "Hurricane Chucky" ? (although downgraded to a huge tropical depression) 😎

I wonder how much Chavez/Venezuela owning part of Hovensa effected this decision.

With the up coming election, the President's camp wants distance from Chavez. Hence the VP's Biden's "vacation" (without Dr. Biden and family) over the Christmas holiday. Frankly, I don't see the feds giving any "help" to any venture involving Chavez. Additionally, the LNG issue is environmental hot button.

Hess begged the VI government (and most likely the feds too) for cost cooperation on LNG conversion. Hovensa need cooperation. I suppose the territory/feds decided that closing plant and the resulting economic tsuami (lost tax revenue, unemployment, closing schools, residents without health benefits, and so on) would be cheaper than making an investment in infrastructure.

One thing for sure, it's going to be a nightmare for our airport to get aviation fuel for all the flights that are being fueled daily. When we were operating Caribbean Flight Center and handling the government refueling contract, on the days that we had military flights coming in, we were hauling multiple tanker loads of fuel from the refinery every day.

We had the biggest fuel farm on the airport, but it wouldn't handle more than a few of the big planes before needing replenished. Having a refinery right down the road made it all possible. For the airport to now need to put in sufficient aviation fuel storage facilities to contain a tanker load to be replenished from time to time when ships bring it to the island will be a nightmare and cannot be accomplished overnight. The expense will be staggering not only to build the storage tanks (or possibly they could lease tankage from Hovensa if they are willing to maintain the tank and loading rack) but more so for the up front cash necessary to buy a large shipload of jet fuel all at one time rather than 9000 gallons at a time. I'd expect fewer military flights coming to STX and they may have to make special arrangements if the Hurricane Hunters are still going to fly storm reconnaissance out of our airport.

WAPA also is facing this supply issue, as are the gas stations (which typically get loads of gasoline delivered directly from the refinery every Friday). Possibly some agreement will be worked out with Hess to be able to use some of the oil storage capacity at the refinery to stockpile fuel for WAPA. If not, the supply line would be fragile and could easily be disrupted during storm season.

Logistically, there are lots of business ventures that will now need fuel plans revamped, such as the resorts that operate their own generators for their power needs.

The complications are endless. While we can all economize some on the amount of fuel we consume, we aren't going cold turkey... and yet we almost have to.

One of the posts today on Facebook came from a local journalist who posted some revenue statistics for the USVI in 2007. The numbers dramatically show how bringing in a few new mom and pop businesses or even bringing in three times as many cruise ships as St. Thomas gets isn't going to make a dent compared to the revenue Hovensa produced for the USVI each year. Admittedly a lot of the cruise ship revenue isn't reported as it's received in cash, but the figures are still dramatic.

Here's his post:
FYI... To truly understand the real economic depth, magnitude or impact of Hovensa closing the oil refinery, Hovensa annual revenue is $12,258,297,000(billion). The U.S Virgin Islands' economy generated $19 billion in sales in 2007 (according to U.S Census). Businesses in St. Croix reported $16.1 billion in total sales -- 83 percent of U.S. Virgin Islands total sales in 2007 -- while St. Thomas reported $3.1 billion in total sales. Hovensa accounted for a health chunk of the St. Croix revenues.

This is an EXTREMELY distorted article and shame on whoever wrote it for trying to stike more fear into people. I am not saying it is not a fact....... it is true and a fact, HOWEVER, where did Hovensa's revenue go???? Do you think all of that money went directly to the residents? um, NO! That figure is for ANNUAL REVENUE. Now, when there is a SALE of an item in St. Croix, that money goes DIRECTLY INTO THE POCKET OF RESIDENTS. Shoot, I bet 10 billion of the Hovensa revenue is going all over the place, well outside the U.S. or any of its territories. Once we have a chance to soak this up and get over the shock and stop thinking about all the negative things that "might" happen, I'm sure all of the STX residents will put their heads together and come up with something bigger and better and will generate the good revenue....... the good is the type that goes directly into pocket

I think the point is that the USVI taxes that $12 billion of revenue, and now they can't.

Taxes aren't on revenue, they come on income (with the exception of Gross Receipts taxes which I don't believe Hovensa paid). Hovensa was losing massive amounts of money over the last 3 years so I imagine it had no tax burden as a corporation.

Now it's employees who were paying income taxes and will no longer be able to is another story. I think this is where the $60 million number I keep hearing thrown around by politicians is coming from.

Sean