Historic: Senate Approves Arclight Deal
Roll Call:
Sen. Kurt Vialet - Yes
Sen. Marvin Blyden - Yes
Sen. Novelle Francis - Yes
Sen. Kenneth Gittens - Yes
Sen. Neville James - Yes
Sen. Tregenza A. Roach - No
Sen. Janette Millin Young - No
Sen. Clifford Graham - Yes
Sen. Terrence Nelson - No
Sen. Jean Forde - Yes
Sen. Justin Harrigan - No
Sen. Almando Liburd - Yes
Sen. Nereida Rivera-O’Reilly - Yes
Sen. Myron D. Jackson - No
Sen. Sammuel Sanes - Yes
Let's see. 13 million barrel storage. Times about 40 cents per barrel per month as storage fees. That's about $62M annual revenue for Arclight. We don't know their expenses, but it doesn't matter, since VI government is entitled to 10% of the gross revenue, which would be about $6M annually.
So, VI government gets $220M upfront sale payment, plus $81M in other upfront payments, plus about $6M annually. Is that right? That's better than nothing!
Actually it's more like 50cents/bbl and the 13 million bbls is just what is available now. There is another 30 or so million bbls that will be brought on line over the next year with plans to build more storage. Additionally should some type of light refining be feasible the Gov't gets 17% of that gross. Their obligation to spend 125 million in the first year for site improvements Is very conservative. We also share 50/50 after the first 5 million in profit for any refinery units that can not be rehabilitated and are dismantled and sold for scrap. Article 8 spells it out
Happy days are here again!
So let us know how things go down the road with improving life in STX now that the deal is done. Good luck, y'all.
Less toxic emmisions, improved ports and dockage, a relatively stable stream of income and some jobs and removal of the antiquated refinery infrastructure.....In today's petro economy ...a good deal.
So let us know how things go down the road with improving life in STX now that the deal is done. Good luck, y'all.
the alternative was:
- zero revenues vs. $220mil up front and another $17mil/year for 40 years
- a rusting eyesore like the closed refinery in Puerto Rico
I watched the proceedings on LegitV - interesting comments from the voting Senators for sure - and there was a Long Recess before the final vote and we laughed and thought " this is when they pass out the envelopes and brown bags"
I couldn't be happier... I hope for expanded refining ASAP & more jobs will be awesome!
Additional revenue for the government to waste... well I'm not so excited about that, but usually companies like this do some cool stuff to buy the communities good will so that will be nice as well.
I watched the proceedings on LegitV - interesting comments from the voting Senators for sure -
anything worth repeating?
Actually it's more like 50cents/bbl and the 13 million bbls is just what is available now. There is another 30 or so million bbls that will be brought on line over the next year with plans to build more storage. Additionally should some type of light refining be feasible the Gov't gets 17% of that gross. Their obligation to spend 125 million in the first year for site improvements Is very conservative. We also share 50/50 after the first 5 million in profit for any refinery units that can not be rehabilitated and are dismantled and sold for scrap. Article 8 spells it out
Yep, it looks sweet for both sides. With the 41 million barrel capacity, I figured that Arclight would generate about $200M in gross annual revenues. The net profit would probably be about $100M annually. So, they will break even on their investments in about 3 to 4 years, and after that, it's just all crude sweetness. Not that it's a riskless game, though. It looks attractive now, because oil is in deep contango, and there is not enough storage in the world to store all the oil surplus. Who knows what's going to happen next.
oil is in deep contango, and there is not enough storage in the world to store all the oil surplus. Who knows what's going to happen next.
Economic warfare is better than actual warfare though right?
Why would 4 STT Senators vote against this deal? EastEnd, Sparty, Alana, and Old Tart... What part of:
- this deal is on a Bankruptcy Court deadline
- the alternative is a rusting pile of junk with Zero dollars
- the refinery will never employ 2000 workers again
- $220mil up front is a lot of money.
Don't they understand?
Are Millin-Young, Harrigan, Jackson and Roach Senators you support / voted for?
All STX Senators voted for the deal except Senator Nelson, whom I understand, but respectfully disagree with.
IMO, they knew it would pass without their votes, so by having a few say no makes the VI look like they weren't all steamrolled. Mapp also says the VI is getting $800,000,000 when a part of that ($300+ million) is dropping the tax refund lawsuit - not new money coming to the VI govt, so I think at least one senator had a problem with how the figures are presented to the people.
From what I know, those who voted no don't owe Mapp any favors.
The deal passed, and IMO, that's all that matters.
...
I watched the proceedings on LegitV - interesting comments from the voting Senators for sure -
anything worth repeating?
Most amusing was that Kenny G doesn't know what a C-Corp is, Positive doesn't trust any white lawyers (but we can't hold that against him), and there is no way Millitant-Young should be anywhere near economic development, let alone committee chair.
(edited) - Ok, I'll rescind that last comment - there could be worse senators selected to run that committee.
There's a perception by many on STX that STT senators just don't want anything good happening for STX, or at the very least, just don't care. It's usually the smaller stuff that they cite, like when they voted against rezoning for Blues Barbecue. Not sure I agree with that. But I hear that speculation often.
There's a perception by many on STX that STT senators just don't want anything good happening for STX, or at the very least, just don't care. It's usually the smaller stuff that they cite, like when they voted against rezoning for Blues Barbecue. Not sure I agree with that. But I hear that speculation often.
I am getting angry....because I am thinking what you are saying is the truth. They have no idea, no concept of how badly hurt STX has been by the Hovensa shutdown. To vote against this deal, when 6 of 7 STX Senators, and our STX Governor all support it.....I would hope STT voters will remember these 4 votes come November.
I'll have to agree with Island Hops about Militant Young!
Given the intelligence quotient, it boggles the mind how she continues to get elected. Ah well....
As far as this deal goes, if it helps STX, it benefits all of us in the USVI.
I wasn't being snarky in my comment above. I really do hope it works as you all are anticipating and I do wish STX good luck with bringing jobs and money into the economy and I am interested in hearing from your perspectives how things work out, down the road.
Does anyone have any idea if these 80-200 jobs will be higher paying positions similar to Hovensa?
I doubt very seriously that STT senators don't care about STX. Only 4 STT senators voted against, and their reasons were printed in the St Thomas/St Croix Source.
It passed. That's all that matters.
I don't care how anyone voted one way or another. They don't have our best interests in mind (this is not an exclusive USVI thing either). I live my life, I take care of my family, help out where I can, and refuse to be a little pawn in their games. I don't worry where my taxes are spent, I just don't. It's nothing that will change. I feel no matter how idealistic your initial reasons are for getting into politics you become jaded and part of the system. My life has been much more pleasant once I removed worrying about who gets elected.. Oh and when I stopped watching my hometown NFL team.
Does anyone have any idea if these 80-200 jobs will be higher paying positions similar to Hovensa?
Undoubtedly they will fall into a lower category given the facilities "storage" designation, that will change if any refining comes in.
I don't care how anyone voted one way or another. They don't have our best interests in mind (this is not an exclusive USVI thing either). I live my life, I take care of my family, help out where I can, and refuse to be a little pawn in their games. I don't worry where my taxes are spent, I just don't. It's nothing that will change. I feel no matter how idealistic your initial reasons are for getting into politics you become jaded and part of the system. My life has been much more pleasant once I removed worrying about who gets elected.. Oh and when I stopped watching my hometown NFL team.
I see you've started folding your first tinfoil hat. Don't worry, the more you realize the worse it gets.
Politics are the distraction for us "common folk" so we don't look deeper at the corporate interests that have completely corrupted "democracy" and regularly buy politicians via "donations".
but it's a fun distraction, isn't it?
...
I watched the proceedings on LegitV - interesting comments from the voting Senators for sure -
anything worth repeating?
Most amusing was that Kenny G doesn't know what a C-Corp is, Positive doesn't trust any white lawyers (but we can't hold that against him), and there is no way Millitant-Young should be anywhere near economic development, let alone committee chair.
(edited) - Ok, I'll rescind that last comment - there could be worse senators selected to run that committee.
Please tell me your Nelson comment is a joke. I have a hard time believing he said that, especially being a Crucian (where the most $ucce$$ful lawyers are white and beloved by the people).
Agreed that Kenny G and Militant-Young are idiots, though Young should be applauded for her increasing willingness to stand up to the Mapp Admin. I don't think she likes him at all.
I think the opposition from STT Senators was a political calculation that had little to do with animus toward STX.
Please tell me your Nelson comment is a joke. I have a hard time believing he said that, especially being a Crucian (where the most $ucce$$ful lawyers are white and beloved by the people).
....
"Positive" basically called Evan Schwartz a liar to his face. His actions during the hearings, and those of a couple of others, were antagonistic and disrespectful, totally lacking in social grace. It seemed that many of the senators were incapable of understanding the structure of corporate entities involved despite this being presented in diagram, and explained consistently during the hearings, too many times to count.
Don't get me wrong, I like Nelson and applaud his support for agriculture, yet in this case he went too far off the deep end for my liking. I can only imagine what it would have been like if Chucky was still around - crikey!
In all, I was impressed at the consistent composure and comportment shown by the Arclight testifiers in the face of what many would consider, a repeated barage of somewhat less than intelligent questioning. It was clear some senators were incapable of listening to the answers given and re-asked the same questions over and over - probably just for the soundbite or quote in the paper.
If any of the senators wanted to really put them on record they could have delved more into any of the following areas:
1) Provide a clearer picture of the 220m up front and total "800m" deal, subtracting out the questionable items and bringing it back to a more realistic figure of what will be usable to the VI. (Hopefully for tax refunds, overdue GERS payments, and debt reduction - but that's another topic).
2) Force a local hiring clause for any sub-contractors used by Limetree Bay. This would have been huge. Right now the agreement is for 80% of the Limetree Bay employees to be local hires (ok, so that's 64 of the 80 minimum positions). But when LTB starts operations and capital projects and brings in outside subcontractors (i.e. for building new tanks, building offshore pipeline docking, running marine operations etc.) then all those folks could be from anywhere. I don't believe there is any clause related to sub-contractors hiring locals. Of course you need to look no further than how our government uses non-local subcontractors as a prime example.
3) The operating agreement duration will likely be 25 years at most! 40 years is a dream. We are at a tipping point regarding global warming and fossil fuel consumption. Things must change. Tank farms won't be needed forever. And while the cost of storage will increase over time, the demand will likely drop as oil prices eventually rise. I'd say in 15 years there will be a scale back in operations to the minimum needed to meet the 7m annual payment.
4) Arclight made no secret that their exit strategy is to dump this outfit within 10 years. They know that long term there is little high-gain future in this enterprise. This was worth exploring further as to how the VI's long term interests could be more protected.
5) The possible buyback of land - does this mean the government cannot develop or sell any of the portion east of the refinery, as LTB could simply say, well that's a nice little building you put there, we want to expand so we'll take it, here's 10k for that acre. Simplification, sure, but something that should have been clarified.
And yet - I think that given the circumstances this is the best deal we have.
Anyway, that's just my opinion - I could be wrong 😎
Please tell me your Nelson comment is a joke. I have a hard time believing he said that, especially being a Crucian (where the most $ucce$$ful lawyers are white and beloved by the people).
....
"Positive" basically called Evan Schwartz a liar to his face. His actions during the hearings, and those of a couple of others, were antagonistic and disrespectful, totally lacking in social grace. It seemed that many of the senators were incapable of understanding the structure of corporate entities involved despite this being presented in diagram, and explained consistently during the hearings, too many times to count.
Don't get me wrong, I like Nelson and applaud his support for agriculture, yet in this case he went too far off the deep end for my liking. I can only imagine what it would have been like if Chucky was still around - crikey!
In all, I was impressed at the consistent composure and comportment shown by the Arclight testifiers in the face of what many would consider, a repeated barage of somewhat less than intelligent questioning. It was clear some senators were incapable of listening to the answers given and re-asked the same questions over and over - probably just for the soundbite or quote in the paper.
If any of the senators wanted to really put them on record they could have delved more into any of the following areas:
1) Provide a clearer picture of the 220m up front and total "800m" deal, subtracting out the questionable items and bringing it back to a more realistic figure of what will be usable to the VI. (Hopefully for tax refunds, overdue GERS payments, and debt reduction - but that's another topic).
2) Force a local hiring clause for any sub-contractors used by Limetree Bay. This would have been huge. Right now the agreement is for 80% of the Limetree Bay employees to be local hires (ok, so that's 64 of the 80 minimum positions). But when LTB starts operations and capital projects and brings in outside subcontractors (i.e. for building new tanks, building offshore pipeline docking, running marine operations etc.) then all those folks could be from anywhere. I don't believe there is any clause related to sub-contractors hiring locals. Of course you need to look no further than how our government uses non-local subcontractors as a prime example.
3) The operating agreement duration will likely be 25 years at most! 40 years is a dream. We are at a tipping point regarding global warming and fossil fuel consumption. Things must change. Tank farms won't be needed forever. And while the cost of storage will increase over time, the demand will likely drop as oil prices eventually rise. I'd say in 15 years there will be a scale back in operations to the minimum needed to meet the 7m annual payment.
4) Arclight made no secret that their exit strategy is to dump this outfit within 10 years. They know that long term there is little high-gain future in this enterprise. This was worth exploring further as to how the VI's long term interests could be more protected.
5) The possible buyback of land - does this mean the government cannot develop or sell any of the portion east of the refinery, as LTB could simply say, well that's a nice little building you put there, we want to expand so we'll take it, here's 10k for that acre. Simplification, sure, but something that should have been clarified.And yet - I think that given the circumstances this is the best deal we have.
Anyway, that's just my opinion - I could be wrong 😎
Good points. To be clear, Evan Schwartz is not a lawyer - he's way too smart. 😉 He holds an MBA from Sloan.
Agreed on the local subcontractor language. Also agree that the Senators came off as uneducated or - even worse - unprepared. They embarrass me at times. Militant-Young appears to have a passion for tourism. Starting a business would be a more productive use of her time. Novelle is simply in over his head. Same is true for Blyden, Kenny G, etc.
The duration was a problem for those who voted against based on what I briefly looked at yesterday. Regardless, the senators had no negotiating authority so the hearing was just an opportunity for them to act important.
What's next for economic opportunity, or are they going to shadow ArcLight and focus only on what they're doing (or not doing)? They need to focus on filling the pipeline.
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