The last of 2 articles about the Isla Refinery – Read Part 1

Today many old conventional energy technologies are being phased out around the world in order to capitalize on other more efficient and modern energy technologies, such as solar and wind power. Although, much of the world still relies on oil to maintain economies and remain competitive in the international market, the global warming issue has portrayed conventional energy technology as a hazard to public health and the environment, and rightfully so. Oil has been so important in the last century for the industrial sector but over time it has been depleted and could be completely consumed in the next 40 to 50 years. What people around the world are beginning to understand is the instability of relying on oil for energy production and the conflicts that have occurred and are still occurring as a result. It is also a fact that the public and the environment have suffered tremendously as a result of energy production from oil, as well as coal.

In Curaçao, it has been discovered for some time now that the downwind pollution from the ISLA refinery has negatively affected the public and the environment. Aside from the pungent smell, the refinery emits large amounts of greenhouse gases such as sulfur dioxide (SO2), nitrous oxide (NO) and carbon dioxide (CO2), which are all extremely damaging to the environment and public health. After 2000 the people of Curacao began protesting against the state of the refinery and as a result a 100 meter smoke stack was built to try to detract the emissions from the communities downwind of the refinery. However, this did not fix the problem. A few years ago schools in these communities were closed down due to air pollution from the refinery (Currasow, 2007).

In 2006 an economic study was done by the public enterprise Refineria di Korsou (RdK) which concluded that the damage to public health by the emission of greenhouse gases, particularly sulfur dioxide, from the ISLA refinery in the current situation was equivalent to approximately 28 million guilders per year. Based on a similar study done in 2001, those affected paid an average amount of 250 guilders for each visit to the hospital. This cost was tremendously increased for more severe cases such as asthma attacks and lung diseases (St. Maarten Private Eye, August 2006). The real problem is that the refinery is almost 100 years old which means that much of the technology does not meet the standards for productivity and environmental safety. In other words, the refinery does not produce as much energy per barrel of oil as it used to but emits more hazardous greenhouse gases than it did during its peak production period and consumes more fuel in the process. The refinery is not properly maintained by PDVSA as it used to be by Royal Dutch Shell so this explains the many accidents that have occurred in the last 3 decades, which in turn has caused more damage to the environment and public health.

The owner of the refinery, the government, and the renter, PDVSA, have taken absolutely no responsibility and accountability for any damage the refinery has caused to the public and the environment. In many parts of the world companies and governments that manage the operations of facilities that have an impact on the public and the environment must take responsibility for their actions through laws and regulations and must pay to clean up their mess. By refusing to take responsibility for the damage being caused, the government of Curaçao is sending the wrong message to the public that it is not important to take responsibility for any actions such as littering, wasting electricity and water, being unhealthy, gambling, and abusing animals. There needs to be accountability, integrity and transparency in our government if there is to be positive change in Curaçao. There are many simple things that Curaçaoans can do to live a safe and healthy lifestyle but it is defeatist when the people’s government cannot even show the people that it cares.

The aforementioned 2006 RdK study also concluded that the ISLA refinery must consider several options in order to reduce its impact on public health and the environment, increase employment and increase annual revenue. At this rate, the refinery is not commercially and financially profitable. The first option would be to continue operation until 2019 with a minimum investment of $303 million in the installations in order to reduce emission levels, however there would still be a slightly less impact on public health and the environment. The second option would be to invest $1.1 billion to reduce the use of fuel and lower sulfur levels but due to such a large investment the refinery would have to continue operation until 2032! This may increase employment for the short term but again there would be a slightly less impact to the environment. The third and final option would be to make a $1.3 billion investment for a gasification unit which would produce cleaner gas and partly replace the steam and electricity supply in the refinery. This would mean more employment for the short term, more revenue from contracts, and a one-third decrease in emissions of particulate matter. This would be the best option but would require the most investment. The study also mentioned that another attractive option would be to sell the refinery to a third party for more than what the current renter, PDVSA, has offered which is a very low 850 million guilders (St. Maarten Private Eye, August 2006). However, it is highly unlikely that another company would buy the refinery since it is very old and would require an up-front investment of billions of dollars to meet environmental standards and operate efficiently. In the end, the study was not fully released to the public because the government and the refinery director thought it would expose too much information about the current situation of the ISLA (Currasow, 2007). This very evidently shows the lack of integrity, transparency, and accountability within the government of Curaçao.

In 2009 a court in Curaçao ruled in favour of 26 people and 2 other parties that brought a civil case against the ISLA refinery claiming that they and their community had experienced serious health problems related to particulate matter and sulfur dioxide emissions from the refinery. The court has ordered PDVSA to pay $3 million if they fail to remain under the maximum yearly sulfur dioxide emissions level. Further violations will cost ISLA $300,000 per day. In the recent past a court in Curaçao threatened to close the refinery if it could not meet emissions standards after the release of a study which determined that an estimated 18 people died prematurely every year from contaminant exposure (Reuters, June 2009).

The wisest decision that the government of Curaçao and the ISLA refinery can make is to terminate the contract with PDVSA and put an end to the devastation that the ancient ISLA refinery is causing to the people of Curaçao. With only 1500 workers employed at the refinery, it is no longer of any benefit to Curaçao. It is only a detriment. Another favourable option would be for the government of Curaçao to devise a phase out plan for the decommissioning and clean up of the refinery which can be implemented in 2019. This can be a valuable aspect at the political level, especially during elections in Curaçao because this is what the people of Curaçao want. The RdK study determined that it would cost $180 million over 5 to 10 years to decommission the refinery and another $130 million to prepare the land for industrial use (St. Maarten Private Eye, August 2006). This seems like a much more attractive investment, not to mention a lot less than the investments required for options mentioned in the above study, since it would negate any environmental and health damage and free up a large amount of land for more profitable ventures. The tourism industry in Curaçao is developing at a steady pace and development on the island is continuous. The attractive corporate tax rate for foreign companies has also helped to bring investment and capital to the island. In addition, Curaçao has so much to offer in the area of renewable energy generation (wind and solar technology) as it is characterized by having constant trade winds and many hours of sunlight. Instead of being known for having one of the largest and oldest oil refineries in the Caribbean, which will likely detract tourists from visiting the island, Curaçao can soon be known for being a leader in renewable energy generation. That is if the government will allow it.

Photo impressions by Bea Moedt

References:
Caribseek Curacao. 2005. Curaçao History
Curassow. 2007. The ISLA Refinery
LatinFinance. July 2007. Stepping Out
Reuters. June 2009. Curaçao Rules Against PDVSA Refinery Emissions
St. Maarten Private Eye. August 2006. Today – Curaçao Isla Refinery Health Costs 28 Million Florins a Year
Wikipedia. 2010. Curaçao
MCB Bank Annual Report 2006 pp. 18

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