January 26, 2011
700+ Million Reasons to Comply with the Clean Air Act
The U.S. Environmental Protection Agency today announced a settlement with Hovensa LLC to resolve public health concerns and Clean Air Act violations at Hovensa's St. Croix, U.S. Virgin Islands, petroleum refinery. The settlement provides for a $5.375 million civil fine and an agreement to spend more than $700 million in "new pollution controls."
Hovensa LLC is jointly owned by Hess Corporation and Petróleos de Venezuela, S.A.. As a publicly traded company, I can't help but wonder if Hess (ticker: HES) might want to exercise a little more oversight of its joint venture LLC. After all, before this settlement was announced, Hovensa, at least on paper, was already a loser. According to Hess's most recent 10-Q, Hovensa LLC lost $83 million for the three months ended September 30, 2010, and $174 million for the nine months ended the same date.
Then again, that may have all been by design. Regardless, I suspect this EPA thing would not have been part of any such plan.