09 September 2011

Statia oil storage expansion would change face of island


 Daily Herald, Sint Maarten


NuStar expansion plan will change Statia’s face forever

Page16B095~ Building permit not yet submitted, but opposition is growing ~

By Suzanne Koelega

ST. EUSTATIUS--The NuStar oil terminal expansion plan in St. Eustatius is a clear example of a clash between business interests and development, and nature and cultural and archaeological heritage on a limited amount of land. On a small island like St. Eustatius with a fragile economy, the impact of a multimillion-dollar investment is even bigger.
NuStar Energy L.P., owner of 90 terminal and storage facilities around the world, wants to expand, invest and make a profit, as all businesses do. Statia Terminals hasn’t applied for a building permit yet, but is seriously looking at possibilities to construct 31 storage tanks of different sizes in the Cul de Sac area, locally known as The Farm, in addition to a new jetty.

There is a demand for more storage capacity in St. Eustatius, said NuStar’s Vice-president International Terminal Operations David Smith and Mike McDonald, General Manager of NuStar’s facility in St. Eustatius.
“St. Eustatius and NuStar are popular for bunkering,” they said. Some 800 vessels come to St. Eustatius per year to bunker and obtain fuel. These vessels stay out at sea. More than 100 ships come to the jetty annually to discharge and take on crude oil and petroleum products.

An expansion of 31 tanks would mean an increase of more than 50 per cent of the terminal’s current capacity of 67 storage tanks that can hold more than 13 million barrels, with another five tanks being built at this time. 
 The proposed work would take up some 278,000 square metres of space.

Monuments Director Walter Hellebrand and other opponents of an oil terminal in The Farm area find this is quite a lot for the proposed location which is in the only usable seven square kilometres of the island where people live, work and enjoy recreation.

International negotiations

The fact is that international oil companies are interested in renting the new storage tanks. NuStar has been negotiating lease agreements with these customers, preferably long term, said McDonald. Negotiations have not been concluded as yet. Smith wouldn’t give details on the negotiations, but said at least one “major international publically traded company” was interested. But, Smith added, “We have not signed any contract yet.”

The contracts with consumers are cardinal in deciding whether to go forward with the US $477 million project and to apply for a building permit. “NuStar is not into speculation construction where we build tanks and then wait for customers,” said McDonald.

“We are not going to invest half a billion into something that makes no sense. If there were no interest, we would not build,” said Smith when asked about concerns about the risks of St. Eustatius being stuck in the future with some 30 unused tanks.

“NuStar is here to stay. We won’t go away just like that. Business is good. We are responsible owners with an excellent track record,” added McDonald.

Whether the project goes ahead depends on several other factors, the approval by the local government on a building permit request being a key aspect. Several Dutch Government ministries will be involved in the decision-taking process, providing advice and support, but the ultimate decision is in the hands of Statia’s Government.

Negative consequences

Local heritage foundations are squarely against the construction of the tanks in the proposed area. The St. Eustatius Awareness and Development (SEAD) movement, Statia Roots Foundation (SRF) and Statia Monuments Foundation said there would be negative environmental, safety and historical consequences.
Statians are becoming increasingly concerned about what the expansion at The Farm would mean for their quality of life. There are fears that the people would be adversely affected, as well as the island’s natural and aesthetic beauty. Residents living close to the proposed building site are concerned about their health.
People are worried about the risks of so many tanks close to their homes, schools, workplace, sports places. Not to mention that the island’s vital facilities like the airport, hospital, harbour and government are located not far away.

Stringent requirements

NuStar said people should not worry about risks, as the facility would be built according to the very stringent Dutch PGS 29 building code which dictates that the tanks have to be at a certain distance from each other. The company said there would be no risk of a large fire, because safety measures would prevent this from happening.

Each tank will be surrounded by a dike with an area that can contain 110 per cent of the contents of the tank to prevent spilling. A vapour recovery system will be included to control and recover possible vapours, explained McDonald. He stressed that the terminal was not a refinery.

As for the visual aspect, the tanks will be camouflaged as much as possible using natural colours and by planting vegetation. The plan was adapted, in accordance with the wishes of the Island Government, to accommodate the runway safety area. The tanks will now be moved more into the hill in the back, for which excavation will be necessary.

SEAD and SRF are making citizens more aware of their rights and this is working, because more and more Statians are becoming vocal on the issue. The court injunction initiated by the Monuments Foundation to prevent the project attracted the people’s attention. The foundation may have lost the injunction, but Judge indicated that areas of archaeological value might not be destroyed.

Mobilising people

“The result is that Benners Plantation will remain intact. But more important, we managed to mobilise many people. It was a signal to the people that they have a right to object when they don’t agree with something,” said Hellebrand.

The Monuments Foundation’s appeal against a possible oil terminal in The Farm area still has to be dealt with in court.The organisations certainly will make use of other legal procedures against a change of the spatial development plan to designate the area in question as an industrial area.
SEAD, SRF and the Monuments Foundation sought help from the United Nations Environmental, Cultural and Scientific Organisation (UNESCO) in July. ( OTR Note - UNESCO is the acronym for the U.N. Educational, Scientific and Cultural Organization).

SEAD coordinator Kenneth Cuvalay said the organisation had started a door-to-door campaign and an online petition
(www.change.org/petitions/st-eustatius-government-nustar-energy-lp-stop-nustar-oil-terminal-expansion-in-the-farm-area in July against the construction of a second terminal at The Farm. So far the petition has yielded more than 500 signatures. SEAD will be launching the Weblog
http://no-to-nustar-expansion-steustatius.blogspot.com soon.Then there is the aspect of tourism, which should become Statia’s second economic pillar after the oil terminal business.

“No tourist wants to come to an island that is crowded with oil tanks,” said Hellebrand. He believes all chances for St. Eustatius to profile and develop itself as an eco-tourism destination will go down the drain if the plans go ahead. The second terminal also would eliminate chances of having The Farm area placed on UNESCO’s World Heritage List.

Archaeological heritage

It is a fact that The Farm area contains cultural and archaeological heritage. There are the ruins of Benners Plantation and its private early 18th century cemetery that contains four of the five oldest graves on the island. There are several slave burial sites in the area of which a large part has been documented in archaeological research.

The St. Eustatius Archaeological Research Centre SECAR uncovered three possible slave cemeteries, two plantation cemeteries, two possible slave villages and three dry laid stone walls during research earlier this year.

Buried at the Benners Cemetery are former Governor of Dutch St. Maarten Johannes Gibbes, former Governor of St. Eustatius Johannes Heyliger, and Abraham Ravené, grandfather of the commanding officer of Fort Oranje at the time of the First Salute in 1776, among others. Plantation owners Johannes and Lucas Benner also are buried there.

Moving graves

NuStar said it would respect the heritage on its property, but Smith couldn’t exclude a relocation of the graves. He said this would depend on the final drawings of the containment area. Smith and McDonald said it would be better to move the graves to another location, also to make them more accessible to the people.
However, one must have very urgent reasons to relocate graves and other archaeological artefacts buried in the ground. The Convention of Malta, signed by the members of the Council of Europe in 1992, prescribes that preferably archaeological remains should remain at the original site, as the soil is the best preservation. The convention in question applies to St. Eustatius as part of the Dutch Constellation.

An archaeological monuments law prescribes archaeological research prior to disturbing the soil. Leiden University carried out this research, in cooperation with SECAR. Trenches were dug and the area cleared of bush to determine the location of possible archaeological remains. The archaeological research report will be published shortly.

NuStar has decided to adapt the construction plan to spare Benners Plantation by leaving out one large storage tank. The large trees, mostly tamarind trees, will be relocated with the assistance of St. Eustatius Nature Parks Foundation Stenapa and not torn down, promised Smith. 

Still, an oil terminal on the verge of an important heritage site is still highly undesirable, according to Hellebrand. Three fortifications on Signal Hill, home to the protected Morning Glory flower, Battery Royal, Battery Jussac and Fort Panga, no longer would be accessible, as the entrance to these sites goes through the proposed terminal.

There is currently a hiking trail through the area, said Hellebrand. Battery Tumbledown Dick, built around 1700 and one of the oldest on the island, located on property of the current terminal, is already affected by operations.


Hellebrand’s fears that Statia could lose its potential as an eco-tourism destination were confirmed by a Dutch tour operator specialised in active eco-tourism travel that plans to start a special walking programme in the Windward Islands in 2012.

The Director of SNP Natuurreizen warned on SEAD’s online petition site that the proposed expansion would “damage the experience of our clients to be walking on an island of special natural beauty and could result in excluding St Eustatius from our scheduled programme.”

The heritage foundations are of the opinion that the second terminal could also be built in another location than The Farm. “We think there is space at the current terminal. There are possibilities with a land swap,” said Hellebrand, pointing at the fact that the land belongs to other owners than NuStar.

But Smith and McDonald said there was no more space to expand at the existing terminal. The land in the back, called Bergje, is not a possibility because it is all mountain range. It would require filling the ravine between two hills. The foundation simply would not be solid enough. Rock fall and stability would be problems.

Complicated hydraulics

Engineering-wise it is also not possible because of hydraulics, said Smith. “We have looked everywhere for available land,” he said. Building the facility on the Atlantic side is not an option either, because the sea conditions are too rough at the jetty. It also would be much more expensive and would require constructing lots of pipelines across the island, which would make it more dangerous.

Moving the current control centre located away from the existing tanks to facilitate the construction of new tanks is not possible due to safety regulations. The control tower needs a view of the tanks, yet it must be at a great distance from the tanks and out of the blast range, explained Smith.

The local heritage foundations have an ally in Member of the Second Chamber Ronald van Raak of the Socialist Party (SP) who has been highly critical of the proposed expansion. He has posed questions to the Dutch Government on several occasions.


According to Van Raak, a referendum should be organised to ensure that the Statia people have the last say. “It is a project with far-reaching consequences. It concerns a lot of money and oil on a small island with fragile and beautiful nature and heritage. This expansion will change Statia’s face fundamentally and for always. We have to give the people a voice in this,” he said.

Van Raak thinks the local government is no match for a large company like NuStar that has much more power and money. That is one of the reasons The Hague should be actively involved in the decision-taking process. He said Minister Piet Hein Donner had a role to play. “It can’t be that the Netherlands isn’t involved in the granting of a permit that has to comply with Dutch legislation.”

The Statia terminal is highly important to NuStar. The 67 current tanks at Boven represent some 25 per cent of all 55 NuStar terminals in the United States, according to the company’s 2010 Annual Report.
Why St. Eustatius? There are several reasons. The island has a very strategic location, because it is close to North and South America as well as Africa, but the fiscal climate is also attractive.

NuStar, which bought the terminal in 2005, has an arrangement with Statia’s Government until 2014 where it only pays NAf. 1 million (some US $555,000) profit tax per year. Combined with the anchorage fees, other duties and wage tax, NuStar paid US $5.2 million in 2008, said Smith. He added that he was aware of the fact that the company would have to pay more taxes in the future. “We will pay what we have to, as long as it is clear and fair.”

Not naïve 

NuStar is well aware of the concerns about constructing a new terminal. “I am not naïve to think that everyone will agree. It is not that we don’t care. Otherwise we would not have had town hall meetings, launched a Website or held many talks and answered the many questions,” said Smith. “All stakeholders have to agree: the people, government, elected officials.” He strongly believes that economically the project is a win for both NuStar and St. Eustatius.