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Letter to Senator Malone

March 2, 2010

Senator Shawn Michael Malone
28th Legislature of the Virgin Islands
P.O. Box 1690
St. Thomas, U.S. Virgin Islands 00804

Dear Senator Malone:

This is an open letter.  It was great to talk with you on Saturday at the Emerald Beach Hotel. In regard to our conversation, I am writing to urge you to take a position in line with the promises made by our local and federal governments to other nations, and to communicate with the Senate before Monday’s scheduled vote on Alpine’s leases.

The United States, Iceland and New Zealand have a signed agreement stating that the U.S. Virgin Islands has been chosen to be a pilot project for renewable energy, citing the examples of geothermal, wind and solar energy. Anthony Babauta, Assistant Secretary of the Interior discussed this Energy Development in Island Nations project when he spoke with the VI Legislature on November 19, 2009. Governor deJongh committed the USVI to this project, saying that it gives us the opportunity “to move forward on our clean energy strategy”.  Thus, both our Territory and the United States government have made the firm commitment to the U.S. Virgin Islands utilizing renewable energy.

Alpine’s proposed petroleum coke/oil/garbage power plants would use 150 tons a day of  pelletized refuse derived fuel and 375 to 475 tons a day of petroleum coke, which is the waste from refining oil, a very dirty energy source, hazardous to human health, high in CO2 emissions, terrible environmentally, and not renewable energy. In addition to the petroleum coke, Alpine plans to burn up to 4,600 hours of diesel oil per year, or 12.6 hours of oil every day, which is not renewable energy. Finally, unestimated are the many thousands of gallons of fuel oil which would be burned by all of the ocean-going barges, because Alpine’s system is dependent upon 300 foot barges constantly hauling in petroleum coke, limestone, diesel fuel, ammonia, activated carbon and hauling away 375 thousand tons of fly ash, the waste left over from burning the petroleum coke.

If the VI Senate approves the Alpine Project, committing the VI to burn petroleum coke, oil and garbage for 20 years+, the VI Senate is knowingly and willfully violating the agreement made between the VI, the United States, Iceland and New Zealand. Thus, each Senator who votes for Alpine is acting against the agreement made by President Obama with the countries of Iceland and New Zealand, and against the support offered by the U.S. Departments of Energy and the Interior.

By making a stand for the environment, international relations and federal funding, your  Committee on Planning and Environmental Protection will be viewed as having the voice of reason, logic, and international diplomacy. Please review the below analysis with Virgin Islands Legislature’s Deputy Chief  Legal Counsel Tharpes and convey to the Senate why and how the Alpine Project must be stopped now, so that we may together focus on renewable energy solutions to our energy issues.

The Senate Committee on Planning and Environmental Protection has jurisdiction over Alpine and all matters pertaining to it

The wording of Rule 522 of the Twenty-Eighth Legislature of the Virgin Islands is clear and unequivocal:

The jurisdiction of the Committee on Planning and Environmental Protection encompasses and the Committee shall consider all matters pertaining and related to land use and development, building codes, community planning and development, zoning and city planning, shorelines, beaches, territorial parks, libraries, museums, fish and wildlife,     natural resources and environmental protection, Coastal Zone permits and leases, landfill and solid waste disposal systems and their impact on the environment and all matters pertaining to the environment.

As you are the Chairman of the committee with legal jurisdiction over this matter,  it is most  appropriate pursuant to Rule 501 (a) that your committee “investigate, study and evaluate” the Alpine Project.

Alpine’s is an oil driven project, and thus contrary to the very intent of WAPA’s RFP

WAPA issued its RFP “to reduce the costs of providing electricity to its customers and to decrease WAPA’s dependence  on volatile oil prices…”.  The Alpine project would use 150 tons a day of  pelletized refuse derived fuel and 375 to 475 tons a day of petroleum coke, which is the waste from refining oil, thus it is an oil product and its sale is tied to the oil industry.

However, petroleum coke prices are more volatile than oil prices. Between 1998 and 2008 the cost of petroleum coke rose by a factor of 18 fold on the Mediterranean Market, while crude oil prices increased only by a factor of six fold. Hovensa already sells all the petroleum coke it generates, in a competitive market, and WAPA would be a new customer, increasing the market need, which could drive the cost up.  Under these agreements, WAPA, and thus we ratepayers, would be committed to buying the petroleum coke, no matter how high its cost, for many years.

In addition to the petroleum coke, Alpine plans to burn up to 4,600 hours of diesel oil per year, or 12.6 hours of every day. This 4,600 hours of diesel is also an oil product.

Finally, one should consider the fuel oil being burned by the ocean-going barges, because Alpine’s system is dependent on that fuel as well. Alpine states that the petroleum coke storage building is 300 feet by 130 feet by 30 feet high, which is sized to hold the capacity of two barges. Thus, the barges involved are very large, and burn great quantities of fuel. The petroleum coke would be constantly barged 40 miles from St. Croix, and the limestone, diesel fuel, ammonia, and activated carbon would be barged in from some undisclosed place.

Apparently, the 107 thousand tons of solid waste and the 370 thousand tons of fly ash created per year would be barged out from Alpine to some other undisclosed location, which process and liability the Alpine plan does not even address.  This means that Alpine requires many barges to burn hundreds of thousands of gallons of diesel oil, hauling these barge loads of product back and forth through the ocean and our coastal waters, in order for the project to work.

Alpine lacks qualifications, experience, and commercially proven technology, yet won the bid

There are contentions that the bidding process unfairly favored Alpine, that Alpine did not meet the requirements of the RFP, and thus should not have won the bid.  Dr. Eddie Donoghue submitted many documents addressing this issue, along with the clip of a radio interview of Noel Loftus, a member of the Board of Directors of WAPA, who purportedly admits WAPA began negotiations with Alpine before the RFP was even sent out to prospective bidders.

Alpine was formed in 2007, the year the WAPA RFP was issued, and Alpine did not even have a license to do business in the VI until July 8, 2009. Being newly formed, Alpine has no experience, not even the 3 years required by the RFP, and  the principals Beach and Hurd do not have a successful track record in their former companies for constructing and operating comparable facilities.

Further, the RFP requires that the technology proposed is commercially proven. Instead, Alpine’s proposed process has never been tried anywhere in the world. Nevertheless, WAPA chose Alpine over the other bidders, and Alpine signed an agreement with Property and Procurement.

Property and Procurement did not have the Authority to enter into any Lease Agreements concerning docks, or binding the VI Govt. to pay future environmental cleanup costs.

As the Virgin Islands Legislature’s Deputy Chief  Legal Counsel Tharpes stated in her memorandum dated November 3, 2009, in regard to the St. Thomas facility, “Property and Procurement lacks authority to lease any premises for a dock”, citing 12 VI Code Section 911, and goes on to say that “the dock constitutes consideration for the lease.”

The large dock is integral to the Alpine operation, as the plan is to load barges of petroleum coke from Hovensa in St. Croix, drive them to St. Thomas, and into Stalley Bay, then, offload these tons of materials onto the dock, along with barge loads of other materials, such as limestone, diesel fuel, ammonia, and activated carbon. Apparently the dock would also be used to fill barges with the 107 thousand tons of solid waste and the 370 thousand tons of fly ash created per year and barged out to some undisclosed location.

Please review Alpine’s plans and the extensive dock and conveyor system.   Since the dock is important to the project, and Property and Procurement did not have the ability to authorize the Alpine dock, the contract is voidable.

Deputy Chief  Legal Counsel Tharpes also cited Title 33 VI Code Section 3101as another law rendering a key element of the Alpine contract unenforceable. Property and Procurement cannot contract with Alpine, under Section 11.05, for the VI Government to pay some undetermined allotment of future hazardous clean-up costs, which could run in the tens of millions, in advance of appropriations made for that purpose.

The Public Service Commission acted in violation of the Sunshine Laws and Act 7075

According to the Appeal filed by the VI Ratepayers:

The PSC did not give the public adequate notice of its hearings, nor access to documents and transcripts. The PSC refused to allow ratepayers the opportunity of presenting expert testimony showing that the Alpine agreements would increase, not decrease, electric rates. The PSC refused to order a rate investigation or hold a formal hearing prior to issuing its order affecting the rates.

The PSC failed to hold open to the public and to provide notice of all of the PSC’s (or any of its agent’s) meetings with WAPA and / or Alpine or the agents of either in violation of the Sunshine Act and Public Records Act.

The PSC only had authority to set the rate, not ratify the Alpine contract. Further, the PSC acted in direct contravention of  Act 7075, passed in 2009, which states in pertinent part:

“(a) The peak demanded generating capacity of the Virgin Islands Water and Power Authority
must be derived from renewable energy technologies as defined in title 30 V.I.C., section 46,
subsection (m), and as follows: 20% by January 1,2015; 25% by January 1, 2020; and 30% by
January I, 2025; and the percentage thereafter must increase until a majority of the
generating capacity of the Virgin Islands Water and Power Authority is derived from
renewable or alternative energy technologies.” Emphasis added.

WAPA must first develop “renewable” energy solutions, defined in Section 1101 as solar, wind, biomass, landfill gas, hydroelectric, ocean, including tidal, wave current, and Ocean Thermal Energy Conversion (OTEC), or geothermal, not oil and petroleum coke.

Should the Federal District Court agree with the ratepayers, after all filings and hearings, the Court will remand the matter to the PSC for further fact finding and investigation. This appeals process could take months, if not years.  Your committee’s investigation and memorandum explaining the determination to end the Alpine agreements could be accomplished in weeks.

The health of Virgin Islanders is paramount

A significant cost of this project is the effect of Alpine’s emissions on the health of the people who live here, particularly those who live close to the proposed facilities. The health threats such as cancer, asthma and other respiratory diseases are real, and well-documented.

Some of the carbon and particulate matter in Alpine’s emissions will be in the form of polycyclic aromatic hydrocarbons, whose toxicity is measured in parts per billion. These toxic substances are too dangerous to human health and human life.  If a mistake is made, or there is negligence at a power plant,  the result could be fatal to many, as in Tonawanda, New York, where people are dying of cancer and the benzene emission levels at a facility were found to be 75 times the recommended guidelines. Bolongo and Bovoni Homeowners Associations passionately object to the Alpine projects, as do thousands of others who live here.

Stalley Bay is pristine and should not have a large dock built to accommodate huge barges

You may recall that just a few months ago WICO planned to dredge St. Thomas Harbor and dump the dredge spoils into Lindbergh Bay. WICO prepared an Alternative Site Analysis for Stalley Bay at that time, and its argument, before Coastal Zone Management and the U.S. Army Corps of Engineers, was that Stalley Bay was pristine, and should remain untouched, with lush seagrass beds, the food source of Green Turtles, along with the Green Turtles, Hawksbill Turtles, Elkhorn Coral and its Critical Habitat, all of whom are protected under the Endangered Species Act.

Pursuant to the 4(D) Rule of the ESA, the definition of “take” includes that no one may damage the species’ habitat or discharge any pollutant or contaminant that harms the species. In this case, there would be intake and outflow pipes from Alpine into our coastal waters. The barges would be going to Stalley Bay all the time, for 20+years, with powerful engines churning the water.  Elkhorn Coral require relatively clear, well-circulated water and are almost entirely dependent upon sunlight for nourishment.
It is highly likely that NOAA’s Chapter 7 consultation would find that the elkhorn coral, and its critical habitat would be negatively impacted by these activities. The construction of the Stalley Bay dock itself would also negatively impact on the elkhorn coral and its critical habitat.

Further, by the time Alpine were to apply to the U. S. Army Corps of Engineers for the license to build the dock, there may be other local corals in Stalley Bay on the Endangered Species List in addition to the Elkhorn Coral already identified.  At least 8 of the 83 corals mentioned below are local, and may well be located in Stalley Bay.

We must reduce, not heighten, the present level of CO2 or the coral will die

The Alpine Project calls for heightened CO2 emissions, at a time when the world leaders are meeting and trying to lower them. The EPA plans to regulate CO2  emissions starting in April of this year. Not only will the heightened CO2 affect the atmosphere, it will kill our coral.

When I worked on the Lindbergh Bay matter, you may recall that I networked and established a watchdog group consisting of local and national coral experts, NOAA bureau chiefs, and Miyoko Sakashita, Esq., Oceans Director for The Center for Biological Diversity, the organization responsible for getting Elkhorn and Staghorn Coral, and their Critical Habitat, placed on the Endangered Species List.

On October 12, 2009, The Center for Biological Diversity “filed a formal petition seeking to protect 83 imperiled coral species under the Endangered Species Act. These corals, all of which occur in U.S. waters ranging from Florida and Hawaii to U.S. territories in the Caribbean and Pacific, face a growing threat of extinction due to rising ocean temperatures caused by global warming, and the related threat of ocean acidification.

Not only is greenhouse gas pollution causing corals to bleach and die, but it also makes it difficult for corals to grow and rebuild their colonies. Ocean acidification, caused by the ocean’s absorption of carbon dioxide, is already impairing the ability of corals to build their protective skeletons. At CO2 levels of 450 ppm, scientists predict that reef erosion will eclipse the ability of corals to grow.  Moreover, ocean acidification and global warming render corals even more susceptible to other threats that have led to the present degraded state of our reefs, including destructive fishing, agriculture runoff, storms, sea-level rise, pollution, abrasion, predation, and disease.

Leading coral biologist Charles Veron warned in a recent scientific paper that at current levels of CO2 in the atmosphere (387 ppm) most of the world’s coral reefs are committed to an irreversible decline. Other scientists have warned that CO2 concentrations must be reduced to levels below 350 ppm to protect corals and avoid mass extinctions on land and sea.

‘The coral conservation crisis is already so severe that preventing the extinction of coral reefs and the marine life that depends upon them is an enormous undertaking. The Endangered Species Act has an important role to play in that effort,’ added Sakashita. ‘But without rapid CO2 reductions, the fate of the world’s coral reefs will be sealed.’

NOAA would contest Alpine to protect the coral

NOAA is spending millions on coral projects, trying to help grow new coral colonies and save the remaining coral we have from extinction. NOAA is doing its utmost to save coral. Why would NOAA agree to increase our CO2 emissions, when that kills coral? The 250-300+ foot barges alone, going back and forth to that dock in Stalley Bay, for over 20 years, churning the water with their powerful engines, would certainly kill the Elkhorn Coral there, which need clean, clear water and sunlight to survive.

The Division of Fish and Wildlife would contest Alpine to protect the VI Tree Boa and Prickly Ash

The Virgin Islands Tree Boa is the only snake native to the Virgin Islands. According to the VI DPNR and the Division of Fish and Wildlife, this rare and beautiful snake has the highest probability of being found on the eastern end of St. Thomas, therefore in or near the area where the plants would be built. This snake is protected by local and federal Endangered Species Acts, and if this project destroyed the Virgin Island Tree Boa’s habitat on the Eastern end of St. Thomas, that might well lead to its extinction in the Virgin Islands. For this very reason, the Division of Fish and Wildlife has reason to object strongly to the Alpine Project.

St. Thomas Prickly Ash is a rare plant protected by the Endangered Species Act. In 1988 there were just 300 plants total, and it was feared then that the population was on the decline, due to land development and thus elimination of the habitat of St. Thomas Prickly Ash.  It is found in just a few areas on St. Thomas, St. John and Puerto Rico, including Bolongo Hill. Therefore, there may be St. Thomas Prickly Ash affected by the Alpine Project. On February 20, 2009 US Fish and Wildlife commenced a 5 year review of the rare plant, and perhaps some data is available to your Committee now.
Public Interest

As the elected representatives of the People, the Virgin Islands Legislature takes the opinions of its citizens very seriously. There has been an outpouring of Letters to the Editor against the Alpine Project, many citizen groups have formed, many meetings have been held, and people have testified before the Senate, objecting to the Alpine Project. The VI Ratepayers Association has filed an Appeal in Federal District Court, an international media campaign is being launched, and surely your committee wants to do the right thing, stop the Alpine deal now, and form a coalition to find the answers.

If your committee would review the materials submitted on January 13th , the bidding documents, contracts and all the other evidence, in consultation with Legal Counsel to the Senate,  you will have clear legal authority to void the Alpine contracts.

If your investigation shows that the bidding process and choice of Alpine was improper, then you can also demand our $5,000,000 Five Million dollars back from the Advisors, who were not looking out for the best interests of our islands, our people, or our environment.


As the Chairman of the Committee on Planning and Environmental Protection, this is a golden opportunity for you to do the right thing in the eyes of your people, the federal agencies, and our President, who are all committed to lowering CO2 emissions and American reliance on fossil fuels.

I suggest that the most efficient and effective way to address our waste and energy issues would be to work together, in a coalition comprised of concerned citizens, environmental groups, and local and federal governmental agencies now, together, at the outset, with an interactive website offering materials and facts open and available to everyone.  We can make this a model Territorial and  Caribbean renewable and alternative energy project, perhaps utilizing a combination of solar, wind, geothermal, ocean thermal, or other energy sources.

Our waste and energy issues could be the focus of a University challenge, where professors would bring their collective genius to bear on the problem, and their students would benefit from the hands- on experience of working on the project. Students would be able to work on the project and receive credit, and perhaps UVI would be able to host the collaborative effort.

If we do this together, it will streamline the entire process, because there will not be a unilateral decision made, then stiff opposition by citizens and federal agencies. Instead, we will all be working together, from the outset, to find the solution to our waste and energy problems.
If we have transparency, a great website, a willingness on everyone’s part to collaborate and informed people communicating effectively, we can achieve a lot, very quickly.  Much can be accomplished via the website, email and telephone. Thank you for your consideration in regard to this matter. I look forward to hearing from you.

Sincerely yours,

Susan K. Wolterbeek

cc: Judith Enck, EPA Administrator, Region II
Anthony Babauta, Assistant Secretary of the Interior
Adam Warren, National Renewable Energy Laboratory
Donna C. Christensen, VI Delegate to Congress
Steve Meyers, NOAA
Miyoko Sakashita, Esq. Center for Biological Diversity
J. Lowe Davis, Editor in Chief, VI Daily News

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