Via info@statianews.com a lot of discussion about the expansion of Nustar on St. Eustatius went on.

In this document update 57 and further, where the discussion about a trustfund started. In this document the discussion about the idea of setting up a trustfund for Statia with the help of Nustar. The initial idea came from the former local government of Statia, they wanted to set up a trustfund for the restoration of the area may Nustar leave. Mr. Tom Morgan thinks bigger and thinks a trustfund can be used for more than that purpose. Mr. Morgan is a part time resident of Statia, a US citizen, who is well known for his financial advice on TV and Radio in the US (check: money talks) This discussion starts of with a letter Mr. Kenneth Cuvalay (head of SEAD) wrote. Mr. Koos Sneek joins the discussion, he is island council member for the DP, head of the chamber of commerce of Statia and Saba and former head of STEBA, the St. Eustatius Business Association. Bernard Schmidt also joins the discussion, he is co host of Talking Blues a discussion program on local television. George Works, retired engineer from the US who lives on the island, Nustars vice president for international operations David Smith and Statia citizen John Walsh also join.

From: SEAD NETWORK Sent: Thursday, September 01, 2011 12:19 AM

NuStars True Color

If you read the text on NuStars website and the contributions of its representative in Statia News, you would almost think that all opponents of the expansion are out of their mind. NuStar just wants to make Statia a better place, give people jobs, provide for all foundations and bring prosperity and glory to the island. If youre one of those people, please take a moment to grasp the following. NuStars true goal: profit and growth Lets look at some facts: NuStar is the second largest oil terminal operator in the US, and the fourth largest in the world; NuStar is a listed company on the New York Stock Exchange and recently entered the Fortune 500 list (annual ranking of Americas largest corporations); the figures that got them there: revenues 4,403.1 million, profits 239 million over the year 2010. Source: fortune magazine The ultimate goal of NuStar, as every business, is to make money. To continue to make money, businesses need to grow and expand. So does NuStar. So it cant come as a surprise, to read on NuStars website that part of its mission is: aggressively pursuing growth opportunities, both domestically and internationally. Source: nustar website Following more facts: NuStar holds 65 terminal and storage facilities around the world. Measured by storage capacity, Statia terminal is by far the largest of all (13 million barrels). Statias storage capacity alone is just as big as 25% of all 55 NuStars terminals in the United States (50.6 barrels).

Source: NuStar Annual Report 2010. So at this point in time, its fair to say that Statia is NuStars crown jewel, a major source of income. But theres more. In the transcripts of a NuStar Investors Conference, we read that international storage business has been a very big growth area for NuStar. Within that storage business, Statia has been a focal point for NuStars growth and will continue to be: We bought that terminal, it was 11 million barrels; it's up to 13 million barrels. We're building another million now to get it to 14 million. And we think the potential is much, much larger than that in terms of the customer interest. So you will continue to see growth CapEx and growth in St. Eustatius. Source: NuStarGP Holdings LLC at NAPTP MLP Investor Conference, May 26, 2011. So its fair to say that NuStar expansion plans are not going to stop with the one in the Farm area. Statia is NuStars guarantee for growth. NuStars true interest in Statia: low taxes and ultimate transshipment point Why NuStar loves Statia? Statia was a bargain to start with: we can only guess how and for how much money NuStar predecessor has bought land on Statia. Where else does a company enjoy special tax agreements, no anchorage fees, find cheap labor, and an almost absence of unions, environmental groups, and environmental law control bodies? But most significant, where else in the world would NuStar find a place that is located at the crossroads of major shipping routes and that takes the biggest ships in the world? Statia is one of the major transshipment points in the world, and that makes it one of NuStars most profitable assets. Exactly like in the 18th century for the West-Indische Compagnie. And Statias government is giving it to Nustar for a mere pittance; afraid it may pack and leave. NuStars tactics: dollars and deception Now lets go a little bit deeper into NuStars rhetoric. We already saw how valuable Statia is to NuStar. To keep all these huge interests safe, it is important for NuStar to get (and keep) local government and community on its side. How does NuStar do that? By using techniques of deception: camouflage, lots of euphemisms, overemphasizing its truthfulness, hedging their statements, and marginalizing or just ignoring the negative issues. Deception by camouflage NuStar is camouflaging itself as a good corporate citizen by throwing a few thousand dollars around (crumbs compared to the millions they make each year), and call that heavily investing in the island and serving the Statia community. They make it sound like the whole $ 477 million is an investment in the island instead of in the company itself. NuStar also wants us to believe that it beautifies our island by supporting Stenapa. Painfully quiet Stenapa. Deception by overemphasizing truthfulness NuStar is emphasizing over and over how it is committed to an open and honest dialogue, and what a good corporate citizen it is. Notice for example how Mr. Smith copies and pastes large amounts of propagandistic text from NuStars expansion website with every chance he gets. NuStar is also overemphasizing how safety is its top priority. Fact is that most accidents are caused by human failure, and that no safety regulation will protect us in case of earthquakes or major hurricanes. Remember Japan, Fukushima? And what safety regulation is able to evacuate all Statias inhabitants

in case something happens? Which surrounding fire department will come to assist in case of major fire? How is Statias hospital going to handle casualties on a large scale? We will be trapped on a small little island with only the ocean to flee into. We find that a very disturbing thought. Deception by using euphemisms and hedging statements When NuStar talks about risks, impact and dangers, it uses the following phrases a lot: as much as possible, we are going to great length, low impact, minimize risks. E.g. minimizing the tanks impact on the islands scenic views, the risk of emissions and vapors are extremely low. It all sounds very nice, but in fact is meaningless because the risks, danger, impact etc. are still there. NuStar even thinks were stupid enough to believe that by painting the tanks and planting a few trees, we wont see them anymore. According to NuStar, they will be integrated into the landscape. Are they serious? Deception by marginalizing and ignoring In all NuStars communication, you will see that they marginalize or just ignore issues like pollution, risks of oil spill accidents, close distance to schools, damage to eco-systems, destruction of cultural heritage, impact on tourism growth, no access to the beach and dive sites at Smoke Alley. NuStars True Color So is NuStar the devil? No. NuStar is a multibillion dollar multinational that simply needs to keep its stockholders a lot happier than the community of Statia. But luckily for NuStar, it only takes some deceptive rhetoric and a few thousand dollars to keep Statias government, organizations and community happy. Main point of discussion: economical development A lot of people already voiced their opinion on NuStars expansion plans. We think that nobody, not even NuStar, is able to deny that there will be an increase in danger, damage, and destruction in several areas. NuStar is desperately trying to pull the wool over our eyes, but luckily a lot of people have sense enough to see through this. But there is another fact we cannot deny. And that is that NuStar is the largest private employer on the island, and the expansion will definitely bring more economical activity. That is on the short term. The question is how in the long run this will benefit the island. We already made clear that NuStar needs to expand and that it is using deceptive tactics to reach that goal. How far are we willing to let NuStar expand? How much more power are we willing to voluntarily give them? How will Statia benefit if our hotels, shops, rental houses, apartments, and cars for the most part depend on one sole purchaser? Would it really be such a good idea, as Mr. Sneek proposes, to let Nustar help our government fix our roads, relocate the harbor, and be involved in electricity production? Our fear should not be whether NuStar one day will pack and leave, but how much more NuStar is going to expand. The more they grow, the more people, businesses and government will depend on them. Eventually, NuStar is going to make all decisions, and we cant bite because theres no other hand that feeds us. St. NuStar, the Crude Oil Rock.

Determine our own future We as a people fought almost 200 years for our freedom. We suffered tremendous pain and made great sacrifices to finally gain the right to determine our own future and our own destiny. It is more than sad to witness what we are doing with these rights. With a shortsighted, lazy attitude and dollar signs in our eyes, a lot of us, including our government, are willing to put Statias future solely into the hands of a foreign multinational. Why cant we work just a little bit longer and a little bit harder, polish our unique selling points (nature, identity, cultural heritage) and shine? It may not come just as easy or fast, but at least we can look into our childrens eyes and tell them, for better or for worse, we kept control over our own destiny. On behalf of St. Eustatius Awareness and Development (SEAD) Movement, Kenneth Cuvalay

From: Tom Morgan Sent: Thursday, September 01, 2011 8:36 PM

The question is how much? And in what form should payment be? Mr. Cuvalay and SEAD do a creditable job of describing how big companies operate. I suspect they are fairly close to the mark when they describe NuStar's goals and objectives with the expansion in Statia. As for NuStar's euphamisms and hedging statements, I recall writing such stuff when I handled PR duties for a number of Fortune 500 companies. It appears the issue is really this: NuStar wants to expand. How much are Statians willing to insist in payment? Will they insist that any expansion spare the waterfront near Smoke Alley? Or that expansion must spare the lands NuStar wants to build tanks on - in exchange for other lands? Or that NuStar help with roads and electricity and harbor relocation? (Which would have Statians give up some of their sovereignty.) Here is a suggestion for Statians, the Dutch and NuStar executives: Google the Alaska Permanent Fund Corporation. Read what Alaskans voted to do years ago with money that came from royalties on minerals mined and drilled. (Mostly revenues on oil.) One-fourth of royalties go into trust for Alaskans. The money remains in trust for current residents and those to come. The monies are invested. Investments are managed. Only income from the investments can be spent. Most of the spending is in the form of dividends to Alaskan residents. Suppose Statia had a similar fund? Money invested for the long-term. Income from it to be used for civic projects on the island. The projects to be determined by trustees chosen by Statians, the government and NuStar and perhaps the Dutch. (So that all parties are represented.) Money from the fund to come from rentals paid by NuStar for the terminal. Perhaps 25 percent of those rentals, as is done for the Alaskans. Perhaps a set fee per barrel of oil handled by the facility. Or perhaps $2 million per year.

If $2 million went into such a fund each year - and 5 percent was withdrawn for projects each year by year 10 there could be $1 million a year in income. Perhaps more, if the investments grew. The trustees could hire investment advisors to manage the investments. That can be done for a small fee. They could probably get the Alaskans to let Statia copy their moves. Alaskans have done well with their money. Given the scale of NuStar's operation in Statia, the $2 million figure does not seem unreasonable. Obviously, that would be for the company to decide. At any rate, such a fund would give NuStar great publicity. It would give Statians an obvious benefit, now and in future. It would compensate them maybe not fully - for what the expansion will inflict on the island. Set up properly, it would keep some of the "rent" from the hands and designs of politicians in Statia and Holland. It would empower Statians with investments that would grow from year-to-year. It would make the Dutch look good. It could allow funding for projects that ought to be done but for which money is always shy. If the money was used mostly for scholarships for Statians who agree to work in Statia for a few years after graduation, it would probably pay additional dividends to the island. Obviously, there are lots of possibilities for how to use the money sensibly. To be decided by whatever constitution is set up. And by the wisdom of the trustees over the years. For what it is worth, that is a suggestion for the "rent" Statians might insist upon from NuStar. By the way, the Alaskan Permanent Fund was created in 1976 and is worth about $40 billion today. That amounts to about $57,000 per resident. It has paid out about $19 billion over the years. That amounts to nearly $30,000 per resident. Tom Morgan Whitewall

From: koos@norakonv.com Sent: Saturday, September 03, 2011 10:29 PM I am following most of the comments that are being posted through Statia News on the proposed NuStar expansion plan. In particular the latest comments made by Mr. Kenneth Cuvalay and Mr. Tom Morgan did get my attention and I feel the need to give my opinion on a few issues. Mr. Cuvalay is right when he states that NuStar is a multi-million dolllar company with a responsibility towards its shareholders. It is the responsibility of any business to make money and to be profitable. This responsibility, by the way, the company also has towards its employees who depend on it for their livelihood and for the community in which it is established. And Statia for that matter is not unique. Many cities rely on big companies which have chosen their territory to establish their business and depend on those companies where it comes to their economies and jobs. There is usually quite some competition between cities or states when it comes to attracting investment to their territory. I am certain that also in our region there are islands that envy small Statia for having a company of the size of NuStar and the expansion plans they have. And we never really had to make

an effort to get the terminal to our island. If Claude Wathey had envisioned in those days what the economic impact could have been for St. Maarten, Statia would have never had an oil terminal. And an economic impact it has on Statia. When I came to live on the island in 1987 there were only 1800 people living on Statia. That number has doubled for the largest part through the presence of the oil terminal. Housing developments in Concordia, Princess and lately in White Hook would not have been there without the presence of the terminal. Most if not all businesses on the island directly or indirectly are benefiting from the presence of the terminal. More than 50% of government revenue comes directly from taxes paid by the terminal. When I read his article I cannot but notice that the practices Mr. Cuvalay is accusing NuStar of, he himself is using as well such as marginalizing, half truths or incorrect information. This is a pity. I am of the opinion that objective criticism has to be taken into consideration to enable us to make the right decision. It is however unfortunate that, to be able to get a point across, one apparently resorts using similar tactics as what one accuse the other party of. I want to highlight a few of these points. The price the original owners of the terminal have paid for the land has most likely been an acceptable price at that time that also others who purchased land in those days were accustomed of paying. It is obvious that it has been a lot less than what one would pay presently. To use this as a negative in your quest against the expansion has no base. The tax agreements in the past were between The Netherlands Antilles and the oil terminal. Only by the last agreement signed in 2004 the local government has played a, still, subordinate role. This agreement resulted however in a substantial improvement of revenues for the island. Could the agreement have been better? I may think so, especially if the local government was allowed to have a bigger say and had received the support for this. The claim that no anchorage fees are paid is pertinently not true. The harbor is the largest source of income, besides taxes, for the Statia government and almost all revenue comes from anchorage fees paid by vessels that visit the island because of the oil terminal. Also these fees have been raised substantially under the latest tax agreement. Is there room for improvement? I believe so. The claim made by Mr. Cuvalay that cheap labor is one of the benefits that keeps the terminal here is incorrect. The salaries paid by NuStar are substantially higher than average and are among the highest in the Caribbean. The only islands that can compete with this are Cayman Islands and Aruba. The absence of unions is another benefit Mr. Cuvalay brings to the table. I believe he underestimates the role of the unions at the terminal and apparently is not aware of their important and decisive role in collective labor agreements for terminal personnel. I agree with Mr. Cuvalay when he says that NuStar is not going to pack and leave the island in the event the expansion will not be allowed. Although Statia is very important for them, they have as he correctly states many more facilities and therefore also alternate possibilities to invest their moneys. The main loser in my opinion will be the island as we are missing a great opportunity to improve our economy, our infrastructure and the social circumstances of our people. I disagree that an expansion project will only create economic activities on the short term. It is obvious that the construction itself will create an economic boost for as long as it last. But I also

believe that in the long term the economic impact will be substantial. Forty extra direct jobs at the terminal means an additional thirty or forty extra jobs for the subcontractors, extra jobs for the laboratories and other ancillary businesses. More persons will have to visit the island, using hotel rooms, drive rental cars and eat in restaurants. Supermarkets and other shops will see additional revenue and need for extra employment. I can go on and on. For government, national and local, it means more tax revenues and more anchorage fees. The expansion plan will allow to break open the present tax agreement and will pave the way for increased income for the island. Tom Morgan is right. It is very important for Statia to establish what the island wants to benefit from this expansion on short as well as on long term and what are we prepared to give up for this. It is obvious that a positive decision only makes sense when what we gain is more than what we give up. This however is not always easy to calculate. The Alaska fund seems a very nice solution for investing the revenues. The question is; does it fit our situation? Alaska most likely could afford to deposit the revenues in a fund and have full benefit somewhere in the future. For Statia this is slightly different. Our government is cash strapped and is in dire need of revenues instantly. I remain of the opinion that the expansion should go ahead. All positive and negative effects need to be examined and the negative ones need to be mitigated and as much as possible reduced or avoided. Also the location for the expansion as well as the future jetty, a great concern to many of us, deserve serious consideration and research. Feasibility studies and impact studies by capable independent experts need to support the decision making process. There is where I see the very important role the government has to play. And I advise them once more to make sure that they surround them with this kind of support. Koos Sneek DP Councilman

From: Tom Morgan Sent: Tuesday, September 06, 2011 4:47 AM

As you know, my humble suggestion was for some of the payment for NuStar's expansion might be in the form of money into an endowment fund for Statia and Statians. It would be similar to the fund for Alaskans from Alaska's oil royalties. Koos Sneek has responded with a reminder. That Statia's "...government is cash strapped and is in dire need of revenue instantly". I understand his concern. However, he has put his finger on the very reason, the precise reason, why an endowment fund would make sense. The reason is simple: Governments all over the world for centuries have always been in dire need of revenue. Politicians have to deal with this problem. Needs - which the politicians must deal with - always outstrip immediate income. Or so it seems. And whenever any extra income appears, needs pop out of the woodwork to soak it up. (Many families suffer the same problem, of

course, and never save up any money.) Politicians rarely try to set money aside as savings. They don't do this because there are always facing projects that need the money they would have put into savings. And if they did ever manage to put money into savings - into an endowment fund, for instance - no voter would ever thank them.

Organizations by the thousands face similar problems. This is why their wise trustees have set up endowment funds. This is why big donors to churches and hospitals and colleges by the tens of thousands have given billions of dollars to such endowment funds. They know the money will not be spent to meet the immediate needs of the organizations. It will be invested. The income from the investments will come to the organizations for many years to come, in good times and bad. Wealthy parents often set up endowment funds for their families. To keep the kids from spending the money for their immediate needs. The endowment funds provide a flow of income to the kids. And the kids cannot get their hands on the original money - which has been invested. Many villages, towns and cities in the U.S. have endowment funds. Their political leaders would love to lay their hands on the money in those endowments. Because they are always short of money to fund the projects they favor. Yet they are grateful that those endowments pour out income every year for community projects. They are grateful the politicians of 30 and 50 and 100 years ago did not spend the money that went into those endowment funds those years ago. All of us have heard of the work of the great foundations - the Ford Foundation. The Rockefeller Foundation, etc. These are simply endowment funds that were begun with contributions from Henry Ford and John D. Rockefeller. The money was invested and has grown a great deal over many years. Meanwhile, the foundations draw 5 percent annually to spend on worthy projects.

Statia and Statians might have a golden opportunity to create a similar fund for their children and grandchildren and great-grandchildren to come. Such an opportunity does not come to every community and certainly not to every island. Anguilla and St. Lucia both have community foundations along the lines I have described. Their social security systems have give seed money to the foundations. They struggle to add meaningful amounts to them. Statia has the unusual situation in which a substantial new stream of revenue may come from a company that wants to expand its operations. If Statians were able to stream a portion of that new revenue into a "Statia Fund" to be invested, politicians would not miss the funds. And Statians would benefit from it further into the future than most of us can imagine.

My apologies for the length of this, but this may be a rare opportunity for Statians. It is my hope that they will at least consider it.

Tom Morgan

From: George Works Sent: Tuesday, September 06, 2011 12:44 PM Dear Editor, I was very favorably impressed with Tom Morgan's suggestion for a trust fund for Statia, funded by some proceeds from the NuStar expansion. Such a foundation would be fairly easy to establish and would keep books subject to audit as all foundations must. This could be an incredible benefit to generations of Statians to come.

Since Mr. Morgan is extremely experienced in investment management, I wonder whether he wold have the time to put a bit more detail into his plan and to explain it to our Executive Council and NuStar. Perhaps he could draft a charter for the foundation.

George Works

From: Tom Morgan Sent: Tuesday, September 06, 2011 4:42 PM

Yes, I would be honored and happy to help in any way I can. And I will be on Statia from this Wednesday for a week if anyone can fit a discussion into their schedules at such short notice. After that week I will be back in mid-November. Obviously we could work on a proposed charter from any location if Statian leaders asked for such work. One additional thought: if Statia was successful in setting up such a fund, established a proper structure, charter, constitution, board of trustees, etc, along with NuStar support, the trustees and government might apply to the Dutch government and it's quasi-government appendages for a "seed money" contribution to the fund. In return for substantial seed money, the Dutch might be allowed to have one representative on the board of trustees. Just a thought. The benefit to the Dutch would be two-fold: 1. This would be a way of acknowledging that the new "municipality" lacks some of the financial infrastructure and charitable mechanisms that Dutch municipalities have enjoyed for years. 2. It might relieve the Dutch - in modest ways - of some of the burdens of Statian community needs. It would be wonderful for Statians if the Dutch supported a Statia Fund. I cannot imagine any Dutch government providing an annual contribution from its annual budgets because governments don't like to do such things. It - or one of its agencies -might be inclined to make a lump sum contribution as described above. Even better, if imagination prevailed, an enlightened Dutch government might set up an annual add-on to some fee within the Kingdom to flow into the Statia Fund. While this may seem far-fetched today, it could become a long-term lobbying project for fund trustees and Statia government.

Tom Morgan

From: Bernard Ogden Schmidt Sent: Wednesday, September 07, 2011 2:42 AM Hi Good Statian Folks,

I wish to agree with the gentleman Mr. Morgan. A Statia Fund is the only positive additive we can receive from the expansion of Nustar. It will benefit all Statians, visitors and future generations. Institutions like the Auxilary Home and Chapel Piece Foundation, Sporting organisations and Educational facilities can have an annual income to help them in their great tasks of caring for the aged, and educating the young. I was really disappointed that the good Councilman Sneek lost the opportunity by not supporting such a proposal. Instead, he focused only on his political ambitions where funds can be abused thru political grandstanding. I do hope in the near future he can still become the one to propose such a fund to the council and the Statian population.

Another point of concern. Mostly we read comments that people are against the expansion of Nustar and I feel this is unfair commentary. Most of the persons expressing negative comments on Nustar expansion are two-fold 1) we protest the use of the farm area for the expansion, and 2) our great concern for the environment and it's impact on the marine life.

I wish to appeal to all politicians and citizens to rally together and negotiate with Nustar, the Dutch and local government to set aside atleast 15% to 25% of the local revenues for a Statia- Fund.

GIVE A BRIGHTER FUTURE TO OUR GRAND CHILDREN.

From: koos@norakonv.com Sent: Wednesday, September 07, 2011 3:13 PM

I want to make it clear that I am not opposing a fund of the kind Mr. Morgan is referring to. I am merely drawing the attention to the reality of today. A few examples: Government cannot pay decent salaries, which makes it very hard to attract quality personnel. Also many of our locals dont want to come back home because of this. Government buildings are almost beyond repair and not suitable to work in. There is no money on the budget for maintenance. All our roads and other infrastructure are in a deplorable state and need urgent attention. There is not one cent for investment. Instead there is a multi-million dollar investment deficit.

With regard to the proposed goals of Mr. Schmidt I can say the following; Education, healthcare (including auxiliary home and Chapel Piece) are since 10-10-10 the responsibility of the Dutch government. The island government needs to focus on their own primary responsibilities. This week I have inspected the sport facilities. I can assure you that instant investment and structural funding for maintenance is required there. And if we go into the direction of an endowment fund I prefer that the seed money and also annual deposits should come from the Dutch government. The main increase in tax revenue will go directly to The Hague. (income tax-ABB-property tax-revenue tax) I am always willing to take part in discussions with anyone, including Mr. Morgan and Mr. Schmidt. The general goal needs to be the improvement of Statia and the life of our people. I have seen a lot of criticism on the planned terminal expansion, but very few have offered concrete proposals for alternative development. And I mean no vague solutions sometime in the distant future but concrete proposals that can substitute for what is on the table now.

Best regards, Koos Sneek DP Council member

From: Tom Morgan Sent: Wednesday, September 07, 2011 5:04 PM

Without intending to, Mr. Sneek makes the case for a Statia Fund. (And he also makes it clear he is not opposed to one.) His argument is that there are many projects in Statia that cry out for money today. But five years from now there will be many projects that cry out for money. Ten years, fifty years from now there will not be enough money to pay for all that will need to be done. The next generation of politicians will face the same problems. As will the generations that follow them. All the more reason to strive to set up a structure to endow money now, when the negotiations with NuStar are at hand. Now, when the relationship with Holland is in flux. At any time in the future, politicians will not be able to make the plans to drain the swamp because of the alligators chomping at their backside. That is the problem Mr. Sneek and his fellow politicians face at the moment.

It looks as if we share the same goals. If more Statians share such a goal and are willing to work together toward it, who knows what they might achieve. Tom Morgan

From: Smith, David Sent: Thursday, September 08, 2011 1:06 PM

..... Commissioner van Putten and the Coalition asked us to be much more engaged in the discussion of the terminal with the public. We are trying to do this and the Daily Herald is one example, as is the website we have published and updated, my appearance on the local TV talk show, responses to blogs, etc. And when we have a more definitive plan, we will do even more public outreach, including a community day at which we will make presentations, give site tours, etc. I dont necessarily tell Commissioner van Putten every time I talk to the Daily Herald, but we do regular communication. Concerning Mr. Morgans proposal, it is really up to the government to discuss with us, not a public forum. Mr. Morgan was discussing royalties for natural resources. We do not produce anything, merely provide a service. I do not have the authority to discuss NuStars position with tax, that must be approved by our Board of Directors. So please bear with us as we continue to review various options for this project, and I promise we will keep you posted on any relevant developments.

Regards,

From: Linus Walsh Sent: Thursday, September 15, 2011 2:31 AM

Dear Mr. Smith,

For hundreds of years, a public forum was how the people let their government know how they themselves felt about various proposals the elected elite "brain stormed". The process will go on for hundreds more. I don't think the people of Statia are naive to believe that the writers to StatiaNews have any rights to sign on the dotted line. However, StatiaNews does have the right to bring forward the people's views and have concerned people exchange ideas. This then hopefully keeps in check local government from a rubber stamp process. As for the pols in Holland, well that's a whole discussion on it's own. I'm quite sure Mr. Morgan understands and is not naive to the differences between your company NuStar and the State of Alaska. What you fail to see thru the forest, Mr Morgan was offering up a proposal on the public forum as to what our friends in local government might be able to do with a portion of the monies that came to Statia via Holland from theNuStar deal in whatever form it takes. The local government could "save a few pennies for a future rainy day", as my father would say. To make his point clear, Mr Morgan used as an example the distribution of royalties, put together by far thinking individuals, that the people of Alaska receive and will continue to receive from the pipeline.

Regards,

J. Linus Walsh Upper Round Hill Statia