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[Southsider2k12]

http://www.chicagotribune.com/business/chi...ll=chi-news-hed

BP gets break on dumping in lake
Refinery expansion entices Indiana

By Michael Hawthorne
Tribune staff reporter
Published July 15, 2007

The massive BP oil refinery in Whiting, Ind., is planning to dump significantly more ammonia and industrial sludge into Lake Michigan, running counter to years of efforts to clean up the Great Lakes.

Indiana regulators exempted BP from state environmental laws to clear the way for a $3.8 billion expansion that will allow the company to refine heavier Canadian crude oil. They justified the move in part by noting the project will create 80 new jobs.


Under BP's new state water permit, the refinery -- already one of the largest polluters along the Great Lakes -- can release 54 percent more ammonia and 35 percent more sludge into Lake Michigan each day. Ammonia promotes algae blooms that can kill fish, while sludge is full of concentrated heavy metals.

The refinery will still meet federal water pollution guidelines. But federal and state officials acknowledge this marks the first time in years that a company has been allowed to dump more toxic waste into Lake Michigan.

BP, which aggressively markets itself as an environmentally friendly corporation, is investing heavily in Canadian crude oil to reduce its reliance on sources in the Middle East. Extracting petroleum from the thick goop is a dirtier process than conventional methods. It also requires more energy that could significantly increase greenhouse gases linked to global warming.

Environmental groups and dozens of neighbors pleaded with BP to install more effective pollution controls at the nation's fourth-largest refinery, which rises above the lakeshore about 3 miles southeast of the Illinois-Indiana border.

"We're not necessarily opposed to this project," said Lee Botts, founder of the Alliance for the Great Lakes. "But if they are investing all of these billions, they surely can afford to spend some more to protect the lake."

State and federal regulators, though, agreed last month with the London-based company that there isn't enough room at the 1,400-acre site to upgrade the refinery's water treatment plant.

The company will now be allowed to dump an average of 1,584 pounds of ammonia and 4,925 pounds of sludge into Lake Michigan every day. The additional sludge is the maximum allowed under federal guidelines.

Company officials insisted they did everything they could to keep more pollution out of the lake.

"It's important for us to get our product to market with minimal environmental impact," said Tom Keilman, a BP spokesman. "We've taken a number of steps to improve our water treatment and meet our commitments to environmental stewardship."

BP can process more than 400,000 barrels of crude oil daily at the plant, which was built in 1889 by John D. Rockefeller's Standard Oil Co. Total production is expected to grow by 15 percent by the time the expansion project is finished in 2011.

In sharp contrast to the greenways and parks that line Lake Michigan in Chicago, a string of industrial behemoths lie along the heavily polluted southern shore just a few miles away. The steady flow of oil, grease and chemicals into the lake from steel mills, refineries and factories -- once largely unchecked -- drew national attention that helped prompt Congress to pass the Clean Water Act during the early 1970s.

Paul Higginbotham, chief of the water permits section at the Indiana Department of Environmental Management, said that when BP broached the idea of expanding the refinery, it sought permission to pump twice as much ammonia into the lake. The state ended up allowing an amount more than the company currently discharges but less than federal or state limits.

He said regulators still are unsure about the ecological effects of the relatively new refining process BP plans to use. "We ratcheted it down quite a bit from what it could have been," Higginbotham said.

The request to dump more chemicals into the lake ran counter to a provision of the Clean Water Act that prohibits any downgrade in water quality near a pollution source even if discharge limits are met. To get around that rule, state regulators are allowing BP to install equipment that mixes its toxic waste with clean lake water about 200 feet offshore.

Actively diluting pollution this way by creating what is known as a mixing zone is banned in Lake Michigan under Indiana law. Regulators granted BP the first-ever exemption.

The U.S. Environmental Protection Agency has been pushing to eliminate mixing zones around the Great Lakes on the grounds that they threaten humans, fish and wildlife. Yet EPA officials did not object to Indiana's decision, agreeing with the state that BP's project would not harm the environment.

Federal officials also did not step in when the state granted BP another exemption that enables the company to increase water pollution as long as the total amount of wastewater doesn't change. BP said its flow into Lake Michigan will remain about 21 million gallons a day.

In response to public protests, state officials justified the additional pollution by concluding the project will create more jobs and "increase the diversity and security of oil supplies to the Midwestern United States." A rarely invoked state law trumps anti-pollution rules if a company offers "important social or economic benefits."

In the last four months, more than 40 people e-mailed comments to Indiana officials about BP's water permit. One of the few supportive messages came from Kay Nelson, environmental director of the Northwest Indiana Forum, an economic development organization that includes a BP executive among its board of directors. She hailed the company's discussions with state and community leaders as a model for others to follow.

Nearly all of the other comments, though, focused on the extra pollution in Lake Michigan.

"This is exactly the type of trade-off that we can no longer allow," wrote Shannon Sabel of West Lafayette, Ind. "Possible lower gas prices (I'll believe that when I see it!) against further contamination of our water is as shortsighted as it is irrational."

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mhawthorne@tribune.com

[Southsider2k12]

http://www.chron.com/disp/story.mpl/ap/fn/5360207.html

INDIANAPOLIS — An independent analysis of the regulatory process Indiana used to approve a permit boosting pollution discharges from BP's Whiting, Ind., refinery into Lake Michigan concludes that the permit fully complies with federal and state laws.

But the report released Thursday also highlights problems with Indiana's regulatory process that its author said helped fuel an uproar this past summer over the wastewater permit for the nation's fourth-largest refinery.

The analysis sought by Gov. Mitch Daniels found that BP's permit is as demanding or more so than adjoining states' restrictions on refineries. And it concludes that its higher discharge levels do not "threaten drinking water supplies nor portend beach closings."

However, the report by James Barnes, the former dean of Indiana University's School of Public and Environmental Affairs, concludes that the controversy over the permit arose in part from shortcomings in Indiana's regulations governing the lake's water quality.

"The current situation illustrates the pitfalls that accompany a less than clear set of regulations," his report states.

Daniels requested the analysis in August following weeks of harsh criticism by environmentalists, the public and lawmakers about the 1,400-acre refinery's new wastewater permit, which replaces one issued in 1990.

The permit, which Indiana granted in June, had been reviewed and approved by the U.S. Environmental Protection Agency. It allows the refinery to increase the amount of ammonia it dumps into the lake by 54 percent and its discharges of suspended solids by 35 percent by 2012.

Environmentalists said the permit amounted to a reversal of decades-long efforts to reduce pollution in the lake and that it threatened the drinking water supply for Chicago and several other cities in Illinois and Indiana.

Early on, inaccurate newspaper reports stating that the permit would allow discharges of "industrial sludge" further stoked the public's fears, Barnes said.

Shortly after he began his review, BP abandoned its plans to increase the amount of pollution it discharges from the refinery under the permit, which BP needs as part of its planned $3.8 billion expansion to process more heavy Canadian crude oil.

Company officials said they would either find a way to stay within the limits set in its previous discharge permit or drop the expansion plans, although the permit remains in place for the refinery about 20 miles southeast of Chicago.

Barnes, who's a former general counsel and deputy administrator of the U.S. Environmental Protection Agency, spent four months poring over documents for his review.

He found that the "core of the controversy" was Indiana's "antidegradation" regulations that come into play in permit requests for new or increased pollutant discharges into the lake.

Barnes said Indiana has two sets of antidegradation regulations _ one for high-value waters that are part of the Great Lakes system _ and the second for what's called an "outstanding state resource water" in that system.

The rules for the high-value waters require an analysis that looks at the steps that could be taken to minimize or prevent water quality impacts. But he found that the second set of regulations _ the one that applied in the case of BP's permit _ has no such requirement.

In an interview Thursday, Barnes said the difference in the two sets of rules was striking.

"It certainly did jump out that you had one set of these antidegradation regulations that spells out what somebody who wants to come in and increase their discharges had to do and then it was silent in the second set," he said.

Although the Indiana Department of Environmental Management ended up seeking an antidegradation analysis from BP, Barnes said the insufficient antidegradation rules thwarted the agency's efforts to get complete information from the London-based oil company.

Barnes also chided IDEM for not explaining why, as part of the permit, it gave the refinery a 5-year grace period to meet the federal government's more restrictive mercury discharge rules.

His analysis includes numerous recommendations for changes to the state's regulatory process, including addressing differences in the antidegradation rules and making the permitting process "more transparent" and to more actively engage public input.

In a statement sent Thursday, Daniels' office said his administration would move "promptly" to adopt Barnes' recommendations and said that his report "vindicates Indiana's staunch protection of the water quality of Lake Michigan."

Tom Anderson, executive director of the Michigan City-based Save the Dunes Council, praised Barnes for a thorough analysis and for his recommendations for regulatory changes.

"A much more transparent process that allows for public review and comment on the anti-degradation demonstration is needed," he said.

Joel Brammeier, vice president for policy with the Chicago-based Alliance for the Great Lakes, said Barnes' review mirrors the group's own conclusions.

"While BP's permit was in compliance with the letter of the law, Indiana's permit regulations simply didn't demand enough from BP to withstand public scrutiny," he said.