BP Agrees to Precedent-setting Settlement Over Whiting Refinery Pollution Permits

CHICAGO (May 23, 2012) – The controversy over air pollution permits awarded by the State of Indiana to expand BP’s refinery in Whiting has come to an end with a precedent-setting settlement that will cut emissions from the highly-polluting tar sands oil project and provide stronger air quality protections for Northwest Indiana and Chicago residents. The consent decree was signed by state and federal agencies, BP and the consortium of environmental and community groups who have long asserted that BP’s air permits did not accurately reflect the pollution realities of the Whiting refinery’s expansion.

“Tar sands are a nasty source of oil that threatens our climate and also emits dangerous pollution into the communities where it is refined.  Today’s settlement ensure local communities in Northwest Indiana and Chicago’s South Side will be protected from the worst air pollution impacts,” said Ann Alexander of the Natural Resources Defense Council (NRDC), lead attorney for the community and environmental groups fighting the permits. “The permit that BP and the State of Indiana drafted did not reflect reality. And as the country wakes up to the mess being made by tar sands all over the country, it will be harder and harder for them to keep trying to play these games.”

The settlement calls for millions of dollars in added pollution control and monitoring equipment to address increased emissions associated with the facility’s shift to tar sands oil. The EPA estimates that the controls will eliminate more than 4,000 tons of regulated pollutants annually, including dangerous volatiles organic compounds, sulfur oxides and nitrogen oxides.

It also puts air monitors in place that will help illuminate a broader understanding of emissions from refineries processing heavy oil. With a number of Great Lakes refineries considering similar conversions to tar sands, this data will help other communities near these facilities put appropriate health protections in place.

The challenge to BP’s air permits followed a previous successful challenge by NRDC and Sierra Club to a tar sands expansion permit issued for the ConocoPhillips Wood River, Illinois refinery, which was likewise resolved with a settlement requiring emissions minimization, in particular from refinery flares. Flares -- large torch-like structures used to burn gases and release pressure in the refinery --have been shown to emit thousands of tons of harmful air pollutants a year.

The expansion at BP Whiting adds three new flares, but BP’s pollution analysis assumed that these new flares would never even be used. NRDC and the other citizen groups alleged in their challenges, and US EPA substantially agreed, that BP had committed multiple errors of this nature in calculating emissions from the proposed expansion to support their conclusion, agreed to by Indiana, that the overall emission increase was too small to trigger modern pollution control requirements under the Clean Air Act.

The settlement requires that BP implement a host of tight, industry-leading pollution control requirements in connection with the refiner’s ongoing $4 billion expansion project. Some examples include:

• Install equipment on both its new and existing flares which will recover and reuse waste gases, cutting flaring emissions up to 90%.
• Control emissions from the refinery “coking” process that is being re-tooled to handle the heavy Canadian crude. 
• Spend $9.5 million on projects to reduce carbon pollution emissions, which were expected to increase significantly as a result of the tar sands project. 
• Establish a $500,000 fund which will be available to local public agencies to reduce local diesel emissions through a diesel retrofit program.

Collectively, these new controls will cost BP approximately $400 million to install. 

In addition, the refinery will be required to do monitoring at the fence line for dangerous benzene, toluene, pentene, sulfur dioxide, hexane, hydrogen sulfide and other sulfur compound emissions and inform the public with weekly updates available online. Data from these monitors will shed new light on community impacts of refinery operations, particularly related to tar sands emissions, that will help to inform future permitting and regulatory processes.

NRDC represented the local Indiana environmental organization Save the Dunes in a legal challenge to the insufficient air pollution permits issued to BP in 2008. Hoosier Chapter of the Sierra Club (represented by the Environmental Integrity Project) and the Hoosier Environmental Council together with two Indiana residents (represented by a local attorney and the Environmental Law and Policy Center) were co-plaintiffs in the litigation. These citizen organizations also joined in a petition to the US Environmental Protection Agency calling for the Agency to object to one of the Indiana permits. Around this same time, USEPA issued a series of Notices of Violations to Whiting and other BP refineries. The USEPA granted key parts of the citizen groups’ petition in 2009, and BP began negotiating with the USEPA and the citizens shortly thereafter. 

As part of the settlement, the petitioners agreed not to challenge the new, more stringent air pollution permit. The settlement, signed by the State of Indiana, BP, the Department of Justice, EPA, and environmental groups, will go into effect following a brief public comment period.

While the citizens’ permit challenge specifically targeted air pollution from the refining process, its resolution does not alleviate broader concerns about the refinery’s water emissions, as well as the use of Canada’s tar sands to produce oil. The groups will continue in appropriate venues to encourage use of cleaner fuels rather than crude oil derived from the tar sands. The extraction and refining of tar sands produces up to three times more climate-changing emissions than conventional sweet crude oil, uses and pollutes an intense amount of water, and turns pristine forests into wastelands in Canada. More information on the dangers of tar sands and other dirty fuels can be found at: http://www.nrdc.org/energy/dirtyfuels_tar.asp

An additional challenge to the refinery’s air permits brought by separate parties awaits final signoff on a pending settlement agreement.

The following are comments from the petitioners about the final settlement:

“The permit fight was painted as a threat to the local economy; nothing could be further from the truth,” said Steve Francis, Chairperson of the Hoosier Chapter Sierra Club. “This agreement forces the project to integrate more pollution control equipment. That means lessened health impacts, respiratory problems and more construction jobs. This has been a job generator; not a job killer.” 

“What goes up must come down; the pollution reductions that result from this settlement benefit the nearby communities in Northwest Indiana and Chicago, but they are also good for the Lake Michigan ecosystem too. The refinery sits in the midst of one of the most unique ecosystems in the world and that needs to be protected too,” said Nicole Barker, executive director of Save the Dunes.

“The Region has historically borne a large brunt of our state’s air pollution. This settlement strengthens the health safeguards for the people of Northwest Indiana from BP-Whiting’s enormous expansion.  A healthier Northwest Indiana also means a more robust work force and a better place to live, work and play’” said Jesse Kharbanda, Executive Director of the Hoosier Environmental Council.

"By bringing all of the stakeholders to the table, we arrived at an agreement that protects the public health, mitigates environmental impacts and boosts economic growth," said Faith Bugel, Senior Attorney, Environmental Law & Policy Center. "We hope to continue in this spirit of partnership moving forward."