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BP to pay $400 million for pollution control, $8 million fine

(INGAR 101) A flare stack operatiBP Whiting facility is seen from air  July 18 2007 photograph. Jeffrey D. Nicholls/Post-Tribune

(INGAR 101) A flare stack in operation at the BP Whiting facility is seen from the air in a July 18, 2007 photograph. Jeffrey D. Nicholls/Post-Tribune

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Updated: July 3, 2012 9:04AM



BP has agreed to pay about $420 million in fines and new equipment at its Whiting oil refinery to reduce air pollutants by about 4,000 tons per year.

The reductions are supposed to target pollutants that can cause respiratory diseases like asthma and cancer and others like greenhouse gases.

“We are pleased to have reached an agreement that protects jobs, consumers and the environment,” Stevel Cornel, president of BP Products North America, said in a release. “This multibillion-dollar modernization project is the largest private-sector investment in Indiana history and ensures the Whiting Refinery will continue to provide fuel and jobs for the region for decades to come.”

Local and national environmental groups praised the settlement, which was filed Wednesday in the U.S. District Court, for ground-breaking requirements that will also likely affect other refineries across the country in the future.

“This is a landmark settlement that is going to set the bar for future expansions,” Ann Alexander, with the National Resource Defense Council, said.

The settlement includes $400 million to be spent reducing the amount of pollutants that escape through the flares at the BP Whiting refinery. According to a release from the Environmental Integrity Project, refineries normally don’t include emission releases from flares because it was estimated just 1 percent to 2 percent of the gases burned actually escape into the air.

However, Eric Schaeffer, with the EIP, said a recent study shows it’s actually closer to 15 percent. BP has agreed to install compressors that will capture most of the gases that would have otherwise gone to the flares. BP can then use those gases to power equipment at the refinery, helping to save BP money. BP must install other equipment that will ensure the flares burn at least 98 percent of any other gases that do make it there. The Whiting refinery will have 10 flares overall once its expansion project is done. Schaeffer said most of the new equipment will have the new controls.

“Today’s settlement will protect the residents of northwestern Indiana from harmful air pollution by requiring state-of-the-art pollution controls,” Cynthia Giles, assistant administrator for the U.S. Environmental Protection Agency’s Office of Enforcement and Compliance Assurance, said in a release.

Another part of the agreement calls for BP to spend $2 million on installing four monitors along its perimeter to check the air for pollutants such as benzene, sulfur dioxide, hydrogen sulfide and other toxic chemicals.

Online test results

Alexander said that although monitoring has been included in other settlements, this one is ground-breaking because BP has agreed to post the results on a public website once a week for at least two years, although it has said it intends on continuing to do so for longer.

“BP’s neighbors have a right to know what BP is putting into the air to breathe,” Andrew Armstrong, a staff attorney with the Environmental Law and Policy Center, said.

Alexander, who called it a “huge development” for Northwest Indiana, said that BP must release the information so that the public can readily understand it.

Other steps BP must take include fixing leaking pipes, reducing emissions from its boilers and heaters on a regular basis and putting controls on its coker processing to reduce emissions.

Schaeffer said that most of the day-to-day controls must be in place within a year and that the flare controls will be rolled out over four years, with the last year being 2017.

The company will also research all possible technologies for reducing green house gas emissions, such as boilers heated by solar power, and then spend $9.5 million on implementing some of those technologies. BP must also spend $500,000 on helping local municipalities retrofit their diesel vehicles to make them more green.

$8 million in fines

Finally, the company will pay $8 million in fines — $7.2 million to the U.S. government and $800,000 to Indiana — for violating their previous air permits.

Steve Francis, a local resident and chairman of the Hoosier Sierra Club, and Nicole Barker, executive director of Save the Dunes, praised the settlement for protecting the environment and public health as well as for helping the economy. Francis said jobs will be created to install, maintain and monitor the pollution controls.

“We view this as a triple win,” Francis said.

Barker said that Save the Dunes is aware of the jobs BP has created but wanted to make sure that they were balanced with protecting public health and the environment. A release from BP says the company will employ 10,000 people at the Whiting refinery this year.

The settlement comes after the various groups filed a challenge in 2008 to BP’s proposed air permit. The company originally said that pollution emissions would be reduced by the new permit, but Alexander said that the various environmental groups discovered BP had miscalculated its numbers in the more than 3,000-page permit application.

The EPA agreed with the challenges in 2009, she said, and BP soon afterward asked to work with all the groups in reaching a settlement. The settlement addresses the Whiting refinery’s new air permit and finalizes the permit violations.

Alexander said that the EPA uses previous permits to set standards for new permits, so having such stringent limits on pollutants for BP’s air permit means that other refineries should have to follow suit when they seek new permits. Schaeffer credited BP for stepping up and agreeing to the new technologies and limits.

“This settlement really does mean something for other communities as well,” he said.



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