BP Expansion No Threat to Lake Michigan

Published February 1, 2008

The BP oil company’s plans to expand its Whiting, Indiana refinery will not hurt Lake Michigan, according to a study commissioned by Indiana Gov. Mitch Daniels (R) and conducted by Indiana University environmental professor James Barnes.

The study vindicates BP after the energy company endured an onslaught of negative publicity last summer when it announced plans to increase discharges into the lake.

Accusations Made Headlines

BP received regulatory approval from the Indiana Department of Environmental Management last summer to discharge 54 percent more ammonia and 35 percent more suspended solids into Lake Michigan.

But the company put those plans on hold after environmental activists and spokespersons for the City of Chicago made headlines by asserting the new discharges would damage the lake’s health.

The Indiana University study shows those assertions to be unfounded.

“The report confirms what BP has said all along–that the permitting process complied with existing regulations and that the permit complies with the explicit requirements of both state and federal law,” said BP spokesperson Scott Dean.

“The report also confirms our belief that our treated water will not violate the water quality standards for Lake Michigan,” Dean said.

Daniels said in a press statement the study “vindicates Indiana’s staunch protection of the water quality of Lake Michigan.” Daniels pledged to implement the study’s recommendations to make the permit approval process more transparent, to avoid a repeat of the misunderstandings and public suspicion earlier raised by environmental activists’ response to the BP proposal.

Future Course Undecided

BP spent several months studying alternative methods of operation for its Whiting refinery after pledging last summer not to take advantage of its new discharge permit. BP has not indicated whether it will respond to the new study by increasing discharges after all.

“Hopefully this report increases the likelihood that BP will be able to complete its proposed $3.8 billion investment in its Whiting facility–a project critical to the economic and community development in Northwest Indiana,” said Vince Griffin, vice president of energy and environmental policy for the Indiana Chamber of Commerce.

Expansion Necessary

Tom Tanton, vice president of the Institute for Energy Research, said the decision is especially important because the nation needs more refinery capacity.

“Since 1949, capacity has increased 170 percent, and oil distillation input tripled, while the number of operating refineries has decreased from 336 to 148 today,” Tanton said. “Capacity expansion has occurred primarily at existing facilities rather than from the construction of new facilities.

“The Whiting facility continues this positive trend,” Tanton continued, “and it illustrates an important continuation of technology innovation that increases production capacity necessary to satisfy growing demand while simultaneously improving their environmental footprint. Expansions also moderate the cash-heavy investments that would be necessary to build greenfield plants, although those will be needed as well.

“Once the public becomes more aware of the importance of expanded refinery capacity and their vastly improved environmental performance,” Tanton said, “it should be easier to build new and expanded facilities that will become increasingly important to supply consumers with reasonably priced gasoline.”

James M. Taylor ([email protected]) is a senior fellow of The Heartland Institute and managing editor of Environment & Climate News.