BP, federal government announce $400 million settlement

2012-05-23T14:00:00Z 2012-07-31T12:56:10Z BP, federal government announce $400 million settlementBy Bowdeya Tweh bowdeya.tweh@nwi.com, (219) 933-3316 nwitimes.com

A BP PLC subsidiary has agreed to spend more than $400 million to upgrade environmental controls at its Whiting Refinery and pay $8 million in civil fines in a settlement announced Wednesday to resolve violations of the Clean Air Act and other laws.

The company entered into the settlement with federal and state agencies and several environmental groups.

The consent decree filed Wednesday in U.S. District Court in Hammond includes components of BP's revised air permit, which serves as the operating permit for the expansion.

Environmental groups, including Save the Dunes, challenged permits the Indiana Department of Environmental Management issued to BP in 2008. The EPA sided with concerns from environmental groups and rejected the operating permit in 2009 for reasons that included inaccurate estimations of reductions of certain emissions in the Whiting Refinery modernization project.

The fines also cover violations of a 2001 consent decree with BP that covered all of its refineries. Of the $8 million, about $800,000 is expected to go to the state of Indiana.

BP Products North America President Steve Cornell said in a statement the company was pleased to reach an agreement that protects jobs, consumers and the environment.

BP spokesman Scott Dean said the additional expenditures and work isn't expected to change the overall refinery modernization project timeline, which ends in 2013. The Whiting Refinery is one of the largest refineries in the country and can process up to 405,000 barrels of crude oil per day. The modernization project aims to retrofit the refinery to process a larger volume of heavy Canadian crude.

The EPA estimates the additional controls will eliminate more than 4,000 tons of regulated pollutants annually, including volatile organic compounds, sulfur oxides and nitrogen oxides. These compounds can cause respiratory problems such as asthma and are significant contributors to acid rain, smog and haze.

BP said the upgrades, which are in addition to the billions the company has already spent, include a system to reduce flaring of refinery gas and practices to lower emissions from process equipment.

The company also pledged to install a fence line system worth $2 million to continuously monitor airborne pollutants such as benzene, sulfur dioxide and hydrogen sulfide. Information from four monitoring stations is expected to be posted on a publicly available website weekly.

Natural Resources Defense Council spokesman Josh Mogerman said the lawsuit was never about stopping the expansion, but to increase protections and reduce emissions facing residents in Northwest Indiana and the Chicago area.

"This agreement forces the project to integrate more pollution control equipment," said Steve Francis, chairman of the Sierra Club Hoosier Chapter. "That means lessened health impacts, respiratory problems and more construction jobs. This has been a job generator, not a job killer."

However, the groups still are concerned about pollution from refineries that process bitumen extracted from Canadian oil sands.

During a conference call with reporters, Eric Schaeffer, executive director of Environmental Integrity, said the settlement features a series of deadlines the company has to meet to become compliant that ranges from within the next year to 2017. 

The consent decree is subject to a 30-day public comment period and final court approval.

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