Despite Gulf Crisis, BP Moving Ahead in Whiting
May 21, 2010
The BP Whiting Refinery in Whiting, In. (Photo courtesy of the Post-Tribune of Northwest Indiana)
Officials with the oil giant BP say it's recovering about 3,000 barrels
of oil a day from that huge leak in the Gulf of Mexico. The company is
spending millions to stop the leak and may have to shell out millions
more in cleanup costs and economic losses to the region. Closer to
home, in Northwest Indiana, there's concern that all this expense may
affect BP's multi-billion dollar investment in its Whiting, Indiana
refinery, just a few short miles from Chicago's city limits. The Gulf
catastrophe also has emboldened BP's local critics about the company's
environmental record here.
Joe Stahura can look outside his office window and see the nation's largest in-land refinery just a few blocks away.
Stahura is the mayor of Whiting, Indiana.
He knows first hand of just how important BP's Whiting Refinery is to his city off the shores of Lake Michigan.
STAHURA: Right now, they are approximately 50 percent of our tax base.
That means BP pays for half of everything in the city of Whiting, from the public schools, police and fire, to the mayor's salary.
Soon, the 7,000 residents in Whiting will collect more tax dollars from BP.
That's because the company is investing nearly $4 billion toward an expansion and modernization effort at the refinery.
Stahura used to work at the refinery himself and he's excited about the expansion.
But ever since the BP explosion in the Gulf, Stahura's been a little nervous.
STAHURA: When something of that nature, that magnitude happens, you, of course, always have concerns. I guess I didn't have any actual fear that they would actually scrap the project but I do know that businesses have to look at their capital side of the equation and that it may have impact someway or another down the road.
When you walk down 119th Street in downtown Whiting, there are small shops, restaurants and an overall small town feel.
But as you walk north toward the entrance of BP, you quickly begin to notice an antifreeze-type smell emanating from several gas flares in the sprawling BP Refinery campus.
Both BP and the governor of Indiana have called the $3.8 billion project the largest private investment in the history of Indiana.
Company officials announced plans three years ago to “modernize” the 119-year-old facility.
It was first built by John D. Rockefeller as Standard Oil Company back before the invention of the automobile.
Later the company would be called Amoco, then BP Amoco. Now, it's just BP.
Construction on the modernization started about two years ago. Some 3,500 contractors are working so that the refinery will eventually process much more of what's considered heavier, dirtier crude.
That oil is piped in from what's known as the tar sands in Alberta, Canada. Refinery spokesman Brad Etlin says the project should be completed in two years.
ETLIN: Years of planning has gone behind this project. We're 50 percent complete right now. This project is moving forward.
Etlin says the millions of dollars BP is spending on the Gulf clean up effort should not impact the company's investment in the Whiting Refinery.
ETLIN: We have full confidence in this project. We have the company behind us. We're invested in this community and we're invested in keeping 1,700 full-time employees to work.
Clean up costs aside, there's also cost to BP's image for safety at its facilities and in how it protects the environment.
ALEXANDER: Over and over, we've seen BP act as a very cheap company. They have been cheap in their approach to safety and cheap in their approach to the environment.
Ann Alexander is senior attorney for the Chicago office of the Natural Resources Defense Council in Chicago.
The NRDC has been challenging BP's expansion in Whiting. It claims the expansion is going to mean an increase in air pollution emissions that BP is not accounting for.
The U.S. Environmental Protection Agency plans to review air permits approved by the Indiana Department of Environmental Management.
BP's expansion was also a catalyst for a fight three years ago. The NRDC argued that the expansion would lead to more pollution into Lake Michigan.
Although Indiana environmental officials approved a permit allowing BP to discharge higher amounts of pollution into the lake, pressure from the public and Chicago area politicians, forced BP to back away from the higher amounts.
The NRDC's Ann Alexander says there are similarities between what's happening in the Gulf, in Whiting and even at a BP refinery in Texas where an explosion killed 15 workers five years ago.
ALEXANDER: It's difficult to say what specific impact the Gulf spill will have on BP Whiting. What we do know in both cases is that BP very sharply and steeply cut corners. They cut corners on the environment and safety in order to enhance the speed of their projects and the profit that they expected to make. In both cases the results are severely problematic to say the least.
BP officials defend the company's safety record.
In the past 10 years, the company claims injury rates have been reduced by 75 percent.
Months after the ‘05 explosion in Texas, the company said it would invest a billion dollars to improve the refinery there.
In a statement before Congress this month on the Gulf emergency, the chairman of BP America said it's inappropriate to draw any conclusions before all the facts are known about what caused the explosion on the oil rig.
Just down the road from the Whiting Refinery near the city's community center, I speak with Thomas Frank, an urban planner who lives in neighboring East Chicago.
Frank is among the few Northwest Indiana residents who objected to BP's expansion during local air and water permit hearings.
Most residents around here are for the project because of the construction jobs it brings, of even greater importance during the recession.
Frank once served as chairman of the East Chicago Waterway Management District, which oversees dreading of the polluted Indiana Harbor and Ship Canal.
BP, along with neighboring steel companies, helped contribute to the canal's polluted condition.
Frank says BP's experience with the Gulf disaster may lead to both positive and negative outcomes for Whiting.
FRANK: Maybe we can get more stringent safety controls and environmental controls. But also, it's going to stress the system. If there's pressure to pull off offshore wells offline, that will be put more dependence on the Alberta tar sands, which is a much higher, much dirtier process. So, if we're putting pressure on that system, there's going to be an increase in gas prices and there's going to be pressure to lower environmental standards and I have concerns about that.
Over at the Whiting Refinery, Brad Etlin says BP is committed to both protecting the environment and safety.
ETLIN: We're going to get to the bottom of what happened in the Gulf. You know, here, we're continued focused on the safe operation of the refinery. Again, safety is number one. We're going to ensure anything that we do here is safe or we're going to stop that work and that is our primary goal.
Etlin says work at the BP Whiting Refinery will ramp up next year in what's expected to be the last full year of construction.
Joe Stahura can look outside his office window and see the nation's largest in-land refinery just a few blocks away.
Stahura is the mayor of Whiting, Indiana.
He knows first hand of just how important BP's Whiting Refinery is to his city off the shores of Lake Michigan.
STAHURA: Right now, they are approximately 50 percent of our tax base.
That means BP pays for half of everything in the city of Whiting, from the public schools, police and fire, to the mayor's salary.
Soon, the 7,000 residents in Whiting will collect more tax dollars from BP.
That's because the company is investing nearly $4 billion toward an expansion and modernization effort at the refinery.
Stahura used to work at the refinery himself and he's excited about the expansion.
But ever since the BP explosion in the Gulf, Stahura's been a little nervous.
STAHURA: When something of that nature, that magnitude happens, you, of course, always have concerns. I guess I didn't have any actual fear that they would actually scrap the project but I do know that businesses have to look at their capital side of the equation and that it may have impact someway or another down the road.
When you walk down 119th Street in downtown Whiting, there are small shops, restaurants and an overall small town feel.
But as you walk north toward the entrance of BP, you quickly begin to notice an antifreeze-type smell emanating from several gas flares in the sprawling BP Refinery campus.
Both BP and the governor of Indiana have called the $3.8 billion project the largest private investment in the history of Indiana.
Company officials announced plans three years ago to “modernize” the 119-year-old facility.
It was first built by John D. Rockefeller as Standard Oil Company back before the invention of the automobile.
Later the company would be called Amoco, then BP Amoco. Now, it's just BP.
Construction on the modernization started about two years ago. Some 3,500 contractors are working so that the refinery will eventually process much more of what's considered heavier, dirtier crude.
That oil is piped in from what's known as the tar sands in Alberta, Canada. Refinery spokesman Brad Etlin says the project should be completed in two years.
ETLIN: Years of planning has gone behind this project. We're 50 percent complete right now. This project is moving forward.
Etlin says the millions of dollars BP is spending on the Gulf clean up effort should not impact the company's investment in the Whiting Refinery.
ETLIN: We have full confidence in this project. We have the company behind us. We're invested in this community and we're invested in keeping 1,700 full-time employees to work.
Clean up costs aside, there's also cost to BP's image for safety at its facilities and in how it protects the environment.
ALEXANDER: Over and over, we've seen BP act as a very cheap company. They have been cheap in their approach to safety and cheap in their approach to the environment.
Ann Alexander is senior attorney for the Chicago office of the Natural Resources Defense Council in Chicago.
The NRDC has been challenging BP's expansion in Whiting. It claims the expansion is going to mean an increase in air pollution emissions that BP is not accounting for.
The U.S. Environmental Protection Agency plans to review air permits approved by the Indiana Department of Environmental Management.
BP's expansion was also a catalyst for a fight three years ago. The NRDC argued that the expansion would lead to more pollution into Lake Michigan.
Although Indiana environmental officials approved a permit allowing BP to discharge higher amounts of pollution into the lake, pressure from the public and Chicago area politicians, forced BP to back away from the higher amounts.
The NRDC's Ann Alexander says there are similarities between what's happening in the Gulf, in Whiting and even at a BP refinery in Texas where an explosion killed 15 workers five years ago.
ALEXANDER: It's difficult to say what specific impact the Gulf spill will have on BP Whiting. What we do know in both cases is that BP very sharply and steeply cut corners. They cut corners on the environment and safety in order to enhance the speed of their projects and the profit that they expected to make. In both cases the results are severely problematic to say the least.
BP officials defend the company's safety record.
In the past 10 years, the company claims injury rates have been reduced by 75 percent.
Months after the ‘05 explosion in Texas, the company said it would invest a billion dollars to improve the refinery there.
In a statement before Congress this month on the Gulf emergency, the chairman of BP America said it's inappropriate to draw any conclusions before all the facts are known about what caused the explosion on the oil rig.
Just down the road from the Whiting Refinery near the city's community center, I speak with Thomas Frank, an urban planner who lives in neighboring East Chicago.
Frank is among the few Northwest Indiana residents who objected to BP's expansion during local air and water permit hearings.
Most residents around here are for the project because of the construction jobs it brings, of even greater importance during the recession.
Frank once served as chairman of the East Chicago Waterway Management District, which oversees dreading of the polluted Indiana Harbor and Ship Canal.
BP, along with neighboring steel companies, helped contribute to the canal's polluted condition.
Frank says BP's experience with the Gulf disaster may lead to both positive and negative outcomes for Whiting.
FRANK: Maybe we can get more stringent safety controls and environmental controls. But also, it's going to stress the system. If there's pressure to pull off offshore wells offline, that will be put more dependence on the Alberta tar sands, which is a much higher, much dirtier process. So, if we're putting pressure on that system, there's going to be an increase in gas prices and there's going to be pressure to lower environmental standards and I have concerns about that.
Over at the Whiting Refinery, Brad Etlin says BP is committed to both protecting the environment and safety.
ETLIN: We're going to get to the bottom of what happened in the Gulf. You know, here, we're continued focused on the safe operation of the refinery. Again, safety is number one. We're going to ensure anything that we do here is safe or we're going to stop that work and that is our primary goal.
Etlin says work at the BP Whiting Refinery will ramp up next year in what's expected to be the last full year of construction.
