A lot at stake for BP in Whiting expansion
Just beyond Chicago’s southern border is Whiting, one of the smallest cities in Indiana with about 5,000 residents. But you’d never know it these days. That’s because thousands of construction workers descend upon the “Little City on the Lake” every day to head to the BP Refinery. The facility’s 100 years old now and is getting a multi-billion dollar makeover. There’s a lot at stake for BP’s finances and it’s environmental cred.
Remember when Soldier Field got its fancy makeover? Think about all the work that went into remodeling that stadium. They removed old seats, replaced the field, and put up a new scoreboard.
Now, imagine if all that happened while the Bears were playing and the fans were hooping it up and the tailgaters were in the parking lot. It would have been business as usual, except with dangerous machinery and construction workers all around. Well, that’s pretty much what’s happening at BP’s Whiting Refinery.
MOYE: We’re building the 6th largest refinery in North America inside the 4th largest refinery while it’s actually operating. That brings a lot of complexities to it and makes it a very exciting time.
That’s Dave Moye, BP’s Lakefront complex operation specialist in Whiting.
MOYE: A new refinery hasn’t been built in the U.S. since the 1970s I think. So, this is a significant modification to a refinery.
Moye’s a got a lot to back up that boast. BP’s expansion project will cost $3.8 billion, which makes it the largest private investment in Indiana history. Moye and other BP supervisors already keep track of their own 1,900 employees, but now they’re managing another 9,000 construction workers. And soon ... they’ll manage 1,000 more.
The size and scale of BP’s expansion project is hard to wrap your head around, so to get a better idea of it, I went on a tour. A process engineer named Ryan O’Leary was one of my guides.
O'LEARY: You can tell there’s a tremendous amount of activity around here. Contractors in and out. This is some of the heaviest construction in the area. Just here in our view, six, seven cranes. This will be carrying through in the next year.
O’Leary was quick to show off a lot of engineering muscle that’s gone into this, but he stopped to remind me several times that there’s more at stake for BP than just a makeover, or even short-term profits.
O’LEARY: This project gives us a future in the area that is defined, it is long term. It is a key project for BP’s sustainability in the United States and the world.
This is no exaggeration. BP’s environmental cred has been on the line because of that big oil spill in the Gulf of Mexico in 2010. But you might recall that this modernization project has already attracted environmental scrutiny. Five years ago, BP announced that the Whiting facility would refine a lot more heavy Canadian oil - a stickier, thicker kind of crude.
But when BP sought permits from the state of Indiana, environmental groups and Illinois congressmen stepped in. They worried the plant would release more mercury and ammonia pollution into Lake Michigan. And these critics hit the airwaves with radio ads and other tactics to stop the Whiting project.
BP felt the pressure, so it pledged to keep pollution going into Lake Michigan at current levels, even though the Whiting plant would be bigger and process dirtier oil. That environmental fight was several years ago. Now, the work of keeping BP’s environmental promises comes down to people like Ramachandra Achar, a water treatment specialist.
ACHAR: The mercury issue is a very significant technological challenge though. Much more difficult than any other that we have really faced in the past.
In fact, BP says it’s dedicating about $1 billion to cut down on mercury and other pollutants. That means one of every four dollars in the expansion project is for water treatment.
One reason for the big outlay is that BP is forced to used equipment that’s unique or nearly so. For example, it’s brine treatment unit is the first of its kind to be used in the U.S., and only the second worldwide. BP is also testing merging technologies – technologies that are not fully developed.
It’s getting help from Purdue University Calumet’s Water Institute in Hammond and Argonne National Laboratory in Chicago’s western suburbs. Dr. Cristina Negri researches pollution controls for Argonne. She’s helping to find technologies for BP to lower the amount of mercury that’s released into Lake Michigan.
NEGRI: The problem there is the concentrations are very tiny, very small. The technologies that were available had really were not been tested at those concentrations.
Negri says the nice thing is BP is taking on large-scale real world tests at the refinery. If the mercury pollution controls work, they might help other industries, or even city water treatment facilities release less mercury into the environment.
NEGRI: I think you won’t find anywhere else a study that’s so broad as far as mercury goes. You’re talking between us and Purdue we tested some 40 some technologies. It’s a lot.
Scientists and engineers aren’t the only people interested in whether BP can pull off an expansion, while keeping pollution in check. Envionrmental groups and local residents are, too.
Thomas Frank lives in East Chicago near the Whiting Refinery. Frank says it’s good BP’s spending so much money on environmental controls, but the expansion’s still not worth the risk.
FRANK: It shows there’s a dedication. They are going to try to leverage funds that they know there’s a problem. We have a hundred years of industrial legacy that is meant we are sitting on the most polluted waterway in the country (Indiana Harbor and Ship Canal) , it means our land is considered the most polluted and our airshed is the 9th most polluted in the country. The BP project adds to that complexity and the concentration of industry right here.
Frank’s sentiment is getting heard by BP officials, even ones at the top. Recently, the CEO, Bob Dudley, visited Chicago to talk about BP’s environmental record. It so happens Dudley’s a local guy. He grew up in west suburban Hinsdale, and he’s familiar with Whiting, Indiana.
Dudley took over BP after the Gulf Oil spill of 2010.
DUDLEY: Our reputation was in tatters. We had experienced a massive loss of public trust. We knew we had a responsibility to embed the lessons from this accident across BP worldwide. But in light of what had happened. We’ve committed to reinforcing our safety and risk management procedures globally everywhere.
Dudley told Chicago business people that the Whiting Refinery modernization is one example of how BP wants to get on track with cleaner technology. But, of course, that’s only a prediction right now. The BP refinery project won’t be done until the fall of 2013.