Top Chicago and Illinois officials are hoping new regulations and a legal deal announced on Thursday will crack down on the storage of petroleum coke on the city’s Southeast Side.

Mayor Rahm Emanuel and Illinois Attorney General Lisa Madigan say they’ve struck an interim legal settlement with Hammond, Ind.-based Beemsterboer, Inc., which has been storing so-called “petcoke” and other heavy industrial byproducts near residential neighborhoods.

Petcoke is a dust-like byproduct of the crude oil refinery process. It had been stored in mountainous, black piles along the Calumet River on the Southeast Side until residents began complaining last August of health problems and demanding its removal.

“[They’ve] been stored there without really any sufficient protections to prevent that dust from blowing into the nearby residential community, literally covering people’s homes, covering their cars, covering their playgrounds - literally covering people when they go outside,” Madigan said.

Additionally, Emanuel on Thursday announced new city regulations that would require large storage facilities to completely cover their piles of petcoke so they aren’t windblown into adjacent neighborhoods. Smaller storage sites would simply have to block the piles from the wind.

Emanuel acknowledged Chicago and Illinois are behind the ball compared to places like Indiana and California, which imposed tougher petcoke regulations years ago.

“We didn’t do our job, and thank God for community leaders…who spoke up, demanded action, and we’re now catching up to where we should have been years ago,” Emanuel said.

But Thursday’s actions do not mean the end of petcoke storage on the city’s Southeast Side. Much of the material comes from BP’s refinery plant in Whiting, Ind., which currently produces 2,000 tons of petcoke per day. A new expansion of the plant will triple that output.

Beemsterboer, Inc. did not immediately return a phone call for comment. Another company that stores petcoke for BP, called KCBX Terminals, is not affected by Thursday’s legal settlement but said it is reviewing Emanuel’s proposed regulations.

BP contracts with KCBX Terminals, a firm located on Chicago’s Southeast side and owned by the politically connected Koch brothers. The pet coke is trucked from Whiting to KCBX for temporary storage.

“KCBX has handled bulk materials, including petroleum coke, on Chicago’s southeast side for more than 20 years,” spokesman Jake Reint said in a statement on Thursday. “We are committed to doing the right thing and managing our operations in a manner that protects the health and safety of our neighbors.”  

Both companies are also facing suits from private attorneys representing residents who claim their health has been affected by the pet coke.

Democratic Illinois U.S. Senator Dick Durbin visited the area this week with Democratic U.S. Rep. Robin Kelly. Some in Chicago’s City Council have introduced bills calling for an all-out ban on pet coke in the city, but Emanuel rejected that idea on Thursday.

“The idea that you can ban it - I’m not sure will do the protection that you need to do, and immediately would be thrown out in court and we would be no closer,” Emanuel said.

Meanwhile, BP’s Scott Dean says the company has no plans to stop contracting with KCBX. He says it’s up to the company to safely store and contain the material. Dean says BP is encouraged to hear KCBX has installed a $10 million dust suppression system.

Alex Keefe is political reporter at WBEZ. You can follow him on Twitter and Google+. Follow WBEZ Northwest Indiana bureau reporter Michael Puente on Twitter @MikePuenteNews and on Facebook.