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U.S. Senators threaten to block BP Whiting air permit

Jul 24, 2007


Dow Jones News Wires (by way of Hoosier-Topics listserv) 

By Ian Talley and Jessica Resnick-Ault 

WASHINGTON (Dow Jones)--A bipartisan group of U.S. senators, including the Majority Whip, on Tuesday threatened to block approval of an air permit for BP that is required to expand the company's Whiting, Ind., refinery unless the company changed its plans to dump toxic chemicals into Lake Michigan.

Still, the London-based oil giant said it is not backing down from the project. 

The senators said they were opposed to a dumping permit that state authorities have already approved and would use any means necessary to block the expansion plans until an alternative was developed. 

Majority Whip Dick Durbin, D-Ill., said BP America Inc. Chairman and President Robert Malone and other company officials agreed to try and develop an alternative and would meet again Sept. 1. The permits, he said, were required for the company to expand the plant's gasoline output by 15% by 2011, and increase its ability to process heavy Canadian crude oil. 

"We told them point blank if they do not work to protect Lake Michigan, they're in for a battle," Durbin said. "They got a wake up call, and they understand that on a bipartisan basis congressional delegations around Lake Michigan are determined to protect that lake."

Durbin said he and his colleagues said they would press the state authorities to review the water permit with the potential for revoking it. 

However, the company said it had worked closely with environmental groups and permitting agencies to obtain the water permit, and would follow all stated procedures for obtaining the air permit as well. 

A 60-day comment period was held from March to May, allowing time for objections to the permit to be voiced. New opposition to the permit surfaced after the final version was issued July 9, sparked in part by a high-profile story in the Chicago Tribune. 

"We have totally followed the process outlined by the regulators, and we're just looking to be treated fairly by the regulatory system," said Scott Dean, an Illinois-based company spokesman. 

The refinery currently processes 410,000 barrels a day of crude. The $3 billion expansion project, which the company refers to as a "modernization," would not increase the crude throughput, but would raise the plant's gasoline output 15% to 620 million gallons a year. 

The senators' effort to block BP's expansion illustrates the difficulty American refiners face, Dean said. "What this really shows is why it's so difficult to modernize or expand a refinery in this country - let alone build a new one," he said. No new refineries have been built in the U.S. since the 1970s. Despite the permitting difficulties.  

Dean says BP plans to continue to move forward on the project.

Dean said that the senators' effort to block the plan was not seen as a direct retaliation against BP for its many operational problems in the U.S. 

The company's latest troubles have been at the Whiting plant itself, which has been at reduced rates since March 2007, owing to a fire and difficulty completing a maintenance project. The refinery has been running about 240,000 barrels a day of crude, just above half of its regulated capacity. It is not expected to return to full capacity until the first half of 2008.


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