BP will spend more than $400 million to significantly reduce noxious air pollution from its massive refinery in northwest Indiana, the company announced Wednesday in a settlement with federal authorities and environmental groups that could set a precedent for oil companies nationwide.
Steps that BP agreed to take and equipment it promised to install at the nation's sixth-largest refinery should help relieve problems with lung-damaging soot and other air pollution throughout the Chicago area.
The deal resolves a nearly decade-long legal battle over a $3.8 billion upgrade and expansion of BP's Whiting, Ind., refinery to process heavy crude oil pulled from tar-soaked clay and sand in Northern Canada.
The Obama administration ordered a new look at the Whiting refinery in 2009 after the U.S. Environmental Protection Agency signed off on the project during the last months of President George W. Bush's administration.
Federal regulators accused BP of violating a 2001 legal deal over previous pollution problems and cited the company for repeatedly exceeding emissions limits on refinery flares that release harmful chemicals during frequent malfunctions.
Changes outlined in the consent decree, filed in U.S. District Court in Hammond, Ind., require the oil company to dramatically reduce flaring by capturing most of the pressurized gases, and to operate the flares more efficiently when they are needed.
A new cap on emissions, which federal regulators described as the most stringent to date for a U.S. refinery, is expected to reduce the Whiting plant's flaring by nearly 90 percent. Emissions of hazardous chemicals such as benzene, toluene and hydrogen sulfide will drop by about 4,000 tons annually.
Lawyers for the federal government and environmental groups targeted BP after the Indiana Department of Environmental Management awarded the company a new permit in 2008 that assumed the Whiting refinery's flares would emit virtually no toxic fumes when the expansion project was completed.
Critics said the permit was typical of Indiana's lax approach to BP. The state earlier had allowed BP to release more water pollution into Lake Michigan, but the company backed off after Chicago Tribune stories prompted a storm of protest from politicians and the public.
"This ground-breaking settlement will resolve a number of problems at the Whiting refinery that have negatively impacted the health of people in the surrounding area," said Susan Hedman, the EPA's top official in the Midwest. "It also sets a new standard for refineries throughout the country."
"We are pleased to have reached an agreement that protects jobs, consumers and the environment," said Steve Cornell, president of BP Products North America.
At the behest of environmental groups, BP will install new pollution monitors on the edge of each side of the refinery. The results will be posted online weekly, providing neighbors with more information about pollution that until now they were forced to guess about.
The company also will pay an $8 million fine, most of which will go to the federal government.
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