EPA: Indiana Must Rewrite BP Refinery Air Permit

Federal officials ordered Indiana on Monday to rewrite an air permit for BP PLC's Whiting refinery, concluding the state may not have fully assessed all the new emissions a big expansion of the refinery will produce.

The U.S. Environmental Protection Agency's decision means Indiana has 90 days to conduct a new air emissions analysis and submit to EPA a revised air permit for the refinery, which is in the midst of $3.8 billion expansion along Lake Michigan.

Members of the five environmental groups who petitioned the EPA in August 2008 to review the permit declared the agency's decision a victory for Indiana residents, particularly those who live near the refinery about 20 miles southeast of downtown Chicago.

"EPA recognizes what we've been telling BP and the state all along — this refinery expansion is clearly going to dump additional pollution on the surrounding communities, and the law requires BP to control it," said Ann Alexander, senior attorney for the Natural Resources Defense Council.

The EPA asked Indiana officials to re-examine, among other emission sources, the pollutants released by the project's flares, which are tall chimney-like structures that burn off waste substances. It also asked the Indiana Department of Environmental Management to analyze emissions from a variety of new equipment the refinery will use in its new role as a top processor of thicker, high-sulfur crude taken from Canadian tar sands.

When the EPA approved the project's previous air permit in 2008, it concluded the added emissions would not rise above a certain threshold that would require declaring those changes a "major modification."

Such a declaration would mean BP would have to install additional, potentially costly, pollution control devices or take other steps to reduce emissions and meet Clean Air Act requirements.

The EPA's order that Indiana regulators mount a new emissions analysis and answer its concerns in a revised permit raises the possibility that the project could be declared a "major modification," depending on IDEM's findings.