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Water fight could sink BP refinery plans
The environmental threats to future oil supplies in the United States are not confined to Canada’s side of the 49th parallel.
BP America has served notice that its plans for a $3.8 billion expansion of its Whiting, Ind., refinery, to handle another 245,000 barrels per day of Canadian heavy crude is in jeopardy because of public resistance to increasing ammonia and metals discharges into Lake Michigan.
Bob Malone, BP America chairman and president, said the regional opposition to higher discharge permit limits “creates an unacceptable level of business risk” for the proposed investment.
Although the company said it does not intend to make use of an increase in permitted discharge levels, the plant upgrade is under attack from environmental groups and politicians.
Malone said BP will “work hard to make this project succeed” and will continue over the next 18 months to obtain other permits, continue with project design work and seek options for operating within the lower discharge limits.
But he said the company is “not aware of any technology that will get us to those (lower) limits.”
“If necessary changes to the project result in a material impact to project viability, we could be forced to cancel it,” Malone warned.
BP working on technology BP has already pledged to work with Purdue-Calume Water Institute and the Argonne National Laboratory in a bid to identify and evaluate emerging technologies with the potential to improve wastewater treatment in the Great Lakes. It will contribute $5 million to underwrite a research effort at Purdue University.
The expansion, scheduled for completion in 2011, is one of the pivotal undertakings needed to take increased volumes from the Alberta oil sands.
It is designed to add capacity for coking, hydrogen production, hydrotreating and sulfur recovery.
The replacement processing units and enhancements to existing refinery units is designed to increase the percentage of Canadian heavy crude processed at the 405,000 bpd refinery to 90 percent from the current 30 percent for total heavy crude capacity of about 365,000 bpd from the current 120,000 bpd, adding 1.7 million gallons per day to fuel output.
The Indiana state government granted a permit in June allowing the plant to dump 54 percent more ammonia and 35 percent more suspended solids containing metals and other minerals into Lake Michigan.
Indiana Gov. Mitch Daniels said he hoped technology could be developed in the next year to save the project and the related economic benefits.
But unless the “magic bullet” is found BP could be just the first of the United States’ major refiners — ConocoPhillips and Marathon also have ambitious plans to reconfigure plants to process more oil sands production — to find that the environmental cost of doing business outweighs what they hope will be high-return, strategic projects.
—Gary Park
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