Message from the President

August 15, 2007

BP’s Lake Michigan Controversy

In the past few weeks, considerable media coverage, public discourse and hyperbole from Illinois politicians have spotlighted BP’s plans to invest more than $3 billion to modernize and expand its Whiting, Indiana refinery. There’s certainly nothing wrong with shedding light on this issue. Water quality and public safety are legitimate environmental concerns that deserve vigilance. It’s important for the public to know one of our greatest assets, Lake Michigan, is being adequately protected. The public deserves assurance that companies are constantly upgrading processes and applying improved technology.

That’s why we have state and federal laws and permit processes. That’s why there is an extensive, thorough and highly-scrutinized regulatory system for everyone who discharges water into Lake Michigan, industrial plants as well as municipalities. That’s why there is monitoring and reporting. That’s why there has been constant measurable environmental improvement over the last thirty years.

But what’s being lost in the debate – in addition to the fact that BP’s wastewater discharge is 99.9% water and not “sludge” as reported – is the double-standard being applied by grandstanding politicians to a “big oil” company. They say they aren’t against the project, but that BP has to “do better”. Do better than what? Better than the environmental laws and regulations that govern the project, with which the company has fully complied? Embracing environmentalism and making “big oil” out to be a villain may be good politics, but is bad practice.

Think about it. Last year BP announced very publicly a tremendously positive investment in its premier Midwest facility to reconfigure the historic refinery so it can process oil from Canada, and increase capacity to bring products – including gasoline -- to the marketplace. BP began the permitting process with the appropriate authorities; for the water permit, that was Indiana’s Department of Environmental Management and the US EPA. BP followed the rules and did everything they were supposed to do to minimize discharge into the lake.

BP’s permit meets or exceeds all requirements in place to protect human health and the environment. The permitted ammonia discharge level will be less than half that allowed by federal guidelines. The amounts of released microscopic particulate matter are not harmful.

BP has broken no laws. BP completed a year-long intense overview process including two months of public hearings. The company has more than complied with the laws, the rules, the administrative process, engineering specifications, scientific reporting, and the thorough, professional regulatory process.

Now that BP holds the permit, some elected officials, environmental groups and commentators are criticizing and demanding BP satisfy an arbitrarily higher standard than that required by law or regulation.

The issue that must not go unchallenged by employers is this: why should it be acceptable to apply a double standard to environmental permitting? This is not about BP. This is about ignoring the law and seeking to interject vigilante politics to disrupt or halt an already authorized project. Should this company, or any company, having followed all the rules and meeting or exceeding existing regulations be subject to an arbitrary “you have to do better” demand from non-expert politicians intent on gaining the attention of voters? Politicians not responsible for building or operating a successful business have few qualms about adding time, worry, expense and misery to employers who are already required to go to great lengths to comply with federal, state and local laws and regulations.

Every owner, operator, manager, investor, construction contractor, engineer and planner should have confidence and satisfaction that governments with jurisdiction over their projects provide a reliable, predictable and stable process under which to work. It should be reasonable to expect equal protection under the law with every project handled fairly, consistently and in a timely manner. Whether the project is a multi-billion dollar investment to modernize a refinery or a small office addition, taxpayers deserves consistent treatment.

The current assault on BP is an affront to our basic sense of fairness. Every business should recognize the application of a double standard and desire to use government power to manipulate or change the rules after the fact is not merely a threat to “big oil”, but is indeed a challenge to all.

Proposed amounts of total suspended solids and ammonia that would be discharged from the reconfigured BP refinery are very similar to those for a small city. Numerous municipalities discharge wastewater directly into Lake Michigan, other Great Lakes, or to rivers. All of these communities discharge many of the same particles and chemicals and many, like Racine and Milwaukee, Wisconsin, discharge at levels far higher than the limits in BP’s permit.

For additional perspective, the City of Chicago's Calumet wastewater facility discharges six to nine times more ammonia every day into the Chicago Sanitary and Ship Canal (which flows into the Illinois and Mississippi Rivers) than BP's new permit allows. If BP has to “do better,” why shouldn’t municipal sanitary districts? After all, shouldn’t our elected officials who have demonstrated their eagerness to berate private industry be equally engaged in demanding prompt elimination of polluting emissions from government entities?

If members of Congress want a different standard they can change the law, but let the standard be uniformly applied to public and private facilities alike.

This dust-up is another excellent example of how Illinois politicians’ actions and rhetoric continues to reinforce the message that our state is anti-business.

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