EPA: Indiana must rewrite BP refinery air permit

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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."

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.

"It could change or it could remain the same.
We don’t know until the analysis is done," said Jay Bortzer, chief of the air programs branch of the EPA’s Chicago office.

IDEM spokesman Robert Elstro said Monday the agency will use the next three months "to evaluate the available
options and consider the appropriate response to the order."

The EPA’s order denied some of the environmental
groups’ claims, including concerns about the venting of uncontrolled pressure relief valves and added controls for greenhouse
gas emissions.

BP says the refinery expansion is on pace to be finished in early 2012. The project will boost its
production of gasoline, diesel fuel and jet fuel 15 percent to about 4.7 billion gallons a year.

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