The following story is an example of the ongoing stuggle that the community and the EPA is having with the governor's IDEM. BP is building an multi billion dollar addition onto the East Chicago oil refinery, which happens to be the oldest refinery in the US. This new addition is to process tar sand oil. Environmental groups around the area and country and many legislators have questions the whole process for permits that BP has gotten. There was little time for public comment and then BP and IDEM conspired to stack the meetings with people in favor of the building of the addition.

IDEM cut short permit process, e-mail suggests
(http://www.post-trib.com/news/1396176,bpmemo.article)

January 25, 2009

By Gitte Laasby

Post-Tribune staff writer

By insisting on processing the permit by June 1, regardless of what the U.S. Environmental Protection Agency said, IDEM also refused to help the EPA gather evidence that BP violated the law.

That's according to an e-mail obtained by the Post-Tribune.

Project 'dead' by June 1

When IDEM processed BP's permit application last spring, EPA had reason to believe BP had violated the Clean Air Act by emitting too much pollution. EPA said BP also modified a refinery unit before receiving a permit to do so. But EPA needed more evidence to prove it and wanted BP to agree to pay a fine for the violations. So EPA officials asked IDEM to help by not issuing the air permit until BP handed over the documents to EPA.

"They want us to hold up issuance of the permit until BP caves to whatever relief EPA would like(,) recognizing that BP must have the permit before June 1 or the entire project is dead," IDEM Commissioner Thomas Easterly said in an e-mail to Gov. Mitch Daniels' IDEM liaison, David Pippen, on Feb. 26, 2008.

Valparaiso environmental attorney Kim Ferraro wasn't surprised.

"It confirms what we knew; that they were really trying to push this thing through," Ferraro said.

IDEM rejected her request for more time to review BP's 1,351-page permit on behalf of residents, but granted her a 30-day extension to review a 100-page permit for a recycling company in Elkhart.

"When we ask about extensions of time, IDEM's usually pretty quick to say, 'We'll give you more time,' " she said. "It's completely inappropriate that you're trying to cut short a very needed public input into the process because you're trying to make it easy for the permittee."

Neither IDEM nor BP would directly answer who or what gave Easterly the idea that the project would be "dead" if the permit wasn't issued by June 1.

"All parties involved understood that the expiration of the emission credits would require portions of the permit to be re-evaluated," IDEM spokeswoman Amy Hartsock said in an e-mail.

BP received credits for reducing emissions of sulfur dioxide and fine particles at the Whiting refinery in 2003, earlier than required. The credits expire after five years. Using the credits allowed BP to avoid installing more stringent pollution control equipment or shutting down some of the polluting units to further reduce pollution.

BP spokesman Scott Dean wouldn't answer whether BP told IDEM the project would be dead by June 1. He referred to a 2008 company press release.

"If we do not have an air permit this year, some of our credits will expire and we will have to modify our permit application and recalculate the costs and timing of this proposed multibillion dollar, multiyear investment in the Midwest economy," the release stated.

Dean said BP reduced its overall air emissions by 68 percent between 2001 and 2006 and that credits help people get cleaner air sooner.

Hartsock said IDEM did help EPA with enforcement by providing documents EPA requested.

"You presume IDEM didn't want to help," Hartsock said in an e-mail. "IDEM simply wanted to follow case law recognizing long-standing EPA policy keeping permitting separate from enforcement."

Enforcement action

Easterly states in the e-mail that, "EPA's position seems to be that the permit cannot be issued until the enforcement action is resolved."

When authorities settle violations with a company, the agreement often requires the company to use new pollution controls to keep the violations from occurring again. Any such controls would be incorporated into a permit that was issued after the enforcement -- guaranteeing that BP?would emit less air pollution.

Ann Alexander, senior attorney with the Natural Resources Defense Council, said if BP started construction early on a project that would increase emissions over a certain threshold, BP would need "far more stringent" pollution controls than IDEM's permit required.

"It would mean cleaner air in the region," she said. "They want to make sure if someone is doing a large expansion project that is, in fact, going to increase emissions, that companies have to face up to that and put in the controls necessary to make sure the community doesn't end up paying the environmental cost of the expansion."

To force IDEM's cooperation, EPA gave IDEM an ultimatum: Hold the public comment period on the air permit open until BP and EPA settle the enforcement case, or EPA will make negative public comments on the draft permit. But EPA backed off just a month later.

IDEM said EPA's request that permitting and enforcement be resolved simultaneously was only the opinion of one person -- Cheryl Newton, the acting director of EPA Region 5's air division.

" 'EPA' did not give IDEM advice; a single person, referenced in your question, suggested action which would have been a change in long-established EPA policy and reinforced by the 7th Circuit Court of Appeals," Hartsock said in an e-mail. "EPA chose to follow its policy and the law and supplied IDEM with a letter confirming their approval of the permit."

EPA?would not comment. Spokeswoman Phillippa Cannon said EPA's two official comment letters on the BP permit summarize EPA's position on the overall permitting process and EPA's interactions with the state.

Change in EPA direction

Just one month after EPA?threatened to make negative comments on the permit, the agency backed off. In its comments, EPA pointed out only minor issues and requested that IDEM later add any details BP and EPA agreed on during enforcement.

NRDC's Alexander said as a result, the permit fails to address problems from the past and is based on "untenable" assumptions about emissions.

"Given that EPA had strong reasons to suspect there was a problem, they should have either gone to great lengths to demonstrate why there wasn't a problem or held off until it was resolved," Alexander said. "I don't think going ahead and issuing the permit without resolving the problem was a good solution."

Jane Jankowski, the governor's spokeswoman, denied that anyone from the governor's office interfered.

"The commissioner sent an e-mail to David Pippen, the governor's office liaison to IDEM," she said in an e-mail. "The governor's office took no action."

Contact Gitte Laasby at 648-2183 or glaasby@post-trib.com.