BP reaches $2.75M deal over Indiana refinery pollution

BP will pay $2.75 million to settle another lawsuit accusing the company of emitting illegal amounts of lung-damaging soot at its Whiting refinery in northwest Indiana, just across the state border from Chicago.

A proposed agreement filed Thursday in U.S. District Court in Hammond requires the London-based oil giant to deposit $1.75 million into an account the federal government draws upon to pay for air quality monitoring and Clean Air Act enforcement.

The rest of the money paid by BP will be split evenly. A nonprofit conservation group will use its share to plant trees near the refinery, while local school districts will install or replace air filters in classrooms.

Built on the southwest shore of Lake Michigan in 1889 by Standard Oil, the Whiting refinery is one of the biggest sources of air pollution in the Chicago area.

During the past two decades, BP has repeatedly been targeted by the U.S. Environmental Protection Agency and nonprofit groups that occasionally step in when government investigators fail to act.

The latest lawsuit, filed by the Environmental Integrity Project on behalf of the Sierra Club, hinged on the results of nine pollution tests BP provided to the Indiana Department of Environmental Management between 2015 and 2018. In eight of the tests, the refinery’s boilers released concentrations of particulate matter, commonly known as soot, that exceeded permitted limits.

State regulators declined to take action. But after reviewing the state’s data, U.S. District Court Judge Philip P. Simon ruled last year that BP violated the Clean Air Act by failing to fix the problems.

“We are thrilled to see BP held accountable for its dangerous pollution and lack of regard for our communities,” Amanda Shepherd, director of the Sierra Club Hoosier Chapter, said of the proposed settlement.

Lawyers for BP argued with the plain language of federal law and claimed three Sierra Club members who live near the refinery could not prove its pollution is harmful. Simon scoffed at the company’s defenses, calling them an attempted “end run around the obvious violations.”

Carolyn Marsh, who lives less than a mile from the refinery, described noxious odors, loud noises and huge flames shooting out of the refinery’s flares. Marsh and two other neighbors told a federal magistrate they often are driven indoors by fumes that trigger a burning sensation in their throats.

The Whiting refinery is the nation’s sixth largest, with a capacity to process more than 400,000 barrels of oil a day.

Just nine years ago, BP agreed to spend $400 million to resolve earlier complaints about pollution from the refinery.

At the time, federal regulators accused BP of violating a 2001 legal agreement about pollution problems at the Whiting plant. The EPA cited the company for repeatedly exceeding emissions limits on flares that shoot out harmful chemicals during frequent malfunctions.

Under another legal settlement brokered in December 2021, BP paid the federal government more than $500,000 for releasing illegal amounts of soot from catalytic crackers — massive arrays of equipment that help turn crude oil into gasoline and other fuels.

Echoing court filings that led to the deal announced Thursday, environmental groups based their lawsuit on results from the company’s own testing.

mhawthorne@chicagotribune.com