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American Refineries Getting Ready for Dirty Tar Sands Oil

Residents of polluted neighborhoods watch warily as local refineries prepare to process Canadian crude.

| Wed Oct. 31, 2012 6:03 AM EDT

The Marathon refinery in Detroit has nearly finished a $2.2 billion expansion that will allow it to process more high-sulfur tar sands crude from Canada.

This story first appeared on the website of the Center for Public Integrity.

In an economically distressed pocket of southwest Detroit known by its ZIP code—48217—the weekend of September 7-9 was one of the worst, pollution-wise, residents like Theresa Shaw could remember.

"I started smelling it on Thursday," said Shaw, who immediately suspected the Marathon Petroleum Co. refinery a half-mile from her house. "I kept the windows closed because I couldn't breathe. On Friday, I thought, 'What the heck are they doing?' My eyes were just burning, my throat was hurting, my stomach was hurting. I was having migraine headaches.

"The smell, it was like this burning tar, with that benzene and that sulfur. I wanted to scream."

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Shaw retreated to her sister's house on the north side of town. Responding to citizen complaints, the Michigan Department of Environmental Quality traced the powerful odor to Marathon, which had been cleaning several large vessels, and wrote up the company for a nuisance violation.

Marathon says it is "committed to environmental responsibility" and acted quickly to correct the odor problem, a byproduct of plant maintenance.

Yet the episode further eroded residents' trust in the company and underscored their fears about a $2.2 billion refinery expansion that will allow Marathon to process more high-sulfur Canadian crude oil.

The build-out, nearly complete, won't add to the air pollution burden, Marathon promises. In fact, the Ohio-based company vows, emissions of some pollutants will go down and job numbers will go up.

Shaw doesn't buy it. "They've disrespected us in this neighborhood over and over and over again," she said.

The conflict in southwest Detroit is one piece of a larger environmental struggle being waged in communities nationwide. At the core of the debate: Plans by a number of oil companies to step up refining of heavier, dirtier crude, much of it from Alberta's tar sands formation, a deposit whose reserves are eclipsed only by the vast Saudi Arabian oil fields.

From the Great Lakes to Texas, people in already polluted neighborhoods are watching warily as refineries grow to accommodate the Canadian oil. Thus far, much of the controversy over tar sands has centered on the environmental damage caused by extraction and the risks of a spill from the proposed Keystone XL pipeline, which would carry the fuel to Gulf Coast refineries.

But the next stage in the process has been largely overlooked: The oil has to be refined somewhere.

Heavy oil from Canada is already reaching Marathon and other refineries. Between 2006 and 2011, imports of such crude more than tripled.

Heavy oil from Canada is already reaching Marathon and other refineries. Between 2006 and 2011, imports of such crude more than tripled, a Center for Public Integrity analysis of data from the US Energy Information Administration found.

Some worry that government approval of Keystone XL would accelerate this trend, providing wider access to tar sands. Construction has begun on the southern portion of the pipeline, between Oklahoma and Texas, but the northern section is on hold pending further analysis by the US Department of State. The thick, asphalt-like crude, known as bitumen, requires more processing than lighter forms of oil, which could lead to increases in pollution if not controlled. The burden would fall most often on communities, like southwest Detroit, populated mainly by low-income people of color.

The Environmental Protection Agency expressed concern about this prospect in June 2011. Commenting on a draft State Department environmental assessment of Keystone XL, the EPA urged the department to "provide a clearer analysis of potential environmental and health impacts to communities from refinery air emissions and other environmental stressors."

Yet the EPA has conducted no evaluations of its own and isn't keeping track of the refinery expansions around the nation, an agency spokeswoman said in a statement to the Center.

The State Department has looked only at the possible impacts of Keystone XL and maintains there is no evidence that the pipeline's potential approval has prompted any of the current refinery expansions. The department referred Center inquiries to its published evaluations, one of which says significant expansions should trigger rules requiring refiners to install better pollution control equipment.

Some advocates contend, however, that companies are underestimating the projects' air impacts in an attempt to avoid such requirements.

"This has all been done very quietly in the regulatory backrooms, and people aren't aware of it," said Josh Mogerman, who tracks developments related to tar sands for the Natural Resources Defense Council. "These refineries have a lot of problems, and it's hard to believe that's going to get better by moving to process one of the dirtiest fuels on the planet."

Two trade groups representing the oil industry, the American Petroleum Institute and the American Fuel & Petrochemical Manufacturers, did not respond to interview requests, but both have supported increased use of tar sands, arguing that America would benefit economically and secure a more stable energy source.

"Sacrifice zones"

"It’s like a Frankenstein lab experiment," 48217 resident Theresa Landrum says of living with air pollution from the Marathon refinery.   Kirk Allen"It’s like a Frankenstein lab experiment," 48217 resident Theresa Landrum says of living with air pollution from the Marathon refinery. Kirk AllenTypically, the refinery expansions are unfolding in places that have long suffered from air and water pollution.

At the end of the proposed Keystone XL pipeline, for example, lie hazy Gulf Coast cities dominated by the petrochemical industry. Last year, the mayor of Houston wrote the State Department, expressing concern that oil companies' easy access to tar sands could lead to further deterioration of air quality. Refineries in nearby Texas City and Port Arthur have expanded or are in the process of doing so.

"These communities become the sacrifice zones,"said Leslie Fields, the Sierra Club's environmental justice and community partnerships director in Washington, D.C. "They will never be availed of any kind of green, sustainable, clean future. This is where [industries] are forever going to be expanding."

Health worries abound, with particular concern over asthma and cancer.

In July, the Michigan Department of Community Health announced the preliminary results of a study of 48217 and three other ZIP codes in southwest Detroit: Rates of newly diagnosed cases of cancers of the lung and bronchus were "significantly higher" than those in the rest of the state outside of Wayne County (which includes Detroit), the department said, as were death rates.

"It's like a Frankenstein lab experiment," Theresa Landrum, a community leader and cancer survivor, said of the airborne chemicals that pour from industry in or near 48217—including volatile organic compounds, many of which are carcinogens, and sulfur dioxide, a respiratory irritant. "We actually are lab rats."

Indeed, data submitted by Marathon to state regulators show that emissions of volatile organic compounds from the refinery increased by 36 percent from 2009 to 2011. The company declined to comment on the increase, saying only that it had obtained "all the necessary permits" for its air emissions from the Michigan Department of Environmental Quality.

The refinery expansion in Detroit had its genesis in 2007, when the City Council agreed to give Marathon a $175 million, 20-year tax abatement. The company played Detroit off against two other cities in which it operated refineries, St. Paul Park, Minn., where it has since sold its plant, and Robinson, Ill. "Overall," Marathon warned in one communication with the city, "the system of property taxation is more favorable for refinery investment in Illinois and Minnesota, as compared to that in Michigan and the City of Detroit."

In exchange for the tax break, Marathon promised to create 60 full-time refinery jobs and 75 full-time contractor jobs, which, it said, collectively would add $16.5 million to the annual $74 million payroll. Even with the abatement, Marathon said, the city would reap $230 million in new tax revenue through 2030. In much the same way, the American Petroleum Institute has promoted the use of tar sands as an economic boon to the United States that would lead to thousands of new jobs.

Marathon's plan was an easy sell in one of America's most desperate urban areas. Whether it was a good deal remains to be seen.

Marathon Petroleum Co. says it has been, and will continue to be, a good neighbor, but some who live near the refinery are skeptical. “They’ve disrespected us in this neighborhood over and over and over again,” says one resident. Kirk AllenMarathon Petroleum Co. says it has been, and will continue to be, a good neighbor, but some who live near the refinery are skeptical. “They’ve disrespected us in this neighborhood over and over and over again,” says one resident. Kirk Allen"It can't just be about jobs," said state Rep. Rashida Tlaib, a Democrat who represents the neighborhoods around the refinery. "My residents and I feel that jobs can't fix cancer. It has to be about the fact that this massive refinery is living next to a very poor, minority community in Detroit with no real protection. When my residents hear sirens, they cross their fingers and hope it's not some sort of huge explosion.

"They don't feel like the city or the state has done everything in their power to hold the company accountable."

City Councilman Kwame Kenyatta said he was annoyed that a Marathon representative failed to appear Oct. 1 before the council's Public Health and Safety Committee, which was seeking information on a Sept. 5 refinery fire.

"They always have someone at the table when there's an issue of them applying for a tax credit or some other incentive that they want from the city," Kenyatta said. "But when it's time for the citizens to get their questions answered and their safety issues addressed, there's no one there."

In a statement to the Center, Marathon said it "did not receive adequate notification" of the Oct. 1 committee meeting. The company attended a rescheduled meeting two weeks later and described the Sept. 5 fire as small, saying one employee suffered minor injuries.

Kenyatta said he agreed to the 2007 tax abatement only after Marathon promised to share some of the economic benefits of the refinery expansion with the community.

"I think that Marathon has not been that good of a corporate neighbor to the people in southwest Detroit," the councilman said. "There were some promises made to train and hire people from the area. Based on the information I've gotten back, that did not happen."

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