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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

Asked to comment, a Marathon spokesman referred a Center reporter to the company's website. The site says that Marathon, in consultation with the Detroit Workforce Development Department, "has created a workshop that will offer assistance to Detroit residents in taking pre-employment tests" and has committed to offering 10 community college scholarships per year for at least 10 years for those interested in refinery operator positions.

Marathon also says it plans to hire "as many Detroit residents…as possible" for the 75 contractor jobs it expects to add once the refinery expansion is completed.

Before it could start its expansion, Marathon had to secure a permit from the Michigan Department of Environmental Quality—the MDEQ.

On paper, the project looked like a winner. Marathon would be able to run more crude through its refinery, which opened in 1959, and new pollution-control equipment would reduce the poisons released into the air. Emissions of sulfur dioxide and volatile organic compounds, for example, would go down compared to current levels, Marathon said, though emissions of hydrogen sulfide—a gas known for its rotten-egg odor and potentially fatal in sufficient concentrations—would increase.

The MDEQ and EPA reviewed the permit and decreed that the project was not big enough to trigger federal "Prevention of Significant Deterioration" rules, which would have forced Marathon to install more controls.

The Sierra Club, invited by residents to intervene, won modest concessions from Marathon in 2008. The company agreed, among other things, to additional air monitoring and further emissions reductions.

"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. But when it's time for the citizens to get their questions answered and their safety issues addressed, there's no one there."

"At the time, I think it was the best we could do," said Rhonda Anderson, a Detroit-based organizer for the Sierra Club's environmental justice program. "The state had already given them their permit. They didn't have to do anything."

The state and the EPA say the pollution projections in Marathon's permit are credible, but others are skeptical—citing previous industry case studies.

"Funny math"

Five years ago, residents of Whiting, Ind., heard similar claims from BP: After it completed its nearly $4 billion refinery expansion to allow processing of more heavy crude, emissions of many pollutants would decrease, the company said. The project, BP said, wasn't big enough to trigger stricter pollution controls.

Staffers with the Natural Resources Defense Council weren't convinced. After digging through the thousands of pages BP had filed with the state in applying for a permit, the NRDC determined that many of the company's claims stemmed from "funny math," said Ann Alexander, a lawyer for the organization. "They both overcounted the reductions and undercounted the increases," she said.

BP assumed, for example, that the three new flares—devices that burn off waste gases and can be major sources of pollution at refineries—it was installing would produce no emissions, Alexander said.

The EPA agreed with many of the complaints lodged by the NRDC and other environmental groups and intervened in 2009. In May, the EPA announced that it and the groups had reached an agreement with BP. Among other things, the company said it would spend an additional $400 million on pollution control equipment.

"This facility's expansion is really the poster child for what's wrong with this system," Alexander said. "It's part of a pattern."

BP spokesman Scott Dean, asked to respond to the allegation, said, "We settled that matter to both parties' satisfaction." The Whiting project, scheduled to be completed in the second half of 2013, will allow the refinery to process up to 85 percent heavy crude, compared with the 20 percent it currently processes, Dean said. Overall, he said, emissions should drop.

Pattern of violations

Oil refineries have long been a target of state and federal regulators. Since 2000, the EPA has cracked down on the industry under a special initiative focusing on air pollution, collecting tens of millions of dollars in civil penalties and requiring billions to be spent on pollution-control upgrades.

Marathon is no exception. In April, the EPA and the US Department of Justice announced that the company had agreed to install "state-of-the-art controls" on flares at its six refineries, ultimately keeping 5,400 tons of pollutants from reaching the atmosphere each year. Marathon also will pay a $450,000 fine to settle alleged Clean Air Act violations.

The MDEQ has issued 13 air pollution violation notices to the Detroit refinery since 2001. None resulted in penalties because Marathon took quick corrective action, said Wilhemina McLemore, Detroit district supervisor for the MDEQ's Air Quality Division. "If they're out of compliance for a short period, they usually resolve whatever the issue is in a timely manner," McLemore said.

On the other hand, air sampling performed by residents and overseen by Global Community Monitor, an environmental group based in California, in 2010 found high levels of benzene—a carcinogen—and hydrogen sulfide near the refinery. In one case, more than 20 chemicals, including benzene, were detected in a resident's basement. An EPA investigation traced the contamination to Marathon's dumping of wastewater into the city sewer system.

"We were shocked to learn they did not have their own discharge pipe into a body of water like, I believe, every other refinery in the United States," said Denny Larson, Global Community Monitor's executive director.

An EPA spokesman said Marathon installed "carbon beds and a peroxide system to remove petroleum compounds from the wastewater discharge" in February of last year. Monitoring afterward showed that the technique worked and that benzene concentrations had fallen to "non-detect levels," the spokesman said.

Larson said he finds it troubling that the state has imposed no fines on Marathon since 2001. He believes the EPA might not have struck this year's agreement with the company but for the publicity surrounding the 2010 air sampling.

"Enforcement without penalties doesn't work," Larson said. "That, obviously, is why the citizens jumped in with their own testing. They weren't satisfied with the state of Michigan's opinion that Marathon was a good operator. There's a complete disconnect between what the state says and the experience of people who have to live along the fence line."

In Whiting, Global Community Monitor and the Calumet Project, a local environmental group, made a deal with BP—independent of the NRDC lawsuit—that requires the refiner to conduct what's known as open-path air monitoring. Instead of measuring chemicals within "three inches of air"and possibly missing large releases, Larson said, BP will use ultraviolet rays to scan thousands of feet along its fence line and post the monitoring data on a public website within 24 hours.

No such arrangement is in place in Detroit. Since January, Marathon has operated three monitors on its property and one at an elementary school. The devices have turned up little of concern, apart from elevated particulate levels linked to construction, the MDEQ's McLemore said.

"This is our way out"

An abandoned house in the Oakwood Heights section of southwest Detroit, near the Marathon refinery. The company has been buying homes in the decaying neighborhood. Kirk AllenAn abandoned house in the Oakwood Heights section of southwest Detroit, near the Marathon refinery. The company has been buying homes in the decaying neighborhood. Kirk Allen"This was a nice neighborhood," said Roland Wahl, 68. Now, a number of houses are abandoned, burned out or falling down. "When Marathon announced this buyout, " Wahl said, "I told my wife, 'Hallelujah, this is our way out.'"

To some residents of 48217, there's a simple solution to the perpetual tug-of-war between Marathon and a community grown weary of bad air: buyouts.

Marathon is acquiring homes in a decaying neighborhood called Oakwood Heights, on the north side of Interstate 75, just blocks from the refinery. Among those waiting for their appraisal in late August were Roland and Linda Wahl, who have lived on South Colonial Street for 38 years.

Linda Wahl, 69, said that five of the eight people in the family's house, including her 11-year-old grandson, have asthma. "At times, [the pollution] has been so bad that we've had to close our windows in the summer," she said. "We're seniors. We don't have money for air conditioning."

People on the other side of I-75 have yet to convince Marathon to relieve them of their homes.

"I want to move," Theresa Shaw said. When Shaw broached the idea with Marathon a few weeks ago, she was rebuffed. A company representative told her that Marathon was picking up properties only in Oakwood Heights, though Shaw lives about a quarter-mile from the Wahls and breathes the same air.

Shaw doesn't believe Marathon when it says the air will be cleaner after the bigger refinery goes on line. "I'm allergic to sulfur, and I know sulfur is one of the emissions of that tar sands," she said. "This is really a disaster."

The Center for Public Integrity is a nonprofit independent investigative news outlet. For more of its stories go to publicintegrity.org.

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