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Indiana Town's Economy Benefits from Canadian Oil Boom

The town of Whiting, Indiana, is home to the largest inland oil refinery in the United States. The energy company BP operates the Whiting Refinery, which originally was built by the Standard Oil Company in 1889. Now with heavier crude oil piped into the facility from Canadian tar sands, the facility is getting a multi-billion dollar upgrade. BP’s investment in the refinery is an economic windfall for the small town, but environmentalists say the improvements bring increased pollution.

It’s hard to find signs of high unemployment and a struggling economy along the streets of Whiting, Indiana.

Local resident Brian Lowry of the Whiting Development Commission says that is because Whiting is the beneficiary of one of BP’s biggest investment projects in North America, the upgrade of the Whiting Refinery.

“Thanks to that investment, which is the largest in the state of Indiana’s history, yes, we’ve been sheltered from the [economic] storm,” he said.

BP is spending an estimated $3.8 billion to increase the refinery’s capacity to process heavy crude oil, brought by pipeline from the tar sands of Alberta, Canada.

“So the $4 billion modernization is really providing a huge economic shot in the arm to northwest Indiana, in general,” Lowry said.

“Right now we have roughly 8,000 folks on site, about 6,000 contractors and roughly 2,000 full-time employees,” said Brad Etlin, BP’s local Director of Government and Public Affairs. “There are thousands of people on site each and every day that are out there visiting local stores and local restaurants. There are significant indirect benefits for local towns, local communities. When the modernization project is complete, there will be a significant increase in the tax base for some of the local municipalities.”

Although most people who live in the shadow of the refinery will enjoy lower property taxes and newly constructed public facilities, not everyone is happy that more oil will pass through the refinery.

“Is there going to be a price reduction for gasoline? I don’t think so,” said Steve Kozel, President of the Calumet Project, a citizens group he says that promotes social, economic and environmental justice. The organization has opposed some of BP’s environmental permits with the state of Indiana, citing concerns about the amount of pollution increased refining will create near the facility and along Lake Michigan.

“Our concern is what exactly is it going to be doing to the air," said Kozel. "They’re going to be increasing the sulfur by 20 percent, the particulate matter by 21 percent, and increasing lead by 25 percent into the air, so this is a big increase. You’re talking almost 20 percent, once the refinery is manufactured.”

BP’s Brad Etlin says some of the money for the modernization project is targeted at reducing the amount of pollution the plant produces.

“We’re investing more than $1 billion in environmental improvements - both in our waste water treatment plants as well as other parts of the refinery,” he said.

Local resident Brian Lowry says that so far, he has seen no ill effects.

“My children swim safely in the water here. Certainly we breathe the air here with no issues," he said. "So as far as environmental concerns go, I don’t have any.”

The upgrade to the Whiting facility, which produces about 405,000 barrels of oil a day, is about two-thirds completed. BP says the modernization project, which began in 2008, should be finished by 2013.

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    Kane Farabaugh

    Kane Farabaugh is the Midwest Correspondent for Voice of America, where since 2008 he has established Voice of America's presence in the heartland of America.