State still issuing water permits under controversial, old rules

More than three years after sparking an uproar by issuing BP a permit allowing it to discharge more pollution from its Whiting refinery, Indiana is still issuing permits under the same problematic set of rules that played a role in that 2007 controversy.

The Post-Tribune of Merrillville reports that an overhaul of those rules that began in early 2008 is stalled and that permits are still being issued under the old rules.

State officials say new rules won't be ready until next year. And critics say that with the rules in limbo, industry and the public don't know when it's fine to increase pollution to Lake Michigan and other waters. That, they say, opens the possibility for lawsuits.

The delay in getting new rules in place prompted one of Indiana's most respected veteran environmentalists, Miller resident Lee Botts, to recently send a letter to Indiana Gov. Mitch Daniels announcing she's resigning effective Dec. 1 from the state panel charged with approving the new rules.

She had served on the Indiana Water Pollution Control Board since 2006.

"I cited my frustration with the failure of (the Indiana Department of Environmental Management) to deal with that issue as a reason for my withdrawal" from the board, Botts said. "I have had no reply from the governor's office."

In June 2007, IDEM issued a new wastewater permit for BP's $3.8 billion expansion of its Whiting oil refinery. The permit angered environmentalists because it allows the refinery about 20 miles southeast of Chicago to increase its discharges of ammonia and pollution called suspended solids into Lake Michigan.

BP later announced that it would find ways to keep the expanded Whiting refinery's discharges to the limits set under its previous water permit.

After the 2007 imbroglio over BP's permit, Daniels commissioned an independent report, which concluded that Indiana's so-called antidegradation rules were vague and were a major cause of the BP controversy. That report suggested the rules be revised.

Those rules determine under what circumstances, and by how much, polluters can increase pollution to Lake Michigan and other waters. They are intended to prevent new and increased pollution that would degrade water quality unless the increase is necessary to accommodate important social and economic benefits.

After Barnes' report was released, state officials held hours of meetings, workshops and discussions with industry, environmentalists and municipalities on new rules that would cover the entire state, unlike the current rules.

But the parties couldn't reach agreement about which pollutants should be covered, what companies would have to do to prove an increase is necessary—and what level of increased pollution can be considered "insignificant" under federal rules and thus doesn't require proof that it's necessary.

"What's at stake, fundamentally, is compliance with regulations and protection of the environment," said Jim Flannery, a former environmental manager at ArcelorMittal Indiana Harbor. "I don't know that anybody who has a position of authority, or even just works in the industrial base, wants to pollute the water or wants to pollute the air, but we have these contentious issues, and it gets into regulatory language and the impact of it for compliance. How clean is clean and how dirty is dirty? Some of those answers aren't easy."

Flannery represented industry on the Water Pollution Control Board until he resigned on Oct. 1, a move unrelated to the rules. He said opinions are strongly entrenched on both sides of the issue, which had been debated, but not solved, for years before 2007.

Frustration rose at the end of January after the U.S. Environmental Protection Agency sent a letter to IDEM saying EPA would not approve the rules as drafted because they don't live up to federal standards—an argument environmentalists had also made. In some circumstances, the revamped rules would allow up to 2 1/2 times more pollution than is acceptable under federal law, EPA said.

"It seems that IDEM is frozen in its tracks in the rulemaking for antidegradation ever since EPA criticized the draft rule. So I don't think we understand completely how Indiana is handling the antidegradation analysis here under the old rules" for permits like U.S. Steel Midwest, said Lyman Welch, water program manager for the Alliance for the Great Lakes.

IDEM spokeswoman Amy Hartsock said revised rules won't be ready until the summer of 2011.