The Ties that Bind Demand for Energy Petcokethe Koch Brothers and the Southeast Side of Chicago

by Ken SchmidtSUST 240 Waste

Roosevelt University11 Dec 2013

Petroleum coke also known as petcoke is a carbon-rich waste product generated when bitumen from tar sands is refined into oil Unfortunately petcoke has been commoditized and is being used as fuel for industry which only compounds the environmental degradations of tar sands oil extraction and refining from well-to-tank greenhouse gas (GHG) emissions being significantly higher when compared to conventional crude to the naphthenic acids and other pollutants which constitute oil sands process water (OSPW) The resulting slurry leftover from processing and refining tar sand oil from tar sands must be properly stored so that it does not end up in local waterways andor aquifers

Regardless of the opinions of those who stand to benefit financially from the continued extractionprocessinguse of tar sands oil namely the fossil fuel industry as well as representatives from numerous Canadian governmental departments the truth is this oil when burned emits more carbon than conventional oil Estimates range from the European Union stating that oil derived from tar sands has a 22 higher carbon emission rating than conventional oil whereas Marvin Odum Shell Oil Company president states its 6-7 percent more carbon intensive

Recently piles of petcoke have begun appearing along the banks of the Calumet River in southeast Chicago on sites which in years past had stored coal so industry has swapped one polluting product for another Unfortunately these piles some of which are five stories high are not covered so when it rains or the wind blows or these piles are disturbed in any way (ie by adding more material to the pile) this extremely small material (consisting of typically the size of a grain of sand) is washed away into local waterways or sent airborne to settle on residentsrsquo homes schools places of work etc

There are days when the winds are so high that residents are forced to remain indoors with their doors and windows shut so as to keep the petcoke from coating the interior of their homes Consequently this community and its residents who for the past century plus have experienced more than their fair share of environmental degradations are once again being subjected to intolerable environmental conditions

A massive pile of petcoke on Chicagorsquos southeast side Source Emily Brosious Gapers Block httpinvestigationsnbcnewscom_news2013110821370499-illinois-ag-and-neighbors-sue-over-humongous-heaps-of-petcokelite

As in times past the arearsquos geographic location global market forces the demand for cheap energy (and in years past industry) and its socioeconomic and racial conditions have combined to create a toxic environment With energy companies having almost having completely drained the easily-accessible oil deposits they are forced to turn their attention to the heavy crude found in the tar sands of British Columbia Canada which again once is extracted needs to be refined Unfortunately for local residents the BP refinery in Whiting IN is now the largest tar sand refinery in the United States processing 405000 barrels-per-day and as a result producing 22 million tons of petcoke

As the EPA is not regulating petcoke that responsibility falls to individual states With Indianarsquos rules on the material being stricter than those of Illinois it cannot be stored on-site so all of the petcoke generated at the Whiting refinery is barged and trucked less than four miles and kept in two storage terminals located along the Calumet River which used to house coal for the steel mills located there These storage terminals were recently purchased by KCBX a subsidiary of Koch Industries a multi-billion dollar multinational industrial conglomerate controlled by brothers David and Charles Koch It has been estimated that up to 350000 tons of petcoke has been stored to date at these facilities

Petcoke is much dirtier than coal so it cannot be used for fuel in the US -- but as petcoke is so much cheaper than coal corporations have commoditized it for use as an industrial fuel and found willing buyers in China and developing nations which have much more lenient air and water quality regulations (if they exist at all) And it just so happens that a third Koch brother William is the owner of the countryrsquos largest ldquoindependent petcoke marketerrdquo Oxbow Corp So

2

yet again through no fault of their own residents of the Lake Calumet area are being exposed to hazardous materials The question must be asked why Would corporations even consider storing petcoke in areas where residents were higher up on the socioeconomic ladder Or where people of color did not comprise the majority of residents Call me a cynic but I highly doubt it

Community Focus South Chicago and East Chicago

While the entire Lake Calumet IL area is directly affected by petcoke housed at the two KCBX owned storage terminals along the Calumet River I want to focus on the two neighborhoods which receive the brunt of the impact Both South Chicago and East Chicago (also known as East Side neighborhoods) are bisected by and run along the eastern edge of the Calumet River thus they are in close proximity to the KCBX storage terminals due to the prevailing winds and thus are most affected by blowing petcoke

The Calumet River runs along the western edge of the East Chicago neighborhood and bisects the southeastern tip of the South Chicago neighborhood Source httpwwwdreamtowncomimagesneighborhoodssoutheastjpg

Before delving into present situation of these two neighborhoods letrsquos first take a brief look at the history of the Lake Calumet region specifically with regards to environmental issues This region centering on Lake Calumet encompasses the southeast side of Chicago and parts of northwest Indiana and features the northern branch of the Grand Calumet River as well as Lake Michigan shoreline It has long been an area of economic and environmental stress The area underwent a fundamental change in 1869 when the US Congress set aside funding for the creation of a harbor in southern Lake Michigan followed by numerous structural changes to natural waterways as well as the construction of manmade waterways resulting in Lake Michigan being connected to Lake Calumet

With this link established numerous heavy industries manufacturing plants and slaughterhouses moved into the area all of which systematically simply dumped their wastes directly into Lake Calumet and surrounding waterways For half a century these companies fought efforts by local state and federal groups and agencies to get them to stop dumping It reached a tipping point when in 1954 the US Army Corps of Engineers filed lawsuits against three companies for failure

3

to cease dumping their wastes While the Corps won the cases the damage was done two of the companies sued were part of a group of eight polluters who were responsible for dumping 376 million gallons of polluted effluent into the region every day

Today the area is a patchwork of beautiful natural features including Wolf Lake Indian Creek and the Hegewisch and Indian Ridge marshes interspersed with massive industrial sites former steel mills oil refineries blast furnaces the Acme Coke Plant and the CID and Paxton landfills With industry playing such a large role in the area for so long today the arearsquos demographics are overwhelmingly middleworking class Almost three quarters of the population is minority 45 have less than a high school education and over 25 live below the poverty level Considering the environmental situation the region finds itself in today itrsquos not surprising to find these demographics those who can afford to will choose to live elsewhere and almost all of the jobs in the region which more often than not are manual and typically low-skill fall to the less affluent blue collar worker

Waste Sites

There are numerous waste sites in the immediate area including a Superfund site the Lake Calumet Smelter In nearby Hammond IN located just east of the IllinoisIndiana state line along the shoreline of Lake Michigan and just south of Calumet Park the State Line Power Station a coal-fired power plant ceased producing electricity on March 31 2012 Less than five miles northeast of Lake Calumet the plant had been providing electricity to the area for over 80 years Unfortunately thats not all it provided the combustion of coal results in numerous Hazardous Air Pollutants (HAPs) being emitted These include 2053 pounds of carbon dioxide per megawatt energy generated sulfur dioxide nitrogen oxides (NOX) mercury and other trace metals benzene as a vapor (Hickman 2001) as well as particulate matter including coal ash (Trumpeter 2012) And if that wasnrsquot bad enough State Lane had for years been one of the areas worst polluting power plants In 2010 alone EPA records state the plant emitted almost 30000 pounds of sulfuric acid 1180 tons of hydrochloric acid and 143 pounds of mercury into the air while also dumping into Lake Michigan a total of about 44000 pounds of copper barium zinc And that is just for one year the amount of pollutants this lone plant over its lifetime has released into the air waterways and Lake Michigan is staggering

One would think these numbers alone would be reason enough to shutter the plant but unfortunately as with most things it came down to a question of economics Due to stricter air quality regulations at the Federal level energy companies have found it to be more financially beneficial to close rather than retrofit coal-fired plants This trend combined with less expensive natural gas obtained from hydraulic fracturing (aka fracking) has reduced demand for coal used to generate energy While the plants closing was a victory for the environment it was a blow to the areas economy with one hundred mostly union jobs being lost

Petcoke Storage Site Profile

As previously mentioned the two petcoke piles in question are located at the two KCBX-owned storage terminals located along the northern branch of the Grand Calumet River One pile is located along the western edge of the river just south of 100th street and just southwest of the Chicago Skyway Bridge The second pile is less than a mile almost due south of the first ldquoalong Burley Avenue between 108th and 111th streetsrdquo just west of Wolfe Playground Park The

4

following image gives one a sense of just how much land these two piles occupy And donrsquot forget these piles tower over five stories tall so itrsquos difficult to get a true sense of the immensity of these piles from looking at a satellite photograph

Exposed petcoke piles located at KCBX owned storage terminals along the Calumet River Source Google Maps

Itrsquos even more difficult to gauge just how much of this sand grain-sized material has been dispersed over the arearsquos land and waterways by wind and rain

Conclusion Recommendations

At the macroglobal level we should immediately cease extractingrefining tar sands oil for all of the environmental degradation it causes which Irsquove detailed above At the microlocal level residents of the Southeast Side should take heart that recently some cities have had success in forcing energy companies to remove petcoke as Detroit recently did But residents of the region must also focus their energies efforts and monies to push the US EPA to properly regulate petcoke if not completely abolish it Regulating petcoke would disallow energy companies from being able to simply move the material to a different state with less stringent rules and regulations as to its handling and storage This would also keep residents of one citystate from pursuing NIMBYism (Not in My Back Yard) and instead as a country we could promote NIABYism (Not in Anyonersquos Back Yard) as far as the unsafe handling and storage of petcoke

The Millennium Reserve Calumet Core is a joint partnership between government and private industry with the goals of restoring 220 acres of area ecosystems while also creating economic

5

opportunity for residents and communities So long as the needswantsdesires of industry do not supersede those of area residents these types of partnerships are crucial to protecting and in this case restoring natural ecosystems as governments especially in poorer areas lack the financial resources required to realize such change Residents of the region as well as others who are concerned about the environment and the issue of petcoke must support the work of groups such as the Southeast Environmental Task Force (SETF) a non-profit ldquofocusing on environmental education open space preservation and pollution prevention in Chicagorsquos Southeast Siderdquo The SETF has partnered with other non-profit environmental groups in the region including Calumet Stewardship Initiative Calumet Heritage Partnership and Earth Share Illinois Rather than be exclusively a watchdog of local industry and its relationship to the environment the SETF encourages residents to be watchdogs themselves and report any abuses The SETF serves another invaluable service for the region namely bringing together industry business residents and community leaders to encourage dialogue between these sometimes disparate groups about environmental issues

As of late October 2013 there have been numerous positive steps taken at the Federal level on the issue of petcoke in the region On October 29 2013 US Representative Robin Kelly (D-2nd) co-sponsored legislation in the House of Representatives which would test the petcoke piles in the area for their ldquohealth and environmental effectsrdquo On November 4 lawsuits were filed against KCBX terminals by both the Illinois attorney general and those located near the petcoke terminals claiming they violate Illinoisrsquo Environmental Protection Act And on November 16 the EPA ordered that pollution monitors be installed near the petcoke piles both at the two KCBX storage terminals as well as at Beemsterboer Slag Co Area residents and the SETF deserve the lionrsquos share of credit as far as bringing attention to this issue By refusing to remain silent by reaching out to local media as well as elected officials by banding together they have forced those located outside of the region to acknowledge the issue of environmental justice

With the national attention the issue of petcoke has been receiving lately Irsquom optimistic that residents of the Lake Calumet region will not have to deal with them for much longer Nevertheless itrsquos essential that we not allow the piles to simply be moved elsewhere Until the EPA regulates petcoke lower-income and communities of color are similarly at risk so I hope residents of the region and the SETF lend their support and experience to other states in ways to keep petcoke out of their areasregions

At the end of the day though this is not just about petcoke These piles of petcoke are just one more visible representations of the worldrsquos dependence upon fossil fuels as the overwhelmingly dominant form of energy generation with all of their inherent environmental disadvantages As documented in Sandra Steingraberrsquos book Living Downstream (2011) trace amounts of toxic chemicals can be found thousands of miles from where they were used Considering the almost unbelievable amount of carbon dioxide being emitted on a daily basis from the burning of fossil fuels the mind boggles at the damage being done to the Earth and its inhabitants so it the shift to renewable forms of energy is imperative And who knows maybe years from now historians will look back at the pushback against petcoke as the final tipping point to bring about this change What a wonderful world that would be

6

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Calumet Heritage Partnership (nd) Retrieved from httpcalumetheritageorgindexhtml

Calumet Stewardship Initiative (nd) Retrieved from httpcalumetstewardshiporg

Carbon Emissions from Burning Biomass for Energy (nd) Retrieved December 7 2013 from httpwwwpfpinetwp-contentuploads201104PFPI-biomass-carbon-accounting-overview_Aprilpdf

Convington P (2013 May 3) Shell Oil Natural Gas Best Opportunity for Carbon Reduction Retrieved December 7 2013 from httpwwwtriplepunditcom201305shell-oil-natural-gas-best-opportunity-carbon-reduction

Costs of Unconventional Fossil Fuels (2009) Business amp the Environment with ISO 14000 Updates 20(1) 8

Earth Share of Illinois (nd) Retrieved from httpearthshare-illinoisorg

East Side neighborhood in Chicago Illinois (IL) 60617 subdivision profile - real estate apartments condos homes community population jobs income streets (nd) Retrieved December 7 2013 from httpwwwcity-datacomneighborhoodEast-Side-Chicago-ILhtml

EnergyEnvironment Nobel Prize Winner Pushes EU on Fuel Quality Directive (2013) Europe Energy Retrieved December 8 2013 from httpfindgalegroupcomgrnrinfomarkdoampsource=galeampidigest=d0f824f101911c7f178db4a06e07a001ampprodId=GRNRampuserGroupName=scha51546amptabID=T004ampdocId=A351738895amptype=retrieveampcontentSet=IAC-Documentsampversion=10

Hawthorne M (2013 November 5) Illinois sues owner of refinery waste piles to stop dust clouds Chicagotribunecom Retrieved November 11 2013 from httpwwwchicagotribunecomnewslocalct-met-petcoke-madigan-lawsuit-2013110506192697story

Hawthorne M (2013 November 17) Feds order pollution monitors on Southeast Side Chicago Tribune Retrieved November 21 2013 from httparticleschicagotribunecom2013-11-17newsct-met-petcoke-monitors-20131117_1_whiting-refinery-dust-clouds-nearby-bp-refinery

Henderson H (2015 October 15) Petcoke Piles on the Calumet Chicagos Newest Tar Sands Blight Huffington Post Retrieved November 7 2013 from httpwwwhuffingtonpostcomhenry-hendersonpetcoke-piles-on-the-calu_b_4101989html

Hickman Charles E (2001) Emission Control Power Plant Macmillan Encyclopedia of Energy Ed John Zumerchik Vol 2 New York Macmillan Reference USA 2001 443-449 Global Reference on the Environment Energy and Natural Resources Retrieved Dec 8 2013 from

7

httpfindgalegroupcomgrnrinfomarkdoampsource=galeampidigest=d0f824f101911c7f178db4a06e07a001ampprodId=GRNRampuserGroupName=scha51546amptabID=T001ampdocId=CX3407300102amptype=retrieveampcontentSet=EBKSampversion=10

Imported Crudes Far Worse than US Crudes on Diesel GHG Study (2009) Diesel Fuel News Retrieved December 6 2013 from httpfindgalegroupcomgrnrinfomarkdoampsource=galeampidigest=d0f824f101911c7f178db4a06e07a001ampprodId=GRNRampuserGroupName=scha51546amptabID=T003ampdocId=A201604173amptype=retrieveampcontentSet=IAC-Documentsampversion=10

Kroh K (2013 October 15) After Sparking Outrage in Detroit Koch Brothers Tar Sands Waste Now Piling Up In Chicago ThinkProgress Retrieved November 12 2013 from httpthinkprogressorgclimate201310152778921koch-brothers-tar-sands-chicago

Lake Calumet - Past amp Future (nd) Retrieved November 17 2013 from httpillinoissierracluborgcalumetpast

US EPA (nd) Lake Calumet Cluster Site | Region 5 Cleanup Sites Retrieved November 17 2013 from httpwwwepagovregion5cleanuplakecalumetsmelterindexhtml

Lydersen K (2012 February 11) Closing of State Line Power Station on Illinois-Indiana Border Is Expected to Leave Problems Behind New York Timescom Retrieved November 12 2013 from httpwwwnytimescom20120212usclosing-of-state-line-power-station-on-illinois-indiana-border-is-expected-to-leave-problems-behindhtmlpagewanted=allamp_r=0

Millennium Reserve Millennium Reserve - Calumet Core (nd) Retrieved November 17 2013 from httpwww2illinoisgovgovmillennium-reservePagesdefaultaspx

Mims A (2013 July 26) BP Refinery Dumping Toxins into Lake Michigan Ring of Fire Radio Robert Kennedy Jr Mike Papantonio and Sam Seder Retrieved November 7 2013 from httpwwwringoffireradiocom201307bp-refinery-dumping-toxins-into-lake-michigan

Research on environmental health detailed by scientists at Central Agricultural University College of Agricultural (2010) Health amp Medicine Week Retrieved December 7 2013 from httpfindgalegroupcomgrnrinfomarkdoampsource=galeampidigest=d0f824f101911c7f178db4a06e07a001ampprodId=GRNRampuserGroupName=scha51546amptabID=T004ampdocId=A233222126amptype=retrieveampcontentSet=IAC-Documentsampversion=10

Riordan Seville L (2013 November 8) Illinois AG and neighbors sue over humongous heaps of petcokersquo NBC News Investigations Retrieved November 11 2013 from httpinvestigationsnbcnewscom_news2013110821370499-illinois-ag-and-neighbors-sue-over-humongous-heaps-of-petcokelite

Seba E amp Williams N (2013 November 14) BP starts new Whiting coker to swap sweet crude for Canadian Reuters Retrieved November 16 2013 from httpwwwreuterscomarticle20131114us-refinery-operations-bp-whtiing-idUSBRE9AD1DN20131114

8

Steingraber S (1998) Living downstream A scientists personal investigation of cancer and the environment New York Vintage Books

Southeast Environmental Task Force (nd) Retrieved from httpwwwsetaskforceorg

Thale C (2004) Calumet River System Encyclopedia of Chicago Retrieved November 15 2013 from httpwwwencyclopediachicagohistoryorgpages203html

Toner C (2013 October 29) Kelly co-sponsors lsquopetcokersquo bill Southtown Star Retrieved November 15 2013 from httpsouthtownstarsuntimescomnews23424041-418kelly-co-sponsors-pet-coke-billhtml

Trumpeter K (2012) Coal ash In C Zimring amp W Rathje (Eds) Encyclopedia of consumption and waste The social science of garbage (pp 132-134) Thousand Oaks CA SAGE Publications Inc doi httpdxdoiorgezproxyrooseveltedu20481041359781452218526n55

Williams C (2013 August 27) Detroits Petcoke Piles Cleared From Riverfront But Still Need To Be Disposed Huffington Post Retrieved November 10 2013 from httpwwwhuffingtonpostcom20130827detroit-pet-coke_n_3823140html

Wilson C amp Weng Q (2010) Assessing Surface Water Quality and Its Relation with Urban Land Cover Changes in the Lake Calumet Area Greater Chicago Environmental Management 45(5) 1096-1111 doi101007s00267-010-9482-6

9