BP agrees to $400 million settlement at Indiana refinery

BP will pay $8 million in penalties and install $400 million in new equipment to cut air pollution at a petroleum refinery in Indiana as part of a settlement announced Wednesday by the Obama administration.

The Justice Department and the Environmental Protection Agency said Wednesday the settlement stems from violations of the Clean Air Act in connection with an expansion of BP’s Whiting, Ind., refinery. The oil giant also violated a 2001 consent decree with EPA governing the company’s refinery emissions, according to the agency.

BP agreed to install new equipment to cut emissions at the refinery, including from flaring, a process used to burn off waste gases produced during the refining process.

“In this case, BP North America has not lived up to all of its obligations under an earlier settlement agreement and has committed new violations of the Clean Air Act at its Whiting refinery in Indiana,” Ignacia S. Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division, said in a statement.

“This settlement secures a significant penalty, requires state-of-the-art controls, and is a fair and just resolution that will address BP’s violations. We will continue to hold BP accountable and ensure that it complies with the nation’s environmental laws.”

Environmental groups — including the Natural Resources Defense Council and the Sierra Club — joined in the settlement. The groups had challenged the validity of air pollution permits granted to BP by the state of Indiana in 2008 for an expansion of the Whiting refinery.

The groups — which signed the settlement along with BP and state and federal officials — praised the agreement.

“The permit fight was painted as a threat to the local economy; nothing could be further from the truth,” Steve Francis, chairman of the Hoosier Chapter Sierra Club, said in a statement. “This agreement forces the project to integrate more pollution control equipment. That means lessened health impacts, respiratory problems and more construction jobs. This has been a job generator; not a job killer.”