Shareholder concerns won't affect Whiting expansion, BP says
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Chicago Post-Tribune
April 16, 2010
BY GITTE LAASBY
BP faced heat from shareholders this week over its involvement with Canadian oil sands -- the type that the BP Whiting refinery will be processing more of with its expansion.
At their annual meeting, shareholders proposed a motion calling on BP to review the risks related to the energy-intensive extraction of heavy crude oil from tar sands in Alberta. Oil sands are a mixture of bitumen, sand and water. Processing them emits more greenhouse gases, and shareholders were concerned BP had not accounted for the cost to either store the carbon or pay to emit it.
But preliminary voting results showed about 85 percent of shareholders who advance-voted opposed the motion, meaning BP relieved shareholders' concerns.
"BP is well aware of the extreme sensitivity of environmental issues for any investment in oil sands, and seems to have built conservative assumptions into the financial framework to allow for these extra costs," British investment adviser Ivor Pether told Bloomberg.
BP spokesman Scott Dean said the resolution would have "no impact whatsoever" on the Whiting expansion.
"The resolution failed so it'll have no impact on the project. We factored the price of carbon into our projects and Whiting is no exception," he said. "The project continues to move forward. We'll have 3,000 on the job this year working on the project. It continues to move forward on schedule."
Josh Mogerman, spokesman for the Natural Resources Defense Council, said the controversy could be taken as further expression of the debate about the Whiting refinery expansion. NRDC has argued that BP and the Indiana Department of Environmental Management failed to properly account for emissions of various pollutants from the expanded refinery.
"Shareholder involvement shows that the environmental and economic problems with tar sands are intertwined," Mogerman said in an e-mail. "Locally, it is another example that the concerns about the refinery's tar sands oil are echoed internationally. In (Northwest) Indiana, it is a concern over air pollution from inadequate controls at the refinery, as well as pollution dumped into Lake Michigan. In Canada, it is concerns over vast polluted lakes that contain mining waste that are leaching into nearby waterways ... And in London, it is a concern about the viability of the investment itself -- the true cost of all this pollution."
BP estimates oil companies will need to produce up to 60 million barrels of oil more per day by 2030 to meet the world's energy needs.
BP has three oil sands projects, but none of them have started producing.
The Whiting expansion is scheduled for completion in 2011.
http://www.post-trib.com/news/2163830,new-tarsand0416.article
