Engineering News

Illinois Gives Green Light for Wood River Expansion
Thursday, September 11, 2008

Cries of jubilation rose like steam clouds Wednesday as word spread that a multi-billion-dollar refinery expansion with worldwide implications had finally received the green light.

"This is what we've been waiting for the last five years," state Sen. William Haine, D-Alton, said.

Congressman Jerry Costello broke the news late Tuesday with an announcement that the Illinois Environmental Protection Agency had signed off on the final permit to expand the refinery operated by ConocoPhillips.

"This is tremendous news for the region and the nation," Costello, D-Belleville, said.

The permit was derailed for months by a last-ditch fight by environmental groups. The Illinois EPA granted a permit, but the decision was appealed to a U.S. EPA appeals board, which remanded three issues of concern back to the IEPA. The issues mainly revolved around flaring and air quality.

Once ConocoPhillips addressed those concerns, another permit was issued and there was another 30-day appeal period during which no new objections were filed.

The plant received final word Monday night, spokeswoman Melissa Erker said. The entire permitting process took 27 months and delayed the project at least a year, which was both disappointing and frustrating, she said.

To expedite the permitting negotiations with the environmental groups, ConocoPhillips agreed to a number of conditions over and above what was required, including additional monitoring equipment, several studies at the refinery and several community projects. The conditions will cost the company around $3.4 million, Erker said.

Kathy Andria, president of the American Bottom Conservancy and a member of the Air Committee of the Sierra Club, praised the last-minute agreements.

"It will mark the first time a large oil refinery has agreed to measure and reduce its greenhouse gas emissions," she said.

With the permit, ConocoPhillips will be able to move forward on a massive construction project that will employ hundreds of laborers to convert the refinery so that it can process Canadian crude oil and produce a wider variety of fuels.

The expansion will require at least 1,500 skilled craftsmen. Another 100 permanent jobs will be created.

The move has been touted because it will expand the capacity of the plant at a time when Americans are pushing to lessen the use of oil from the Middle East.

"We'll be buying Canadian oil, not Middle Eastern oil, Canadian oil," Haine said. "We won't be buying from half-crazed people in the Middle East and shipping our hard-earned dollars over there so they can ship back fanatics over here."

Conoco now owns the plant as a 50-50 partnership with EnCana, a Canadian oil supplier. The joint-venture plant is now being called the WRB Refining LLC Wood River Refinery.

The plant's staying power is now solidified, Haine said, noting that not so many years ago there was real concern that the facility would close.

When he was state's attorney and representing among other things the Madison County Board of Review, Haine said the former Shell refinery sought reductions in the plant's value.

"We made every decision to ameliorate the tax burden at that time," Haine said. "If that refinery would have closed (then), we wouldn't have this conversation now."

Erker said the only thing needed to launch the project is "a ground breaking. I can't tell you how long I've waited for this."

Design and engineering has proceeded during the last two years so that when the permit was finally OK'd, the building could move quickly.

Construction will essentially achieve two things, the ability to run additional crude capacity, and the ability to process the thick, sandy oil crude from Canada, Erker said.

ConocoPhillips will eventually be able to ship an additional 3.2 million gallons per day of clean gasoline and diesel to the region. Its distribution points are primarily St. Louis, Chicago and the Ohio Valley.

All the work will be done within the existing 2,200 acres of the refinery, Erker said.

One of the most noticeable changes will be the construction of a coker, a unit similar to what ConocoPhillips now operates on the former Premcor refinery grounds in Hartford. A coker, among other things, heats up the oil product and extracts hydrocarbons for conversion to gasoline. The product then moves on the catalytic cracker unit, which breaks it down further.

The company will also build another hydrogen plant, which is a necessary element in the oil conversion process, Erker said.

The new coker unit will allow for a 95 percent reduction in sulfur dioxide emissions and a 25 percent reduction in nitrogen oxide, she said.

In addition to the new units, the entire refinery is being "retrofitted" to adjust for the new processes.

"There will be no expanding of the fence line, but there will be changes to the skyline. The coker will be a very visible operating unit," Erker said.

Some work trailers have already been set up in preparation for the construction, and along Madison Avenue there has been ground work done in anticipation of more trailers.

This will be the largest construction project in the history of the refinery, right at $2 billion in value.

Initially the project was envisioned as a two-phase, $4 billion investment. The permit authorized by the IEPA, however, only allows a single phase of construction through the year 2010. Any further work would have to be approved, Erker said.

She said several projects will benefit as part of ConocoPhillip's $3.4 million agreement to get the permit:

- Roxana Schools will receive $980,000 to fund energy efficiency projects.

- $350,000 will be provided for municipal greenhouse-gas reduction projects in towns surrounding the plant.

- $1 million in money will be provided to the Land Conservancy for land acquisition in the American Bottoms floodplain, likely around Horseshoe Lake.

- $970,000 will be spent on installation of monitoring units at the refinery.

- $ 100,000 will be spent on a clean school bus program.

Source: Knight Ridder/Tribune Business News

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