The Politics of Petcoke Dust for Dummies


What is petcoke dust and where does it come from?  Petcoke is a highly stable solid fuel used in power generation and manufacturing processes worldwide. Petcoke is made during the oil refining process. After gasoline, jet fuel and lubricating oils are manufactured from crude oil, the remaining material goes through additional processing called coking. Coking is the use of heat to crack or break down large hydrocarbon molecules to produce “fuel grade” petcoke, a highly stable, solid fuel. Petroleum coke is a complex mixture of mostly elemental carbon with inorganic and organic compounds.

Petcoke is not considered hazardous; it has a low potential to adversely affect human health. Petroleum coke was not found to be a carcinogen, nor was it found to adversely effect developmental or reproductive systems. Possible effects are generally limited to the respiratory system. These same effects are commonly associated with exposures to general dust particles and are not directly attributed to petroleum coke. This finding was from the EPA and  the review of 15 separate studies. Summary Documents available include: US Environmental Protection Agency (USEPA), 2011 – Screening Level Hazard Characterization Petroleum Coke Category; EPA OPPT evaluation of data for HPV program; and American Petroleum Institute (API), 2007 – Petroleum Coke Category Analysis and Hazard Characterization; EPA submission for HPV program from API in December 2007.

Since first produced in the U.S. in the 1930s, petcoke has been safely transported by ocean freight, barges, rail and truck. In Chicago, as with most locations, petcoke is staged outside in preparation for shipping domestically and internationally as permitted and governed by a wide range of federal and state environmental and safety regulations.

Petcoke also provides valuable energy. About 80 percent of petcoke is used as a fuel for electric utilities and cement kilns. Petcoke fuels U.S. industry. Calcined petcoke is the larger domestic market segment. It is a critical ingredient in the manufacture of aluminum as well as steel, paper, brick, glass, titanium dioxide (a pigment or whitener used in everyday consumer items) and other industrial products.

Now that we understand what petcoke is and how it is used lets look at the concerns of petcoke storage and the dust it sometimes causes.

There has been concern in Chicago and other cities about the storage of petcoke because of the dust it sometimes causes and public safety. One must ask themselves if there is really a public safety concern if the EPA has stated petcoke is not considered hazardous and has a low potential to adversely affect human health. Many feel the media and public outrage is due to politics. Why politics you ask? The famous republican Koch Brothers are major players in the petcoke business and going after petcoke means going after the Koch Brothers. Who are the Koch Brothers?

David and Charles Koch are industrialists and businessmen that are most notable for their control of Koch Industries, the second largest privately owned company in the United States. Their combined net worth is over 100 billion dollars. They are also known for having strong faith and unapologetic view of free markets. Their guiding principals are:

  1. Integrity: Conduct all affairs with integrity, for which courage is the foundation. Honor donor intent.
  2. Compliance: Strive for 10,000% compliance with all laws and regulations, which requires 100% of employees fully complying 100% of the time. Stop, think, and ask.
  3. Value Creation: Contribute to societal well-being by advancing the ideas, values, policies, and practices of free societies. Understand, develop, and apply Market-Based Management to achieve superior results by making better decisions, eliminating waste, optimizing, and innovating.
  4. Principled Entrepreneurship™: Apply the judgment, responsibility, initiative, economic and critical thinking skills, and sense of urgency necessary to generate the greatest contribution, consistent with the organization’s risk philosophy.
  5. Customer Focus: Discover, collaborate, and partner with those who can most effectively advance free societies.
  6. Knowledge: Seek and use the best knowledge and proactively share your knowledge while embracing a challenge process. Develop measures that lead to more effective action.
  7. Change: Anticipate and embrace change. Envision what could be, challenge the status quo, and drive creative destruction through experimental discovery.
  8. Humility: Exemplify humility and intellectual honesty. Constantly seek to understand and constructively deal with reality to create value and achieve personal improvement. Hold yourself and others accountable.
  9. Respect: Treat others with honesty, dignity, respect, and sensitivity. Appreciate the value of diversity, including, but not limited to, diversity in experiences, perspectives, knowledge, and ideas. Encourage and practice teamwork.
  10. Fulfillment: Find fulfillment and meaning in your work by fully developing your capabilities to produce results that create the greatest value.

They have also adopted what they call the five dimensions:

  1. Vision: Determining where and how the organization can create the greatest long-term value.
  2. Virtue and Talents: Helping ensure that people with the right values, skills, and capabilities are hired, retained, and developed.
  3. Knowledge Processes: Creating, acquiring, sharing, and applying relevant knowledge, and measuring and tracking profitability.
  4. Decision Rights: Ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable.
  5. Incentives: Rewarding people according to the value they create for the organization.

It’s safe to say that any citizen of the world would agree with the “five dimensions” especially if you believe in personal freedom. So you ask what’s the problem with the Koch Brothers?  The answer is that they are major donors to the Republican Party and in politics the other side is always wrong. We must all remember politics and business go hand and hand. Politicians and media outlets that tend to have liberal views are not the biggest fans of the oil and gas industry. Some we argue with liberal views when it comes to energy because they feel that their polices aren’t pro growth  meaning that their polices stops US growth and global freedom. When there is an attack on US energy there is an attack on US growth and personal freedom which tends to affect low income and Middle America the greatest.

Would low income and middle Americans have more freedom if gas prices where lower? Would they have more freedom if America had a stronger manufacturing base?

Would they have more freedom if cost of goods and services where lower?

Most people would say YES to all three questions.

Petcoke is part of the process that helps in the building of America because it is used in manufacturing and low cost energy brings economic freedom due to low gasoline prices and the ability to produce goods at lower cost. There are some true concerns with petcoke dust in regards to it as a nuisance in Chicago and other cities. Under the leadership of Chicago Mayor Rham Emanuel and 10th ward alderman John Pope, Chicago has the nation’s toughest limits on black mounds of petroleum coke (petcoke dust) rising near refineries that are shifting to thicker, heavier oil from the tar sands region of Alberta. Many other cities are following Mayor Rham Emanuel and alderman John Pope’s lead. City leadership around the country are driving petcoke storage facilities out of town unless they have solutions to control the petcoke dust.

Many of the reasonable and capable petcoke facilities such as KCBX Terminals have invested is dust control solutions and announced it would build a $120 million structure along the Calumet River to enclose mounds of petcoke stored there. KCBX also announced that by June 2015 it will shutter one of its storage sites along the Calumet River at 100th Street. The company also said a larger site off Burley Avenue will be converted to quickly transfer petroleum coke between railcars, cargo ships and barges, and by June 2016 will no longer feature uncovered piles of the refinery byproduct.

I find the quote from the movie Spider-man so fitting. “Whatever life holds in store for me, I will never forget these words: “With great power comes great responsibility. This is my gift, my curse. Who am I? I’m Spider-Man” That quote holds true for the American shale revolution. Only change to the Peter Parker aka Spider-Man quote would be, “Who am I? I’m the US shale revolution”. With the great North American shale boom energy has become cheaper,  you will find job growth, economic freedom, and a solid path to US energy policy has been introduced.  Many will also argue that the shale boom has given the US leverage over Middle East oil producers and oil producing nations that may not agree with US policy. Henry Kissinger was once quoted “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world”.  So in short as America builds a stronger energy policy the US will produce more petcoke. We must remember cheap energy builds nations. Follow petcoke and you will find nation building. I look at the countries of China and India which are growing. By the way {ISHARES MSCI INDIA ETF (INDA) year to date is 11.75% as of 3/3/2015}; you will find increase imports of petcoke because petcoke is used to build roads and other vital services.

Some will say no to the keystone XL pipeline because it is bad for the environment and will produce more petcoke which causes more petcoke dust. When many hear this argument they wonder if the group or person is really being honest with themselves about this issue. The reason they wonder about their position is because Keystone XL is not about oil. It’s about transportation of oil. As we speak oil is being transported via rail which is very danagous and should be a major national security issue. Oil will travel through North America no matter what and anyone that tells you different is not being honest. The question is how do we transport it? I have a feeling if congress drafted a CLEAN bill to transport 60% of the Canadian oil via Keystone XL and 40% of the oil via rail it would pass both houses and the President would sign it. Why the 60/40 spilt you ask? 60/40 means there will be no losers. If Keystone XL is passed how will the rail tankers make up for the lost business? Bottom line Keystone XL means less rail tankers which mean less business for rail companies. Do you see the politics coming into play?

All nations of the world are trying there best to build their nations to better their citizens and to protect their interest. All one has to do is to look to the markets and see what nations are buying and stockpiling. Many of them are buying raw materials, increasing oil and gas reserves, and chemicals needed for heavy machinery and military operations. So much is at stake when it comes to energy policy. Having a clear solution for citizens and business couldn’t be more important which brings me to an enhanced solution to petcoke dust.

The solution is Atomized dust suppression. Atomized dust suppression solutions allow operators to engage in environmentally responsible dust control, with considerably less product loss and reduced concerns about runoff.  It’s a solution that makes good economic and ecological sense, one that deserves closer examination as an alternative to existing and proposed dust mitigation techniques. While it’s likely that no single dust management technique will provide the level of control sought by critics and concerned citizens, it’s hoped that this solution may be recognized as having meaningful benefit to petcoke handlers and residents who live near those operations, eventually becoming part of an effective dust solution plan.  Having different dust control solutions working with each other will yield the best result. Petcoke will only increase as US energy policy gains strength. All parties including politicians, business, and the public should keep an open mind about this issue that affects the world.  Question is do we want weak energy policy and no petcoke or strong US energy policy that comes with a little dust that can be controlled? It’s an open debate. In a perfect world EVERY nation would have 100% green energy policies but last time I checked we don’t live in a perfect world. Plus for green energy policy to be fair all countries must embrace green energy policies. Meaning one country can’t come to the boat race with a high power speed boat and the other country is racing with a cool looking high tech sail boat.

Political leaders such as Mayor Rham Emanuel and alderman John Pope kept their word to stop petcoke dust which is a victory for Chicago. It’s also shows that reasonable and capable companies such as KCBX Terminals and BP can adapt to political changes and the public’s concerns while still helping America’s and the worlds energy needs. In closing I challenge legislators, local, state and congress to put politics aside and consider whether there may be other dust suppression choices or than banning and imposing unrealistic regulations on the US economy.

All ways remember POLITICS and business goes hand and hand! It’s also true PEOPLE and votes go hand and hand. Start the debate and offer a solution.

Olieh Industrial Solutions certified minority business enterprise that offers soil stabilization and dust control solutions. Our dust control and soil stabilization solutions play a vital role in stopping fugitive dust, public safety, and accurate military operations in dusty rugged landscape where temperatures vary from extreme highs to freezing lows and where visibility can change from 30 miles to 30 feet in a matter of minutes. All of our dust and soil stabilization solutions are environmental friendly.