Prohibiting petcoke facilities from opening in Chicago will cost jobs and affect the city’s revenue, the state’s most influential business group said Wednesday.
The response from the Illinois Manufacturers’ Association came after Mayor Rahm Emanuel announced Wednesday that he’ll propose an ordinance at next month’s City Council meeting that will prohibit new petcoke facilities from opening anywhere in Chicago and stop existing facilities from expanding.
The zoning ordinance will be co-sponsored by Ald. Edward Burke (14th) as well as Ald. John Pope (10th), who’s heard complaints from residents in his Southeast Side ward about black dust from mounds of petcoke surrounding their homes since this past summer.
Beemsterboer Slag Co. and KCBX Terminals, petcoke storage sites on the Southeast Side, have been hit with lawsuits and intense political pressure from Attorney General Lisa Madigan, Mayor Emanuel and, most recently, Gov. Pat Quinn to control petcoke dust.
Questions have also been raised about whether City Hall was slow to respond to the mounting anger on the Southeast Side because of Emanuel’s decision to abolish the city’s Department of Environment shortly after taking office.
Illinois Department of Public Health Commissioner Dr. Bechara Choucair told the Sun-Times there was a “regulation vacuum” that allowed the dust issue to go on for too long, which prompted Emanuel to draft petcoke health regulations in December.
But not all are on board with the ordinance. The manufacturers’ association — a heavy-hitting trade association — called it “a solution in search of a problem” that will cost Chicago jobs and revenue.
“The Illinois Manufacturers’ Association does not believe that there is any justification for banning or arbitrarily limiting the processing, storage, transport or handling of petcoke in Chicago,” Mark Denzler, vice president of the association said in a statement.
Denzler called petcoke a “valued commodity that has broad application in the manufacturing sector.”
Petcoke, a byproduct of the oil refinery process that’s high in sulfur and carbon, is usually shipped overseas where it is burned as fuel. But in Illinois, it’s also used in the manufacturing of cement, steel, paper, brick, glass, paint and other products.
Some fear the ordinance will make manufacturing more expensive. Others in the business community believe the ordinance is anti-competitive and will prevent businesses from moving to Illinois or Chicago.
The Illinois Chamber of Commerce on Wednesday called the ordinance an “overreaction” to a small incident — a storm that kicked up dust from petcoke piles and coated some Southeast Side homes, drawing complaints from residents.
“We don’t understand what the mayor is trying to accomplish here. Petcoke and coal have been handled and stored in Chicago for decades with few issues,” Doug Whitley, CEO of the Illinois Chamber of Commerce said. “This seems like an overreaction to one incident. Good policy rarely comes from overreacting.”
In response to the comments by the Manufacturers’ Association and the Chamber of Commerce, mayoral spokesman Bill McCaffrey said just a small number of jobs could potentially be affected by the ordinance, including fewer than a dozen employees at one of the sites. He said petcoke is not manufactured in Illinois, merely stored, and the ordinance will not heavily affect the city’s manufacturing industry.
McCaffrey said the ordinance is merely being introduced to stand up for a Southeast Side community affected by petcoke dust.
KCBX operates two storage sites on the Southeast Side — storing petcoke produced at the BP refinery in Whiting, Ind. Beemsterboer is the owner of a third storage terminal.
KCBX spokesman Jake Reint said the company is still reviewing the proposed ordinance but is “concerned about policies that seek to ban certain products or services without cause or that discourage investment in the marketplace.”
“We don’t believe there is justification for banning or arbitrarily limiting the processing, transport, storage and handling of bulk materials, including petroleum coke and coal, in Chicago,” Reint said.
Reint said KCBX has been in communication with the community in an effort to update them on dust-control procedures the company has put in place.
“We have the utmost respect for our neighbors and we’re committed to doing the right thing,” Reint said. “We’re going to make every effort to work with [the] city to address the community’s concerns and remain a viable business and local employer. We think our businesses in our industry deserve the same opportunity.”
Contributing: Fran Spielman, Dave McKinney