Calumet scraps idea of shipping oil on Great Lakes

By John Myers

Forum News Service

Plans to move oil out of the Twin Ports via Great Lakes freighters that never really took flight have now been formally grounded.

Calumet Specialty Products says it has scrapped plans to build an oil terminal in Superior that could have transferred western U.S. and Canadian oil to tankers to move to eastern refineries.

Calumet in January decided to pull its air permit application that had been filed with the Wisconsin Department of Natural Resources. Since then the company has decided to "go in a different direction."

"We always said the project depended on getting a partner, preferably on the customer side of things, and that just didn't happen. There was some interest ... but no one would commit," said Kollin Schade, Calumet's plant manager of its Superior refinery. "I guess you never say never. But that window appears to have passed and we're not directing any resources toward it."

Indiana-based Calumet owns the former Murphy Oil refinery in Superior - Wisconsin's only oil refinery. It receives western oil via the Enbridge pipeline system, and its primary products are fuels, such as gasoline, and blacktop material.

Schade said that no other major project has surfaced for the Superior refinery. The refinery will continue to operate as-is "but we're always looking for new projects, especially the opportunity to move away from a fuels focus into specialty products," Schade said.

The Great Lakes idea, criticized by environmentalists, was always intended to be a short-term solution to an oil transportation problem. Calumet was trying to take advantage of a bottleneck in oil movement in Superior where, until pipelines catch up, more oil can move in than move out. Moving oil by ship is far cheaper than moving it by rail but can't compete with pipelines, Calumet officials had said.

But Calumet was never able to strike a deal with eastern refineries to help build the project. The project hit a major snag in January 2014, when the Wisconsin DNR denied a permit application to rebuild the waterfront area where Calumet would have built the transfer station. The permit had nothing to do with oil, but was denied because of details regarding harbor fill.

Calumet officials in September, 2013 also said the terminal was shelved, but then later revived the idea.

Environmental groups strongly oppose moving more oil across the Great Lakes, saying any spill would be difficult if not impossible to entirely clean up. They say the potential ecological damage from any spill outweighs any advantages of moving oil by water.

Shipping oil and refined petroleum on the Great Lakes is nothing new. In 2010, 3.7 million tons of oil and petroleum products were shipped either to or from U.S. Great Lakes ports, and much more that moved only between Canadian ports, according to the U.S. Army Corps of Engineers.

A large amount of petroleum currently moves on Lake Superior through Thunder Bay, Ont., by Great Lakes tankers. And millions of gallons of gasoline refined in Illinois are shipped out of Green Bay to move across Lake Michigan every year.