THE LOCAL AREA WATCH

FUTURE IDIOCY

Yes, I know, we shouldn't expect much in the way of intelligent discourse from grandstanding politicians on Capitol Hill and windbag pundits on cable news.  But is it really too much to ask that their bloviations have at least some connection to reality, however tenuous that may be?

What is sticking in my craw is the utter stupidity of blaming speculators for the high price of oil.  These blowhards are railing against traders of oil futures because their alleged speculations are bidding up the price of crude.  First of all, let's get straight what a future is.  It isn't a barrel of crude oil, a bushel of wheat, a head of cattle, or anything else tangible.  It is a contract to buy or sell a commodity at a set price at a certain date in the future.  So if oil-futures traders are pushing up the price of anything, they are pushing up the price of the contractual right to buy or sell oil, not oil itself.

Second, the oil futures market, like all futures markets, is a zero-sum game.  That means for every oil futures contract sold, one has to be bought.  There is nothing mysterious about this.  It is as obvious as it sounds.  Once a contract exists, it can be traded again and again until it expires.  So that contract to buy oil at a set price has its own price that will go up and down.  Thus, an oil futures contract acquires a market dynamic of its own that can closely track or wildly deviate from the actual price of oil depending upon the objectve, insight, mood, or, often, folly of traders.  Whatever the case, this trading remains a zero-sum game, so that for every trader making a bet that the price will go up, there is another betting that it won't.  In other words, these "evil" speculators are collectively placing as much money on one direction as the other -- and even then, it is on the direction of the oil futures contract, not oil itself.

Third, is everyone making trades in a futures market a speculator?  No!  Futures markets are an efficient way to trade risk for certainty.  For example, a farmer wants to lock in the price he will sell his wheat for at harvest.  A baker wants to lock in the price he will pay at that time to buy wheat.  They both want to eliminate the uncertainty of their revenues and costs in the future.  With a futures market the farmer and the baker do not need to find each other to make this transaction.  The futures traders will do that for them.  More importantly, they will do that when there is an imbalance between buyers and sellers of commodities.  In that case, they will speculate.  But their speculation comes with the risk the farmer and the baker traded away for certainty.  That risk means, if they are wrong, they will either have to buy or sell the commodity contracted for at a loss or, as is usual, settle the difference in cash.

Finally, all of the above is the reason why an oil futures contract is called a "derivative".  It exists only because there is a market for the real thing, crude oil.  Thus, the futures market is parasitical to the actual market for oil.  It can not and does not drive that market.  The actual market is driven by the fundamental law of supply and demand (except for the periodic self-correcting euphoria and panic to which all markets are subject), and so the price of a futures contract for oil merely bounces up and down around the actual price for oil.  For the futures market to drive the actual market would be a defiance of the law of supply and demand, a law which not even the most vociferous demogoguery from Capitol Hill and cable news can repeal.

THUMBS UP TO LOCAL BLOGGER

Let's give a round of applause to Nick DeLeeuw and his fine website www.RightMichigan.com.  Nick's coverage of the Michigan political scene in the run-up to yesterday's presidential primary was top notch, and even garnered the attention of the national punditry, including National Review Online.  Clearly, RightMichigan is becoming the go-to place in the blogosphere if you want the latest on the machinations of Michigan politicians.  Good work, Nick!

DEMOCRATS FOR MCCAIN

FYI, folks.  I received information this morning that a prominent Democrat was urging Michiganders to vote for Senator John McCain in yesterday's Republican presidential primary.  Campaigners on behalf of erstwhile presidential hopeful Joe Biden, the Democratic senator from Delaware, phoned local citizens late in the day asking them to vote for his aisle-crossing colleague McCain.  Whether Biden's eleventh-hour endorsement was a peculiarity limited to Michigan because of the meaninglessness of the Democratic presidential primary or heralds something more ala Joe Lieberman, I haven't any idea.  But it was an odd thing nevertheless.

RING IN THE NEW, SAY GOOD-BYE TO THE OLD

Happy New Year 2008 L.A.W. Readers;

We end one year and begin another.  2007 was a busy and interesting calendar cycle. We expect 2008 to be the same, if not more so. After all, we have a partial new city commission to keep our eye upon and it is a big Presidential election year as well.

Areas we’ll continue to keep in the bullseye zone:

Grand Rapids Mayor George Heartwell
Grand Rapids City Commission (especially the two new members)
Grand Rapids Public School System
City Services
Local and regional businesses
City, county and state politicians
Those crossing the line

Periodically, we’ll provide commentary outside these areas and spotlight important books, movies, magazines and other mediums that we feel warrant your attention. And as always, we'll continue to look forward to your comments, thoughts and suggestions along the way.

We wish each of our readers a happy, healthy and faith filled year ahead.

Regards,

Bridget Dupont-Tingley
Editor
The Local Area Watch

William Q. Tingley III
Executive Director
The Local Area Watch

IF THEY BUILD IT . . . . . . WILL THEY COME?

Have any of you driven around downtown Grand Rapids lately and noticed the plethora of condo complexes every direction you look?  Check out the skyline, they are everywhere – north, south, east and west. You want one next to a highway, we’ve got one for you!  You want one in an old renovated furniture factory, we’ve got that too!  You want one in a historic area, ditto!  You want a new one with options galore, have we got a condo for you!  You want a river view, no problem, which side do you  want - sunrise or sunset? Close to the college scene? Come on down, we’ve got one of those and bring your party shoes cause we're going dancing after the closing! You want one with Brad Pitt, Angelina Jolie and all their lovely children next door? We've got that too! Actually scratch the last one, I don't think any developer in town has that many connections yet. Bottom line...

River City is quickly becoming Condo City.

Let’s see if my memory holds…there is Park Row, Icon on Bond, Plaza Towers, Landmark Lofts, Union Square, Boardwalk Condos (the Old Berkey & Gay Factory), Monroe Terrace, City View, River House, The Fitzgerald, Front Row and the Waters Towers. That’s just a few I can remember without research. I’m not even going to mention much older complexes and those not close to downtown.  Most of those mentioned above are either done being built and ready for move in, are in the process of being built or  have been renovated/remodeled in recent years to compete with new builds.  Prices seem to be hovering in the $150-250K range for one bedroom/one bath, up to $300-500K for two bedrooms/two baths or more. Factor in a premium price if you choose to be up high, with a river view and want the luxury of new over old construction.  Over 18 units alone are currently for sale between $500,000-1,000,000. That’s a lot of expensive condo real estate for such a small market as Grand Rapids. If you reference the income availability grid noted in the last article, in the entire state of Michigan, only 8.8% of the population can afford condos in GR that are on the market between $500,000-1,000,000.   This number is not what we would call a “bumper crop”.

The GR Press had an article a few weeks back noting that realtors and developers are counting on the suburbanites and young professionals all dumping their current living arrangements for the ease and joy to be found in the concrete jungle. They profiled some parents and their adult kids all giddily choosing condos and living in downtown instead of the burbs.  They praised city living and all the perks that go along with it. A new day has dawned people, a new day has dawned and if you don’t buy a condo soon you will have missed it.  Really???

Granted, there are certainly many positives to be found in condominium living:

no yard work
no exterior maintenance upkeep
smaller sq. ft. so, less house to clean
single level living with few to no stairs
lower buy in prices (usually, not always)
neighbors upstairs, neighbors downstairs – lots of new friends if you want them
property tax breaks in renaissance/tax free zones
community areas with pool/tennis courts/work out rooms
use of public transportation system with ease
ability to ride your bike with helmet all over city streets – please look before crossing!
the ability to walk around downtown and not need a car to visit restaurants, bars, clubs, etc.
being close to all the action – parades, festivals, fireworks shows, etc.

As in all things, there are drawbacks to condo living as well. A few are:

mandatory monthly condo association fees (often quite high)
lack of privacy and sometimes acoustical issues
access to outdoors limited to tiny balconies, small patios and often no green space
due to the box like nature of condos, often feels like glorified apartment living
dogs/cats/pets often not allowed per HOA rules & regulations
limited guaranteed and covered parking both for owners and visitors
lack of gas stations/grocery stores/convenience stores located close-by  - often a car is needed just to get basic food and supplies
Whether walking or driving, congestion is growing downtown, you’ll have to deal with it
lower long term appreciation rates
reduced buyer pool when you try to sell later

Places like the Boardwalk Condos (old B & G Factory) seemed to sell in a decent amount of time per county records, but the prices are in the lower range, 70K - 250K max.  I have been told by some that this building might be subsidized (I have not been able to confirm this yet) which makes a difference to sales and could account for the lower prices. On the other hand, the lower price could be due to the fact that the previous developers could never get straight if they actually removed toxic waste from this site illegally by the hundreds of truckloads (they deny this yet, video evidence and witness testimony shows to the contrary) or if the toxic waste is still below all the buildings in massive amounts as they claim.  Perhaps this inconsistency is part of the pricing program.  Keep it cheap and keep them quiet.  Residents, don’t worry about the toxic waste, we say they took it out. On the other hand, the old developers say it’s still there. Time will tell for sure.  By the way, you can have dogs in this complex and they have been known to use the entire back lot of the building and train track area as their massive doggie doo-doo box. Sooooo convenient. Count this building in pet lovers – it’s for you.

I drive past the Icon on Bond condos every week. Their initial occupancy dates were advertised as beginning in April. Since then, their web site has moved occupancy dates to early summer. Even with that change, the place still seems eerily quiet and empty.  Their web site advertised that of the 118 condos, ½ had sold as of December. The question remains – where is everyone then? A clean transaction for a completed unit with a qualified buyer could easily be done in 3-4 weeks or less.   I haven’t seen anyone moving in and nothing is recorded as closed at the county level yet either per my research. They seem like nice places, unsure what is happening over there. Is unseen interior work on delay?  Is the complex too pricey? Unappealing location near the freeway, industrial corridor and across from electrical towers and power lines? Simply a victim of too many condos for sale in town? This one is a bit of a mystery.  If any of you have wind of what is happening, do share.

The glassy blue modern marvel known as the River House continues to rise over the western Grand  River, but prices seem a bit steep.  It costs a buyer about 250K to get in lower level and smaller units, and prices skyrocket  to  the 500-650K range for higher locations, water views, cityscapes and more amenities. This will prove to be the hot place for young as well as older professionals who probably want a status location and one of the better condo views of the small, but appealing Grand Rapids skyline.  How popular it proves to be on the other side of the river is still to be determined. I imagine for those with money and good walking shoes, the location will be just right. 

Park Row is coming along fine over on Michigan Street.  Developers noted awhile back to the media they have sold something like well over ¼ of the units as of the construction phase begun earlier this year.  The complex itself seems to be appealing with dedicated entrance/exits, central boulevards, landscaping and green spaces. It does face the freeway and busy Michigan Street so, the views won’t be nearly as appealing as those "down by the river" (anyone thinking Chris Farley of Saturday Night Live with that last line? You know…I live in a van, down by the river!).   Anyway, the draw at this complex is it is close to GVSU and the medical buildings on Pill Hill.

The Fitzgerald in the old renovated YMCA building is small and boutique like. The units that are finished appear to be well done and appealing, but they have been pricey and somewhat slow to sell.  This complex is more for the upscale buyer from what I have seen.

Good old Plaza Towers is always the big contender in town. It’s a fine mixture of lower priced condos, medium priced and high end – it would be perfect for Goldielocks and her three bears. The best thing going for this place is location – and in real estate – we all know how prized that can be. It sits off the Grand River and has great views from three sides of the building. It is right next door to Van Andel Arena, The Bob, TGI Fridays, the new JW Marriott 5 star hotel, multiple banks, office complexes and has a great riverwalk area. All units get guaranteed parking of at least one up to four spaces and the place has tennis/basketball courts, exercise room and pool/hot tub area. Don’t forget there are also apartments in this building and The Marriott Courtyard Hotel with restaurant. It’s an older building, but always being updated in terms of landscaping, exterior repairs and interior upkeep. With all the competition in town, it may need to remodel it’s entrance and lobby to the condo tower and common hallways as time goes on to not look dated and remain one of the premier condo addresses in town.  It’s not big city great, but it’s one of the better choices for Grand Rapids.

That’s enough individual condo complex commentary for now.

I have seen a handful of complexes in person, others via pamphlets/flyers, web sites, personal photos and on line.  I would call most fairly standard and nothing too exciting (think Chicago, Miami, New York, Paris here).  All the looks are definitely the Midwest at their best and there is nothing wrong with that.  The majority offer the standard white box interior, a little bit of woodworking and exposed brick walls, open ceilings with duct work showing through in the renovated buildings, hardwood floors,  a few windows in each room, upgraded kitchens, appealing bathroom, but everything else is remarkably apartment like.  If you can get a great  river view or great skyline view do it, these things will help with extra enjoyment now and better resale value later.

The GRAR MLS (multiple listing service) shows all single family homes, condos and multi-units available on the market, but only those properties that are listed by licensed realtors or those working with licensed realtors (builders/developers) show up.  Builders or developers selling FSBO without licensed representation are not typically found in the MLS system.  Thus, the availability of active units and closed stats developers quote to the media is hard to confirm. They rarely want to admit a complex is proving hard to sell or slow to sell so, numbers could easily be inflated to help move units along.  It takes hard research at the city and county level to verify their numbers if you want exact data as to what is available, what is under option, what is sold and what has closed. So, for now, most of us take the builders/developers at their word what has moved off the books. Hope they are as honest as they look :-)

I'm all for condos and ample building provided the market can support it. I certainly want rising housing values.  What I don't want is for supply to outweigh demand and then cause prices to drop and problems to domino in terms of lower appraised values, depreciation, distress sales and the like. Although I feel there is a need for this type of living in a growing urban area like G.R., especially with all the medical, research and education related jobs coming to the area in the next 1-2 years, I remain a bit uneasy at the supply and demand ratio.  I worry builders/developers got a wee bit too excited at the prospect of doing new brick and mortar work and didn’t plan for mortgage issues, credit tightening and an unstable economy throughout the region and state. My guess is even if units are slow to sell, in time prices might come down to bring in those necessary buyers and get the properties off the books. Some may offer closing cost concessions, hoa credits, home warranty plans and more if things gets really tight and slow. Eventually, all should be liquidated, but at what price and how long might it take?  Perhaps some of these condo complexes should have been developed into newer and more appealing higher end apartment options instead. A more balanced mixture of both -  condos and apartments - might have proven just the ticket.

Of course all this leads to the biggest question of all, what happens when todays condo buyer becomes tomorrows condo seller?  Traditional buyers will  move less frequently into the condo market whereas the condo market buyer transitions easily into the single family market.  Historically, in nearly every region across the U.S., condos do not perform as well as single family homes.  That means they typically don’t sell as fast, the buyer pool isn’t as big and values don’t seem to rise as quickly.  The American Dream remains owning your own home. Owning your own condo is still a great achievement, but it just isn't quite the same.

I think condo living has its plus and minus points as you can see.  With that said, I remind readers as always, buyers should beware.  Today’s condo bargain may be tomorrow’s financial loss. Definitely consider buying a condo if it’s right for you but, may I simply suggest, buy wisely.

At least you have lots to choose from in Condo City, I mean Grand Rapids :-).

Bridget Dupont-Tingley
Editor
The Local Area Watch

IT’S UP. IT’S DOWN. NO, IT’S REALLY DOWN. THE GRAND RAPIDS REAL ESTATE MARKET

The GRAR (Grand Rapids Association of Realtors) reported around this time last year there was about  4,300 homes/condos for sale. Today that number is close to 12,000.

Due to a major oversupply of properties in all price ranges, values have dropped and with credit tightening up, this trend is not expected to reverse itself anytime soon.  There is about a 9-12 month inventory of homes and condos on the market at this point. For those of you not familiar with real estate trends, that is high.  You have to go back to the late 80’s or very early 90’s to see that level of inventory in place. 

Realtors, developers, builders and mortgage brokers have a hard time admitting when things are not going well and they manage to put the pretty spin on things as much as they can. That’s understandable,  it’s their bread and better. But, we still have to be honest. Since they can’t say it so easily, I’ll do it for them – it’s a bad market. Even in bad times though, some come out ahead. That would be buyers with liquid cash and solid credit histories, investors and full time agents and builders with expert knowledge, longevity in the business and strong marketing skills. Unfortunately on the flip side, things not-so-good for sellers, new and small builders and part-time realtors. Let's not leave out of the equation all the businesses that are impacted when housing doesn't move quickly - title companies, appraisal companies, home inspection companies, vendors who do home repairs, home improvement firms, advertising and marketing firms, cleaning companies and more. Nearly everyone is impacted one way or another.

Per the most recent residential sales states from the MAR (Michigan Association of Realtors), it appears that real estate adventure seekers will need to strap in as the ride continues to look bumpy.  The average price of a home in Grand Rapids in August was $149,052, a drop of over 8% from last year. The number of homes that sold in August was 3.5% lower than last year.  Year to date homes sales are down about 5.3% over-all.   According to MAR stats, the total number of sales from January thru August have all seen negative trends.  Same with the average sales price, down consistently each month as well.   No month showed a gain so far in 2007.  With a quarter of the year left, experts don’t expect this downward spiral to get much better as the months go on.

As reported in the Detroit Free Press, based upon income, the number of Michigan households that can afford homes/condos per range are as follows;

0-99,000       - 35.0%
100-174,999  - 23.3%
175-249,999  - 16.9%
250-324,999  - 10.6%
325-399,999  - 5.50%
400-549,999  - 3.90%
550-699,999  - 2.80%
700-849,999  - 1.20%
850-1 million - 0.50%
1 mill +           - 0.40%

Any way you break it down, being in the 325K range and below is the place to be, both for buyers and sellers as the income pool is there. There is still an oversupply of homes in this range, but as the market comes out of it's funk (it will in time), this will balance out once a domino process of offers, sales and closings happen again. Higher end properties will still sell, but the buyer pool is going to be much smaller, market times will be extended and buyers can ask for greater reductions and concessions to get a deal to work out.

Per the MBA (Mortgage Brokers Association) recent updates, 43 of the states in our union are doing quite well in the areas of housing and over-all economy.  On the other hand, there are seven states that aren’t doing well at all.  Three of these seven lead the nation in foreclosures – those states are Michigan (lucky us, making the news again!), Ohio and Indiana.  These three have the highest level of delinquency and foreclosures and that is mainly due to the underlying economy in these states.  Four other states are showing housing troubles, they are Arizona, California, Florida and Nevada.  Factors that are contributing to these conditions include: high adjustable rate mortgages, declining housing prices which make refinancing difficult, high share of investor loans, sub prime mortgage woes and poor economic conditions. Ohio’s foreclosure rates have showed signs of leveling off even though they remain high. Michigan’s problems continue to escalate.  Michigan leads the nation with foreclosure starts with a rate of 1% of outstanding loans. Michigan ranks second in overall delinquency rates.  And finally, Michigan ranks third in foreclosure inventory numbers. We just can’t seem to catch a break in The Great Lakes State. We are first in too many ways we shouldn’t be.

With all this data as reference from the Free Press, MBA, MAR and GRAR, we can see why so many buildings are going up and so many being offered for sale but, there has been decreased interest, limited turnover and minimal closings. Even though the numbers in Grand Rapids are not anything to crow about, they aren’t as dismal as those found on the east side of the state. We may have it rough here on the west side, but they have it much worse in the Metro Detroit region.

Fortunately, as is the norm, this cycle will pass. Real estate always has its peaks and troughs, just like the stock market. We will weather this storm and experience clear skies again. The only problem is no expert knows for certain exactly when the storm will end.  Early 2008? Late 2008? Beyond?  Most predict more turmoil  well into 08' so, bundle up and plan for rain. On the positive side, at least you won’t melt.

Regards,

Bridget Dupont-Tingley
Editor
The Local Area Watch

WHY WE REMEMBER, WHY WE FIGHT

As the sun sets on another September 11th, I'm sure most of us have taken at least a moment today to reflect back to that bright blue sunny morning six years ago that started so quiet and serene, yet ended with such devastating and disastrous consequences.

A day spent watching massive buildings fall to the ground with such ease, like children's plastic toy blocks piece by piece. Watching with both horror and fascination as people ran in fear and shock covered in dust and debris as far away as they could get.  Watching first responders from police, port authority, EMS and firefighters battle through fire, flames and toxic gases in an attempt to save just one more life be it in one of the fallen WTC towers or the side of the Pentagon. Those 40 in Shanksville faired no better on Flight 93 a short while later.  We all watched from afar as tears fell upon pictures of lost loved ones trying to be found by their families and friends.  We all tuned into the news reports hungry for information to help alleviate our fears. That information went on for minutes, hours, days, weeks, months and now years.  How on that late summer morning of September 11th, 2001 a nation of close to 300 million was shocked to its core that nearly 3,000 of our own citizens had been destroyed by a hate so strong it sought us out with mind numbing determination.  How we all stood in silent acknowledgement that such evil had arrived on our shores, unwanted and unwelcome, but here nonetheless.

I put our flag at half staff today as I left for work this morning in a sign of respect for those who lost their lives so many years ago.  I also offered a silent moment of prayer, comfort and peace for those who died during that first awful 24 hour period and those who have continued to loose their lives ever since that day.  But, even as the day ends and the flag is returned to its proper position, these people I will never meet linger in my thoughts. None of my hopes can return them to their loved ones. None of my wishes can erase the hate that brought about this awful day. The best I can request is that we all remember those who have gone before us.   That we remember to say a word of thanks for our continued safety, especially to our military men, women and their families who protect us from every corner of this nation and around the world day and night so that we may continue to have the best that this world has to offer.

My final prayer is that the Islamic jihadists find no one else to kill.  But, unfortunately I know that is not a prayer that will be fulfilled right now. There is much work still to do before peace can prosper again.

I hope each of us willing to acknowledge the reality of our situation will take some time today, tomorrow or the day after to understand further why such darkness enveloped our world that morning of September 11th. That same evil from 9-11 is out there recruiting and indoctrinating a new generation to mistrust and dislike non-Muslims and they continue to expand their networks of hate throughout America and the world. Although many groups have been weakened and somewhat reduced in recent years, they have not been eradicated completely.  Our service men and women have been admirable in trying to defeat this modern foe, but their job is far from done. Our nation and people must not stop and must not give up as the mission is barely half done.  We need to remain strong, decisive and committed to stopping this evil before it consumes us and the world landscape completely.

Those of us who have a passing knowledge of history know full well most of our deadliest foes throughout the centuries have said what they mean and mean what they say. When they talk about removing a race of people from the face of the earth, take them at their word as they typically followed through on their threats (think Khan, Hitler, Mussolini, Lenin, Stalin, Chairman Mao, Pol Pot, just to name a few).  In our lifetime, we now we have UBL, his related and non-related fringe groups and the current President of Iran - Mahmoud Ahmadinejad. We deny history when we deny them and their powerful words about destroying us, our friends and our way of life.

When UBL invited Americans to come to Islam in his movie of the week broadcast a few days ago, he meant it. Convert now or expect another September morning in the near future. That's our option - Islam or death. He, his followers and those of his radical mindset (millions of them) mean it.   He made it clear to us, it is not about Iraq. It is not about capitalism. It is not about Middle Eastern oil. It is not about Democrats or Republicans.  It is not about being too American. It is not about the West. 

It 's about not being Muslim or Muslim enough. It's about Islam.

To understand more completely why September 11th happened and why there will be more days like this if we don't win this war against Islamic radicals, consider the following books:

Brigitte Gabriel - Because They Hate

Nonie Darwish - Now They Call Me Infidel

Mark Steyn - America Alone

Tony Blankley - The West's Last Chance

Robert Spencer - The Truth About Muhammad

Melanie Phillips - Londonistan

Steve Emerson - Jihad Incorporated

These books have all been reviewed here at L.A.W.   You are welcome to read my overview to see if these are books that will appeal to you.  Even if you choose to search elsewhere for information, at least look and learn.

I don't want bells of sadness being rung any longer for each life lost. I don't want days of remembrance when we have yet to destroy the ones who caused us grief to begin with.  I don't want more 9/11's if we can help it.  Until we understand, we cannot plan. Until we plan, we cannot win. Until we win, we live in fear or worse yet, we live in ignorance or denial altogether. Those are poor tributes to those who gave so much for all of us.

Remembrance and honor is important.  But, I want us to go much further than that.  We need to read, learn, understand, plan and eliminate the threat of Islamic ihadists once and for all.  Then, and only then, can the bells for complete victory ring out from sea to shining sea.

Regards,

Bridget Dupont-Tingley
Editor
The Local Area Watch

BRITISH PETROLEUM BACKS OFF ON INCREASED DUMPING TO LAKE MICHIGAN

Here are the latest developments on the British Petroleum waste discharge plan for Lake Michigan this year. See previous articles at L.A.W. for complete historical facts and figures.

DEVELOPMENT: Wednesday August 15th

The U.S. Environmental Protection Agency Regional Administrator Mary A. Gade convened a Lake Michigan Summit meeting in Chicago in order to provide an opportunity for major officials and interested parties to present BP representatives with their suggestions on minimizing discharges to Lake Michigan from the company's Whiting, Ind., refinery.  Region 5 representatives showed up such as;  BP Vice Chairman of America Stephen Elbert, Illinois representatives Biggert & Kirk plus Senators Durbin & Obama, Indiana officials such as Bay & Visclosky and Mr. Anderson from the Indiana Save The Dunes Council, Michigan representative Upton, Wisconsin representative Russ Feingold and a number of other interested individuals of environmental groups. 

Due to the enormous amount of negative press, local resident petitions and congressional pressure against the dumping move, BP and Indiana regulators agreed Wednesday to reconsider a permit that allows the Midwest's largest oil refinery to significantly increase
the amount of toxic waste dumped into the lake. In order to keep the pressure in place, an environmental group called  the Alliance for the Great Lakes also filed a formal appeal in Indiana asking a state environmental judge to block the permit from taking effect.

As reported in a detailed article last week by staff writer Michael Hawthorne of The Chicago Tribune,  seven different ideas were given by the EPA to counter the current dumping measures at this meeting:

Finance projects that reduce pollution from other companies that discharge into the Grand Calumet River or Lake Michigan.

Divert all or some of the refinery's wastewater to nearly municipal treatment plants. The Hammond Sanitary District, East Chicago Sanitary District and Gary Sanitary District are options.

Pay for sewer upgrades in neighboring towns to keep sewage and storm water out of Lake Michigan.

Set aside money to filter pollution that seeps into the lake. Projects could include wetlands, shoreline restoration or storm-water retention ponds.

Make additional upgrades at the refinery's water treatment plant to reduce the amount of pollution flowing into Lake Michigan.

Spend more money to dredge contaminated muck from the Indiana Harbor and Ship Canal.

Join Indiana to pay for other projects that remove contaminated sediment in the Grand Calumet River.

Few in the meeting voiced any support for these creative proposals to offset the additional BP waste discharge pollution with other projects that would help clean up Lake Michigan. The group stayed focused on the need for BP to meet the long-standing goal of reducing and eventually eliminating pollution in the Great Lakes, the world's largest source of fresh surface water.  Federal and state regulators contend they have no legal authority at this point to rescind the permit. Although the meeting showed all sides willing to take a look at things, neither BP nor the state of Indiana would commit to a specific solution at this time.

Chicago officials said they've found several technologies in use at other refineries that dramatically reduce ammonia and suspended solids. They pressed BP official Elbert to explain how more water treatment equipment couldn't fit on a site as large as the Whiting refinery.  This was a question the Vice Chairman said could not answer at this time.

All left the meeting last week feeling warm and fuzzy, but with no definitive changes noted.

News flash to this week...

DEVELOPMENT: Thursday, August 23rd

BP announced today that it won't dump more pollution into Lake Michigan.

In a statement posted on British Petroleum’s web site, BP pledged to continue to meet its previous pollution limits once it completes a $3.8 billion expansion of its Whiting, Ind., refinery, 3 miles southeast of the Illinois-Indiana border.  BP America today promised to operate its Whiting refinery to meet the lower discharge limits contained in the refinery's previous wastewater treatment permit. 

BP America Chairman and President Bob Malone notes the following in today’s press release, “We have participated in an open and transparent permitting process with the State of Indiana and obtained a valid permit that meets all regulatory standards and is protective of water quality and human health.  Even so, ongoing regional opposition to any increase in discharge permit limits for Lake Michigan creates an unacceptable level of business risk for this $3.8 billion investment."  Malone flew to Chicago to deliver the news personally to Mayor Richard Daley, one of several politicians who said the company's initial plans were unacceptable to people who rely on Lake Michigan for drinking water and recreation.

During the next 18 months, BP advises citizens it will continue to seek issuance of other permits, continue project design and explore options for operating within the lower discharge limits.  Furthermore, at the request of US Representatives Judy Biggert (R-IL) and Pete Visclosky (D-IN), and with the support of BP America President Bob Malone, scientists at Argonne National Laboratory and Purdue University Calumet will explore emerging technologies that could address wastewater treatment affecting the Great Lakes.

BP America notified the State of Indiana of its decision late yesterday afternoon and reiterated its dedication to the proposed refinery expansion.

"We are committed to this project.  It is important for the nation, it is important for the Midwest, and it is important to BP and to the thousands of BP employees in the State of Indiana," Malone said. "We are going to work hard to make this project succeed.”  He also noted, “We will not make use of the higher discharge limits in our new permit.  We're not aware of any technology that will get us to those limits but we'll work to develop a project that allows us to do so.  If necessary changes to the project result in a material impact to project viability, we could be forced to cancel it."

The exact press release letters by the Vice Chairman, President and congressional representatives can be viewed at:   www.bp.com.

So fellow citizens of River City, West Michigan and the Great Lakes, a temporary victory appears to be in order. There will be no change in the refinery discharge to Lake Michigan until at least 2011.  BP appears to be working toward new technologies that will lower their discharges before their permit is up for renewal in 2012 (their wise President might have wanted to consider that before the firestorm erupted earlier, but who says he gets paid for looking ahead, right?  They’re advertised as “green” after all, not “brilliant visionaries”). There was no discussion about reducing the current limits of discharge still being allowed by the lakes largest polluter - good ole' BP. Current discharge levels, ok. Increased discharge levels, thumbs down. Reduced discharge levels, not an item up for discussion. One step at a time people, one step at a time.

Many will ask what happens after 2012? Well, that story is still to be written.

So, fish, swim, boat, drink the water and enjoy the bounty we have in our backyards.  Lake Michigan is secure from BP additional waste discharge…for now.

Regards,

Bridget Dupont-Tingley
Editor, The Local Area Watch

BP (BRITISH PETROLEUM) & LAKE MICHIGAN - MORE RED FLAG DAYS AHEAD

Quick update to our readers on the British Petroleum increased dumping situation on Lake Michigan.

As reported by Michael Hawthorne in The Chicago Tribune earlier today, Stephen Johnson, Administrator of The U.S. Environmental Protection Agency, was quoted as saying he and the agency are standing behind the permit that was granted by them to Indiana regulators and BP in June to allow increased dumping into Lake Michigan.  With this permit, BP is allowed to not only increase sludge and ammonia levels pumped into the lake, but also allows BP to avoid meeting stringent mercury reduction levels for the next five years as well.

Johnson was questioned during a conference on how the permit to BP and Indiana remains in line with the EPA’s earlier goal of keeping the lake clean and as pollution free as possible? The original EPA permit dealing with the Clean Water Act of the 1970’s was clear that NO increase in pollution was allowed. What gives?  The answer Johnson provided, “the agency spends hundreds of thousands of dollars every year cleaning up polluted sites around the lakes”.  Thinking minds might inquire, wouldn’t it be smarter to not pollute at all and thus, not need to spend hundreds of thousands of dollars cleaning up old AND new waste?  Guess common sense got flushed down the drain along with the extra waste.

The Tribune’s detailed article reminded readers that three years back, BP along with a half dozen other companies settled an EPA complaint and paid out a combined $56 million to clean up the Grand Calumet River,  Indiana Harbor and Ship Canal, a heavily industrialized waterway that had washed millions of pounds of contaminated waste into Lake Michigan.

Regardless of a censure of disapproval resolution by Congress that passed with flying colors and in person requests to revoke the permit, The EPA is standing by it's decision.  The permit will not be revoked.  Increased discharge remains approved. It looks like we will need to put BP on an honor system of finding another site to dump extra waste since the congressional resolution that passed is simply a smack on the wrist of a company doing bad and The EPA has decided they’d rather clean up additional waste sites rather than stopping the problem from beginning in the first place.

British Petroleum spokespersons and Indiana regulators continue to insist that  their increased refinery production and requested special permits will pose no threat to our local environment.  They assure the Great Lakes region that they will keep as much pollution out of Lake Michigan as possible.  Why is it that those of us who use the water for  everyday living, swimming, hunting, fishing, drinking and pure enjoyment, are still uneasy?  Probably because their track record makes such claims dubious at best.

I guess I shouldn't be disappointed by such a ruling by The EPA. Afterall, it's groups like them and The Michigan DEQ that turned a blind eye to all the evidence in the Berkey & Gay Factory and Toxic Towers dumping scandal right here in Grand Rapids, Michigan. I guess if these two groups couldn't properly decipher toxic soil analysis reports, understand video tapes of toxic wate being removed without authorization and false statements by all involved developers and construction crews who claimed "they did no wrong" yet the evidence showed to the contrary...why should we assume they would rule any differently when a company like British Petroleum wants to increase sludge, ammonia and mercury discharge before our very eyes?  In the BP case, waste gets to be diluted out in the Big Lake. Problem solved.

There is clearly no "protection" for you and I, when it comes to The Environmental Protection Agency.  Whether you live in Grand Rapids, on the Big Lake itself or anywhere in between.

Congress tried to raise the yellow flag and urge caution when it came to increased dumping in the Great Lakes - especially Lake Michigan.  Unfortunately, verbal and written censure does little.

BP got the green flag for all systems full steam ahead - increase refinery production and pollution-a-go-go.

You and I get the red flag warning for rough waters ahead and I don't mean just big waves – swim at your own risk.

Regards,

Bridget Dupont-Tingley

Editor, The Local Area Watch

THE PUBLIC HAS SPOKEN - BP DISCHARGE ON HOLD

Faced with angry letters, activist e-mails, heated meetings and calls of dissent by Congress, lobbying  groups and everyday Americans like you and I, oil giant British Petroleum announced that they have put on hold until September 1st (possibly longer) its plan to proceed forward with increased refinery production and corresponding increased dumping of more waste into Lake Michigan.

Senators Durbin (D-IL), Stabenow (D-MI) and additional House Members met with BP officials at noon on July 24th to show their dissent. BP sent along their chairman and President of BP America, and the manger of the oil refinery at Whiting to address the concerns raised. Congress was requesting that the EPA step in and reverse the authorizing of the permit. Although BP appeared open to other ideas for waste removal, no alternatives have emerged yet. Thus, the time between now and early fall will be a window of opportunity to reverse the trend in increasing oil production at the expense of the Great Lakes fish, wildlife and humans nearby.   All parties concur, the goal is to protect the eco-system of Lake Michigan and the residents who live around it.

On July 25th, further developments occurred as noted by a press release issued from Congressman Vern Ehler's office.  In Washington D.C., The House passed legislation that condemned the proposed increased dumping of contaminants in Lake Michigan.  This is the resolution that had been proposed earlier by Congressmen Ehlers (MI) and Emanuel (IL).  House Congressional Resolution 187 expressed the following disapproval, “The Indiana Department of Environmental Management’s issuance of a permit allowing BP to increase their daily dumping of ammonia and total suspended solids into Lake Michigan” and  notes, “The United States Environmental Protection Agency should not allow increased dumping of chemicals and pollutants into the Great Lakes”.

The bipartisan measure overwhelmingly passed the House by a vote of 387 to 26. 

The Great Lakes caucus in Washington D.C. applauded the House for taking this stand and passing this simple yet, important resolution.

Congressman Ehlers has these thoughts for his constituents, “I support expanding refinery capacity in North America, and I believe projects such as this one can help drive down the price of gasoline for consumers.  But, I do not believe that the benefits of this project should come at the expense of our most precious natural resource.  The Great Lakes are the world’s largest freshwater system and serve as a source of drinking water, food, jobs and recreation for more than 40 million Americans”.    Furthermore he notes, “The increases in discharge permitted by the Indiana Department of Environmental Management are not consistent with the regional goal of keeping the Great Lakes clean and healthy for everyone.”

We'll stay tuned through the fall to see if the EPA revokes the permit they issued earlier, if BP will still increase refinery production and have an alternative site for the increased waste produced or if other things altogether are proposed.

So, everyone surrounding Lake Michigan and the Great Lakes region can breath a temporary sign of relief.  No increased dumping…at least for awhile.

Regards,

Bridget Dupont-Tingley
Editor
Local Area Watch