More than a decade ago, the $4.2 billion BP Whiting Refinery Modernization Project was a major shot in the arm for the Calumet Region economy, a boon that meant steady work for skilled tradesmen for years and a windfall that made local union coffers flush.
As many as 14,000 construction workers toiled between 2008 and late 2013 to convert the former Standard Oil Refinery on the Lake Michigan lakefront to refine heavy crude from the oil sands region of Canada after the axis of oil production shifted.
It was the largest single private-sector investment in Indiana history.
But the upcoming Midwest Regional MachH2 hydrogen hub mega-project at the BP Whiting Refinery likely will be much larger, U.S. Rep. Frank Mrvan, D-Highland, said Friday.
The U.S. Department of Energy has pledged $1 billion to build a hydrogen production hub in Whiting that would serve industry in Indiana, Illinois and Michigan, helping them reduce their carbon emissions by giving them an alternative to fossil fuels. The private sector has to chip in at least another $1 billion as matching funds.
But the private sector funding for the massive project is expected to fall between $5 billion and $8 billion, Mrvan said. Building the hydrogen hub at Whiting would employ more than 16,000 skilled union tradesmen for years, he said.
That's roughly the population of Griffith.
"The hydrogen hub, which is part of the infrastructure bill, that will be built at BP Amoco will create 16,000 construction jobs. Working men and women, the construction trades, will put that together," Mrvan said. "It's a $1 billion investment from the Infrastructure Bill with an additional investment from BP of up to $5 billion to $7 billion to $8 billion. It will be a larger project in dollars and workers. BP has committed to the private investment and BP isn't the only company that will be investing. U.S. Steel, Cleveland-Cliffs, Cummins, Rolls-Royce, NiSource, all of these industries are partners and are going to be benefiting from the hydrogen hub and utilizing it for their new technologies."
That price tag could more than double recently announced mega-projects like the $3.2 billion Stellantis and Samsung SDI plan to invest in an electric vehicle battery plant in Kokomo, and the $3.5 billion GM and Samsung are pumping into an electric vehicle plant near New Carlisle in St. Joseph County.
"This is big-time stuff," said U.S. Department of Energy Under Secretary for Science and Innovation Geraldine Richmond, who was hosted by Mrvan Friday on a visit to Northwest Indiana.
The total cost of the hydrogen hub is expected to be around $6 billion to $9 billion, Northwestern Indiana Building & Construction Trades Council Business Manager Randy Palmateer said. It's expected to be built at one of three 80- to 100-acre sites within two miles of the refinery.
Construction would start in 2025, Palmateer said.
"Our apprenticeship programs have increased across the board by 25% to 30% to meet the demand of the upcoming work, mainly the hydrogen hub," Palmateer said. "All our affiliates are taking more apprentices so we're ready. On paper, the BP Whiting Refinery Modernization Project was around $4 billion. It was closer to $6 billion. This is going to be $4 billion to $5 billion more than that. It's going to lead to ancillary projects with hydrogen and carbon sequestering jobs up and down the lakefront. That's going to be the new norm. Hydrogen is going to be a major jobs giver for Northwest Indiana."
Union tradesmen will need to work on related projects, such as extending hydrogen pipelines to the steel mills and building truck terminals for shipping hydrogen to more far-flung customers, Palmateer said.
"It's going to be an awesome project. It's going to create tons of jobs," he said. "It's going to be steady work not just for the construction but for the maintenance and upkeep, like at the refinery and steel mills. It will be nonstop work. We'll have manpower out there for the upkeep and maintenance. It's good stuff for the Region. The future looks bright for construction."
The construction of the hydrogen hub could take six to 10 years, Mrvan said.
"It will probably be larger than the modernization with the asphalt. The modernization was around $4 billion to $5 billion. This is expected to go over that," Mrvan said. "The dollar amount isn't what's important. It's the products we're going to be developing after that. The utilization of the steel industry to decarbonize, we talk about that loosely. What it means is that it makes our steel industry more competitive globally around the world, to be able to hit those marks. That extends the steel industry and all the workers, the men and women working at the steel industry and all the contractors at the steel industry. That creates jobs there also. It's the gift that keeps on giving when you talk about economic development and cleaner air and cleaner water, making sure we are in the cutting edge in the world in making our steel."
Injecting hydrogen into blast furnaces will allow Northwest Indiana's integrated steel mills to remain sustainable at a time when there's increased global pressure to combat climate change by eliminating carbon emissions.
"We're advancing the technology to allow our local mills to be competitive in a global market," Mrvan said.
The U.S. Department of Energy funded hydrogen hubs across the nation to ensure the whole country was covered.
"The competition for these hubs was immense," Richmond said. "States all over the country put proposals in. I can't even describe the work that went into this. To be a winner is enormous. There are a lot of disappointed states out there. That this site got chosen as a hub, the whole region should be proud. As a born Midwesterner myself, that's why I'm so particularly proud of this one. People get a sense that all that big stuff goes to the coastal regions or the big cities. In this case, it's sitting right in the heartland."
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