Other Koch companies sell petcoke for use as industrial fuel, often in countries with more lenient environmental laws. The largest independent petcoke marketer in the U.S., Oxbow Corp., is owned by William Koch, brother of Charles and David.

China is by far the largest buyer of American petroleum coke exports, which increased to 26 million barrels last year from 2.1 million barrels in 2007, according to federal records. Much of the coke is burned in coal-fired power plants and contributes to the country's air pollution problems.

Faced with increased competition from low-cost natural gas, several U.S. power plants are adding refinery waste to their fuel mix or testing whether it could be a less expensive alternative to coal. At least 13 percent of the 3.9 million tons of petcoke burned by power plants last year came from companies owned by the Koch Brothers, according to industry records compiled by the federal Energy Information Administration.

Petcoke is about 25 percent cheaper than coal. "It's priced to move," said Kerry Satterthwaite, a senior analyst at Roskill Information Services, a commodities analysis company based in London.

But it must be mixed with coal because it doesn't burn as easily. And questions remain about whether power plants can burn larger amounts without violating anti-pollution rules.

A website that tracks cargo ship movements shows that one power plant that has accepted shipments from the KCBX sites in Chicago is the TES Filer City Station, across Lake Michigan near Manistee, Mich. In 2008, the U.S. EPA fined the plant's owner for violating its air pollution permit by burning too much petcoke.

Lorne Stockman, who recently published a study on petcoke for the environmental advocacy group Oil Change International, said the surge of refinery waste is a largely unrecognized challenge to President Barack Obama's plans to reduce greenhouse gases linked to climate change.

Transporting more Canadian tar sands through the proposed Keystone XL pipeline would create even more waste at U.S. refineries, Stockman said.

"It's cheap and attractive to industry, especially in China, Mexico and India," he said. "But it's horrible for the planet."

In Chicago, there have been uncovered piles of coal and petcoke along the Calumet River for years, a legacy of the now-shuttered steel mills, coke plants and blast furnaces that once dominated the area.

Community activists say dust problems have worsened since the storage terminals began acquiring more petcoke, though the specific source of the black grime seen on many houses is unclear.

Besides the two KCBX terminals, a third petcoke storage site on the river is owned by the Beemsterboer family, who in 2011 lost a bid to sell state pollution credits to a New York-based company that wanted to build a new power plant in the neighborhood. The plant would have burned a combination of coal and petcoke.

Air pollution already is a chronic problem in the neighborhood. A monitor at Washington High School routinely registers the state's highest levels of the toxic metals chromium and cadmium, as well as sulfates, which can trigger asthma attacks and increase the risk of heart disease.

Neighborhood groups want Illinois to adopt regulations similar to those in place in California, which requires piles of petcoke, coal and other raw materials to be enclosed or covered.

A handful of neighborhood representatives met last month with KCBX officials, who refused to include an attorney from the Natural Resources Defense Council, a national environmental group that has been assisting local activists.

Peggy Salazar of the Southeast Environmental Task Force noted that city officials have long promoted the area as showcase for green projects. A few blocks north of the petcoke piles, the city has given significant support to a developer who wants to turn the former U.S. Steel South Works site into a mecca for energy-efficient housing and businesses.

"How is our neighborhood ever going to recover and attract jobs if these black clouds of dust keep blowing?" said Salazar. "We shouldn't have to live with this every day."


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