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EAST CHICAGO, Ind. -- Oily, toxic muck has been choking the waterways of this industrial town on the southern tip of Lake Michigan for the last three decades, hampering local shipping and poisoning the environment.

But now that the federal government has finally started a $370 million project to clean up one of the most polluted sites in the Great Lakes region, local residents and environmental groups are charging that the remediation jeopardizes the health of the racially diverse community.

Even as the U.S. Army Corps of Engineers forges ahead, pulling concrete debris from an inspection trench on the site where the contaminated sediment will be dumped, opponents are lobbying for the current plan to be abandoned. If the project is delayed even further, however, officials warn that the undesired material could seep back into Lake Michigan as it did in the old days, threatening drinking water supplies and aquatic life.

"We know the canal needs to be dredged, but it has to be done the right way," said resident Colleen Aguirre, a member of several local environmental groups.

The long-awaited Army Corps project calls for scooping out millions of cubic yards of contaminated sediment from the beleaguered Indiana Harbor and Ship Canal for the first time since 1972. Over the next three decades, the material would be deposited inside a specially constructed landfill on the outskirts of East Chicago. The open-air site would eventually be capped while ground water monitoring would continue at least through 2065.

Though the disposal site is half a mile from a high school and a middle school, a federal study concluded the project does not put the community at risk, and another study looking at the potential health effects is under way. Meanwhile, the venture would deepen the channel for shipping and reduce the amount of polluted sediment being discharged into Lake Michigan near water intake pipes.

Threat of more pollution

But in this struggling steel town, where the air already smells of the chemical benzene and the waterways are uninhabitable, the polluted sediment is considered another threat.

Environmental groups object to the Army Corps' decision to place the open-air sediment storage facility at the former Energy Cooperative Inc. site--a razed oil refinery that is now a brownfield--because of its proximity to the schools. Opponents also say the Army Corps isn't dredging deep enough for environmental benefits, and the planned method could stir up more toxins than other, more expensive techniques. Partial dredging will pollute Lake Michigan worse than if the sediments were left in place, said Kim Scipes, executive director of the Calumet Project.

But in this case, the contaminated sediment can be picked up during floods or by waves, or stirred up by passing ships, according to the U.S. Environmental Protection Agency. Once the particles are re-suspended, they can be swept into Lake Michigan, where they may harm fish and other organisms.

"They're not using latest and newest technology," said Aguirre, who calls herself the "token environmentalist" on the East Chicago Waterway Management District board, the local agency collaborating with the Army Corps on the project. "They're using the cheapest because there are minorities here, and they don't fight back. This time they are."

The Army Corps, responsible for maintaining federal navigation channels, says it is still investigating the dredging technology, and has scheduled a community meeting for April. Meanwhile, the Corps is not scouring down to clean sand--which environmental groups would like--because it is only authorized to dredge to certain depths to support navigation, Army Corps officials said.

"It doesn't mean in total we can't go further, it just means under one authority, we can only go so far," Army Corps spokeswoman Lynne Whelan said. "[It's possible] to combine authorities and dredge deeper."

Priority for barges

The shipping industry, which cannot get fully loaded boats through the sludge, wants the canal dredged as quickly as possible to avoid light loading, less efficiency and higher costs. For each foot of accumulated sediment, the larger ships must leave behind 3,156 tons per trip, according to the Lake Carriers' Association.

"We can still ship but we've lost a 10 percent efficiency on the movement of cargo," said association president Jim Weekly. "Dredging is important to our long-term survival. And the problem will get worse, not better."

From an environmental standpoint, the delay means the sludge continues to reach a source of fresh drinking water. Each year, an estimated 200 million pounds of polluted sediment flows into Lake Michigan from the Indiana Harbor and Ship Canal and the Grand Calumet River, according to the EPA.

That is in addition to the pollution from the area's intense industrial past. From the early 1900s through the 1960s, steel mills, chemical manufacturing sites, lead-processing facilities, oil refineries, metal finishers and other industries discharged both treated and untreated wastewater into the Indiana Harbor and its upstream feeders--the canal and the Grand Calumet River.

The Army Corps used to routinely dredge the abused harbor and canal and dump the sediment in Lake Michigan. But in 1972 the EPA banned that practice because of the level of pollutants.

Since then, industry continues to discharge wastes, but the Indiana Harbor and Ship Canal hasn't been dredged because, not surprisingly, no one wanted the sediments. Among the toxins are heavy metals, polychlorinated biphenyls (PCBs), polyaromatic hydrocarbons (PAHs)--a group of over 100 different chemicals formed during the incomplete burning of coal, oil, gas and garbage--oil and grease.

East Chicago dump site

In 2000, the Army Corps finally found the contaminated site of the old oil refinery, which is owned by East Chicago and rife with petroleum hydrocarbon contamination. While longtime East Chicago Mayor Robert Pastrick said he isn't thrilled with the location, the city couldn't handle the environmental mess on its own.

"Unfortunately this is the only site under consideration and the only one the federal government gives funds for," said Pastrick, whose town's population is more than 85 percent minority. "We've had enough problems with bankruptcy of [steel mill] LTV and other effects of steel industry without getting into a fiscal situation like that."

Air quality monitors were set up in 2001 on the perimeter of the site and near East Chicago Central High School to establish baseline levels, and to answer residents' questions about chemicals in the air. The results have only made them angrier; they charge that the Army Corps' own data shows the area is a public health threat with dangerously high levels of carcinogens, including naphthalene and PCBs.

But Scott Cieniawski, an environmental engineer with EPA's Great Lakes National Program Office, calls Northwest Indiana "a typical metropolitan area" in terms of air quality. As sediment starts to dry and vegetation grows on top of the landfill, the amount of contaminants released into the air is greatly reduced, he said.

"From a preliminary review, it's not much different than sites around the city of Chicago," he said. "The levels associated with the [disposal facility] are two orders of magnitude below what is expected for background."

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