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Hyperion: Refinery will be up by 2015
News Articles | Argus Leader | Thom Gabrukiewicz | August 20, 2010
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In theory, the candidates running for South Dakota governor support the Hyperion Energy Center planned near Elk Point but have concerns about whether the Dallas-based company can gather the financing it needs to move forward.
Republican Dennis Daugaard and Democrat Scott Heidepriem weighed in on the refinery project during their debate Wednesday at Dakotafest.
Hyperion Resources wants to build a $10 billion oil refinery and power plant on 3,800 acres of rolling farmland near Elk Point. The refinery would process 400,000 barrels of Canadian tar sands crude oil a day.
The company, which won court approval in June to have a state board reopen the permitting process, still maintains the refinery will be up and running by 2015.
“From the beginning, we have not commented on specifics regarding our financing, but I can tell you that in the past six weeks, we’ve seen a real up-tick in inquiries from potential investors, wanting to be ahead of the curve when the economy does come back,” said Hyperion spokesman Eric Williams. “Remember, our startup is scheduled for 2015, so the economy has substantial time to become more robust before we’re producing ultra-low-sulfur gas and diesel. Investors see that as an opportunity.”
Despite the assurances, the candidates told the Dakotafest crowd that getting the refinery and power plant built in today’s jumbled economic times was worrisome.
“I’m not sure, I don’t know, there’s a couple of problems that we face today, as the national recession has taken hold, the demand for refined fuel products has gone down, some refineries on the Gulf Coast have closed down, so I question whether a new refinery would be built or financed,” Daugaard told the Dakotafest crowd. “The other aspect is credit. Everyone knows, if you’ve gone to the bank lately, credit is tight.”
Williams said the Hyperion project is different than any other refinery proposed in the past 40 years. Indeed, if Hyperion is built, it would be the first new U.S. oil refinery constructed since 1976.
“Our refinery is being constructed to process the heavier crude, and in the long term, there will be significant need for new refining capacity to handle those heavier slates of crude,” Williams said. “The refineries that have been closing are less complex and not capable of refining the crude that’ll be produced over the next several decades. So in reality, the situation gives us a competitive advantage.”
Daugaard said Union County residents want the project – the vote to rezone the land in 2008 was 58 percent for and 42 percent against – and that it represents a boon for the state in terms of jobs, tax revenue and economic development.
“At present, I do (support the project),” Daugaard said. “I think we need to continue to watch, and hold their feet to the fire, to be sure the environment is protected.”
The state, Heidepriem said, needs to follow its own statutes on environmental impact statements. In 2008, Heidepriem wrote a letter to Department of Environment and Natural Resources Secretary Steve Pirner to hire an independent consulting firm to review the environmental effects of the proposed oil refinery and power plant.
The state chose not to do an independent review, with Pirner saying the agency’s analysis was more thorough than what was required by a state environmental impact statement.
“To sit here and say that it’s going to be a green refinery, safe for the environment, is something none of us know,” Heidepriem said. “There have been delays consistently, and I think that raises a question in anyone’s mind about whether they have the capacity to move forward.”
But if the project followed an independent state review, the state senator said, then he could support it.
“Hyperion could be a good partner for South Dakota,” he said.
The project always has been sold along the lines of security against terrorism and the lure of jobs to southeastern South Dakota. Hyperion officials said they would employ 4,500 people during construction and have 1,800 permanent jobs once the plant is in production.
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“I think it’s good for our country, we don’t have the refineries to refine the oil we’re bringing in,” said Elk Point Mayor Isabel Trobaugh, a supporter of the project. “We need to become independent somehow, without being dependent on these foreign countries that don’t like us. Of course, it has to be monitored, but that’s why it’ll be good for the whole country and good for Elk Point.”
Opponents said they don’t think the economic gains are worth sullying the area’s air, water and land resources.
“Too often, the conversation about Hyperion is confined to the jobs and revenue to be created by this proposal,” said Peter Carrels, a regional representative for the Sierra Club based in Aberdeen. “If we are to have an honest debate about it, we’ve got to consider all aspects of this proposal – including the certain threats to public health and the environment.”
Those concerns have pushed into Iowa, where the state’s former director of the Department of Natural Resources, Richard Leopold, wrote a letter last month to South Dakota officials, urging them to fully consider the air and water effects on Iowans.
“I think it’s good for our country, we don’t have the refineries to refine the oil we’re bringing in,” said Elk Point Mayor Isabel Trobaugh, a supporter of the project. “We need to become independent somehow, without being dependent on these foreign countries that don’t like us. Of course, it has to be monitored, but that’s why it’ll be good for the whole country and good for Elk Point.”
Opponents said they don’t think the economic gains are worth sullying the area’s air, water and land resources.
“Too often, the conversation about Hyperion is confined to the jobs and revenue to be created by this proposal,” said Peter Carrels, a regional representative for the Sierra Club based in Aberdeen. “If we are to have an honest debate about it, we’ve got to consider all aspects of this proposal – including the certain threats to public health and the environment.”
Those concerns have pushed into Iowa, where the state’s former director of the Department of Natural Resources, Richard Leopold, wrote a letter last month to South Dakota officials, urging them to fully consider the air and water effects on Iowans.
Tagged with: south dakota, finance, elk point, hyperion refinery
