January 17, 2012 at 12:26 pm #1977
SD Judge asked to Throw Out Oil Refinery Permit
Opponents of proposed Hyperion oil refinery ask judge to strike down state permit for project
By Chet Brokaw, Associated Press Writer | Associated Press Thu, Jan 12, 2012 9:14 PM EST
PIERRE, S.D. (AP) — Opponents of a proposed $10 billion oil refinery urged a judge Thursday to strike down a state permit that would allow the project to be built in southeastern South Dakota.
A lawyer for three groups opposing the Hyperion Resources project said the air quality permit approved in September by the state Board of Minerals and Environment was flawed because the environmental study was not thorough enough and the permit does not require stringent enough technology to control pollution.
The more thorough environmental analysis is needed because the project, which would be the first U.S oil refinery built in three decades, would have a huge effect on people who live near the proposed site, said Robert Graham, a lawyer for the three groups opposing the project.
“This is a project of great size, great impact, great environmental impact,” Graham told Circuit Judge Mark Barnett of Pierre.
But Assistant Attorney General Roxanne Giedd, representing the Board of Minerals and Environment, said there was no need to prepare a full-blown environmental impact statement. The board’s consideration of the permit and the conditions attached to the air quality permit took into account all relevant environmental issues, she said.
“This is not some made-up analysis. This is a very rigorous analysis,” Giedd said.
Barnett said he will issue a decision soon because he knows the case will be appealed to the South Dakota Supreme Court. He said he will rule on whether the board applied the law correctly or made any clear errors in assessing facts in the permit.
The revised air quality permit approved by the state Board of Minerals and Environment also extended the deadline for starting construction until March 2013.
Hyperion’s proposed refinery north of Elk Point would process 400,000 barrels of Canadian tar sands crude oil each day into low-sulfur gasoline, diesel, jet fuel and liquid petroleum gas. It would be the first new U.S. oil refinery built since 1976.
The project would include a power plant that produces electricity for the refinery. It would use a byproduct of the refinery process, solid petroleum coke, which would be turned into gas and burned to produce electrical power.
Hyperion, based in Texas, contends the refinery would be a clean, modern plant that would use the most advanced, commercially feasible emission control technology.
The Sierra Club and two local groups, Save Union County and Citizens Opposed to Oil Pollution, argue the refinery could emit too much pollution and hurt the quality of life in the rural area.
The Board of Minerals and Environment originally issued an air quality permit in August 2009 that called for construction to begin by Feb. 20, 2011, but company officials said the project was delayed because the recession caused problems in securing financing. The original permit also was appealed in court, and Barnett sent the case back to the board for some further proceedings.
The board issued the revised permit in September, approving changes to reflect updated national air quality standards and new pollution-control technology. The revised permit also gives Hyperion until March 2013 to start construction.
After the hearing, Hyperion Vice President Preston Phillips said efforts are progressing to secure financing and an oil supply for the project. “We have to perfect this air permit before we can finalize those aspects,” he said.
In Thursday’s hearing, Graham also argued that the board was wrong to extend the deadline for construction to begin. The original permit expired last February, and Hyperion should wait to seek a new permit based on the latest standards and technology when it is ready to begin construction, he said.
But Giedd and Hyperion lawyer Rick Addison said the company took the right step in seeking revisions to the original permit and an extension of the construction deadline.
Barnett said when a project is tied up in a court appeal, a company would be unwise to begin construction without knowing whether the project would ultimately survive that court challenge. That could justify suspending the construction deadline during an appeal, he said.
January 17, 2012 at 12:27 pm #4758
<Check out my previous Coming.com News Post Hyperion : Refinery @ 8/21/2010 Hyperion Coking Refinry Update, 5/2/08 Update Oil P/L Poll SDakotans back Refinery & PL and Members Coking @ 8/21/07 First Ref US since 1976 planned, and @ 6/18/07 Project Gorilla – Hyperion eyes S.Dakota >
Here is update on Hyperions S. Dakota attempt at installing US first new (but is US 2nd attempt just behind Arizonas Yuma Grassroots refinery which is having same issues) refinery since 1976 (originally called project Gorilla and first announced in 2007 time frame after spending a couple years in Planning / FEED stage. We are now in 6th year of this $10 Billon coking refinery trying to get thru process (couple years can be discounted due recession caused financing recall). Even though nearly everyone in State/Local level (polling show 65-81% in favor) has been for this plant its permit ,even though approved by EPA/State),has been kept in limbo by repeated law suits by Elite Environmental Nimby groups like Sierra Club.
This is great example of what is wrong with US manufacturing & job creation. A few wing-nuts get to repeatedly throw up roadblocks until they kill a project or bankrupt project finance. Worse is that they not the Government or the people seem to be ones directing (especially in todays liberal administration) EPA actions. Hyperion has had permits approved since 2008 and time extending after each lawsuit blockage this being the latest attempt.
If the US isnt allowed to build new plants, and existing ones are 60-100 years old there is no way for US to remain competitive especially when these same NIMBY groups allow countries like China now worlds pollution leader – to put up several new worldscale grassroot refineries every year. Here is your reason the US gas prices are going up, reason plants have close and jobs are lost and cannot be recreated. Since the US Media is ~same liberal environmental mind set as these elite groups it never covers them as causative agent and instead focuses on Big Oil as cause & Green Energy as solution.
Both the US East Coast and West Coast are now poised for Gasoline & Diesel crisis because of these predatory environmental tactics closing outdated & exhausted refineries (once home to 3 of 7 states creating 75% of US demand) that oil companies have no chance of replacing with grassroots replacements.
January 17, 2012 at 7:42 pm #4753
Here is good offline question – that helps show why closing US refineries has domino effect & its not about just gas prices from imports.
Q: Charlie – I get the impression that the Sierra Club and their henchman would love to
shutter all US refining capability. All our coastal facilities could turn
into massive receiving terminals and tankage for distribution.
I’m the type of guy who owns two cars just so I have a spare and could
still function if one were to break down. I am strongly against our nation
being subservient to foreign powers, but for a second lets assume these
powers stay at piece and are willing to supply us with uninterrupted
refined petroleum products.
Logistically, is there anything fundamentally stopping this from working
(continue to pretend there are no Ahmadinejads or Chavezs)? We’d pay more
for transportation. The price to refine would be cheaper due to newer and
more efficient facilities. Also, these foreign locations would not be
subject to the beyond stringent water/air emission standards facing the domestic producers.
Thanks – I will have do “Cliff Notes” version of answer for you on US plants becoming just “terminals”.
First look at Europe & rest world gasoline/diesel prices – its 2X US at $6-8/gal …. thats where you go to
once we become dependent consumer. Second – its not just transportation & logistics cost that take the hit
on removing US refineries & rely on imports.
Your states who use asphalt more than cement patch and repair roads cost go from $250-400/t to above +$600/t that
becomes more expensive than cement but has be replaced every year. We have roads & bridges that are currently unsafe
because our bankrupt governemnt cant pay replace them. When asphalt prices spiked (due high sour crude/low asphalt prod/high demand) many local, state & fed programs had chose which road repairs to cut because budgets were fixed.
Then you move to agriculture that depends on cheap farm diesel/propane/fertilizer- of few remaining Farmer Coop fertilizer plants that run on petcoke & hence were not bankrupt by Nat Gas @ $6-10/MMBTU are helping to keep fertilizer below $300/t – which we now import, prior 2004 we were exporter Fertilizer that sold it $100/t.
Also due fertilizer & diesel cost …. forget Ethanol production or triple subsidy.
The FCC decant/slurry oil that goes into Carbon Black for tires/rubber production or your printer/xerox copy machine for toner – you now have import EU or elsewhere at more $1/lb…..
You dont just import products and keep any US business above water -more half US cost increase in most products are result of stupid and unnecessary legislation for emissions which have shutdown half US Refineries that were better emitters that current China new Grassroots plants.
Also – the only reason that we are still at only $3/gal on fuel is that we just shut down half of older less complex refineries and ramped up larger more complex ones so that we only loss ~13% total capacity. BUT rub is that that spare capaicty is what let us meet summer gas and winter diesel demand that is ~60% demand during 4 month periods and so
we had start importing 20% peak demands from foreigners – otherwise we would be at $7+/gal…. We see all ppt that tout US efficiency & production levels at same as they were with 2X the number refineries but ……. utilization has be at 93%+ capacity instead past 87% and all the charts are on annual basis not peak peak comparison.
Even if we only focus on fuel cost element – just think how many products have between 20-30% final cost tied up in multi-mode transportation cost get from producer to end consumer. Petcoke iand coal are far worse due low value – its somewhere in 60% range although most show only 30-40% its just the ship to ship moves & dont count rail/truk/barge move plant to port supply side nor port to consumer on delivery side – not document/demurage/loss cost averages…..,
KISS approach for complex mechanism like manufacturing usually mean media economic evaluator doesnt understand the market or connected economics.
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