The future of the Hyperion oil refinery proposed for Southeastern South Dakota is now up in the air. The Texas based company did not extend its option to buy or acquire land in Union County on the site of the proposed refinery.
Those following the issue say the refinery may now end up somewhere else if it’s built at all. Opponents to the oil refinery are pleased, but those in favor of the economic development the project promised are disappointed. SDPB’s Charles Michael Ray found that the issue tore many residents in Union County apart – now it seems both sides are looking to move forward.
In June of 2007 it was known simply as the the Gorilla Project. Now it’s referred to as Hyperion. The proposed project is to build an oil refinery in far Southeast South Dakota. State officials celebrated with company executives calling the $10-billion proposed project a new economic boom for South Dakota. Here’s Hyperion Executive Corky Frank addressing the Union County Commission during a zoning hearing back in December of 2007.
“It would be a showplace for South Dakota for Union Country a boom to the economies of all the surrounding locals. It would be a place that people would want to visit and we think that South Dakota would be a very desirable place to locate this facility,” says Frank.
Fast forward about five years and it seems refinery plans for Union County are all but stopped. Last month the company did not extend its option to buy or acquire the land set aside for the proposed site. No land means no refinery at least at the location in Union County. For many locals who were banking on the economic development potential this news is disappointing--but maybe not all that surprising.
“When you look at how the market conditions were changing I think you could kind of see this was coming down the line,” says Steve Howe the Executive Director of the Vermillion Area Chamber and Development Company.
Steve Howe is the Executive Director of the Vermillion Area Chamber and Development Company. Howe noticed an article in the Canadian press a few months back – he even tweeted about it – The article pointed to less demand for Canadian tar sands oil. Canadian crude is the main product Hyperion planned to refine. So, what’s causing the drop in demand for tar sands oil? The huge boom in the oil fields of North Dakota and other new reserves in the U.S. make for cheaper oil right here on American soil. And less demand for Canadian crude means less profit in refining that oil here in South Dakota. Here again is Steve Howe.
“I just think that during this really long delay period that we’ve had over the last four or five years the economics have changed the market has changed and it just at this point doesn’t look to be a feasible option for them” says Howe
Howe speculates that Hyperion might be pausing to reevaluate what type of refinery it wants to build and where. Company officials have not commented on tape. But in an e-mail a company spokesperson says Hyperion is considering its various options and opportunities. And that the company is continuing to dialogue with landowners in Union County. While those in favor of the project may hold on to hope, Union County opponents say they’re pleased that the Hyperion oil refinery isn’t likely to locate in their backyard. Ed Cable is a spokesperson for three groups that organized against the proposal. Cable is critical of what he calls a lack of transparency throughout the process.
“The contention that Hyperion made that they’re a green company, it would be a green facility, they, through the Governor of South Dakota claimed there would be no pollution beyond the fence line. They wanted to be a transparent company, yet for those who knew what questions to ask – they were just the opposite,” says Cable.
Cable contends the company opposed an Environmental Impact Statement prior to permitting. He says the lack of transparency even added to further divisions in Union County. Cable says the Hyperion proposal tore the county apart, even at times pitting longtime friends against one another.
“So much damage has already occurred to the community and to the relationship between neighbors and even within churches and the cities in Union Country so it’s not a good situation but it’s better than the alternative of the project proceeding,” says Cable.
Those who support the Hyperion project also hope past divisions can be healed. Steve Howe with the Vermillion Chamber calls the news of Hyperion’s potential pullout bittersweet. Howe wanted to see an economic boom around this big project, at the same time he says having a major oil refinery loom overhead held up a lot of other potential projects and even tied up land values in the area.
“If it is done it’s a relief to have it done. Yes it would have been great to have it and have these economic opportunities that came with it but at the end of the day we’re happy to be able to kind of move on,” says Howe.
Hyperion officials haven’t officially called the project dead in South Dakota – they are still pursuing a state Supreme Court case over an air quality permit issued for the very land they no longer have options to acquire. Howe says regardless he hopes Union County can heal its internal divisions and start moving forward with more communication. He says it’s important for local residents to find common ground so they can figure out what type of future economic development projects are appropriate.
The State Supreme Court hears oral arguments Wednesday, October 3 regarding the air quality permit for the proposed refinery. SDPB's Dakota Midday provides the latest update from the proceedings held in Sioux Falls.