Hyperion Can't Count, Lowballs Pollution by Half

I hear on SDPB and read on KELO this morning that Hyperion was a little off in its pollution estimates on its proposed Elk Point refinery when it applied for a South Dakota air quality permit. By half:

Hyperion Resources has informed the state that a proposed oil refinery in southeast South Dakota would release almost double the amount of greenhouse gases previously estimated.

Documents from the Department of Environment and Natural Resources show that previous estimates omitted a step in the refining process ["Proposed SD Refinery's Emissions Revised," AP via KELO, 2010.12.16].

Emissions revised?!?! I'd ask what you guys are smoking, but you'd probably miss that by half as well.

But I guess when you've never built, let alone run, an oil refinery before, it's easy to miss a step in the process, right? But golly gee, what steps would you omit when you actually start building the thing? What safety steps would you omit when you fire that sucker up and start belching pollution into our clean prairie air and fresh water supply?

Department of Environment and Natural Resources, tell me you aren't taking these Hyperion incompetents seriously any more. Please. Hyperion can't even report its own projected pollution correctly, let alone build and operate a safe and clean refinery. Throw their permit out.

Tar Sands Bad for South Dakota: Three Neighbors' Stories

Hat tip to Great Plains Tar Sands Pipelines!

The Sierra Club documents how the push for toxic Canadian tar sands oil threatens the health and welfare of South Dakotans. The environmental organization profiles three South Dakotans who have fought Big Oil: Kent Moeckley of Britton and Carolyn Harkness and Ed Cable of Union County.

Moeckly was a notable opponent of TransCanada's Keystone I pipeline, which is now buried under his farmland in Marshall County. When TransCanada announced the pipeline route, Moeckly and his neighbors asked TransCanada to consider alternative routes. He says an oil leak in his neighborhood's sandy, permeable soil could threaten the aquifer that feeds the local rural water system, an objection much like that curently raised by Nebraskans worried that Keystone XL could damage the Sand Hills and the massive Ogallala aquifer. TransCanada paid no attention:

Moeckly says pipeline consultants didn't even survey his land before they reported it as "low consequence" status, which allowed TransCanada to build the Keystone I through the aquifer in 2009, using thinner pipe and higher pressure than any other pipeline before it. When farmers in the area requested thicker pipe to reduce the risk of water contamination, their concerns went unheeded.

"TransCanada absolutely ignored us. They plowed on through," Moeckly says ["Toxic Tar Sands: South Dakota," Sierra Club, Nov. 2010].

TransCanada finished the pipeline last year. They left debris and dirt piles on Moeckly's land that have trapped water and left 15 acres unusable. (Where are the conservative property rights hawks speaking up for Moeckly's rights under the takings clause?)

Harkness and Cable are trying to save Union County from even worse disruption at the hands of the still-pending Hyperion refinery. This tar sands refinery would tear up thousands of acres of prime farm land and threaten the aquifer, air quality, and even the simple view of the stars at night.

Carolyn Harkness would find her farm home 300 feet from the refinery. She doesn't want to give up land that is everything to her family, her home, business, and retirement. She also sees a higher obligation to keep the refinery from tearing up Union County:

"This land belongs to God and it is our responsibility to save it for future generations. It has treated us well," she says. "We need to return the favor" [Sierra Club, Nov 2010]

Ed Cable lives three miles from the proposed refinery site and share's his neighbors' concerns about pollution that owuld ruin one of the cleanest places in the country. Cable has led the legal fight to block construction of the refinery. His group, Save Union County, has played a key role in pushing South Dakota's regulators to do something like due diligence in, if not stopping the refinery, at least making sure the Texas dreamers behind it get their enviromental ducks in a row.

Oops—did I say ducks in a tar sands story?

Moeckly, Harkness, and Cable understand that increasing our dependence on dirty foreign oil is not good for our way of life. As we see from the Keystone I pipeline, the tar sands are already damaging our fair state. We should say no to any more development of this unsustainable resource.

Iowa Gov. Candidates Debate Hyperion and Jobs

I just found this really good article from Matt Vasilogambros in the Iowa Independent about the proposed Hyperion refinery in Elk Point. Apparently the thus-far pipe-dream-only project is sparking more disagreement between Iowa's gubernatorial candidates than between South Dakota's.

On our side of the Big Sioux River, both Republican Dennis Daugaard and Democrat Scott Heidepriem have said they support the refinery (Scott! Come on!) but have doubts about whether it will come to fruition. But in Iowa, Governor Chet Culver and challenger (and former governor) Terry Branstad appear to stake out opposing ground on the refinery. Branstad says environmental concerns expressed by the Sierra Club and Iowa's former Department of Natural Resources chief Richard Leopold are just bunk that stand in the way of economic development. Governor Culver's team responds that jobs are priority #1 but that the state still needs to protect the environment. Culver likens Branstad's position on Hyperion to the same pro-corporate thinking that led Branstad to open his state to huge polluting hog operations and the unhealthy DeCoster egg operations. (Worth noting:Branstad himself calls Jack DeCoster a rogue businessman.)

Vasilogambros also notes that Hyperion assures Iowans that they will get lots of the Hyperion jobs. (Does Hyperion provide a lesson for South Dakotans complaining about the Larchwood casino?) But Jim Redmond of the Northwest Iowa Sierra Club says that both Iowa and South Dakota will probably get the same bum deal from Hyperion that South Dakota got from TransCanada: Hyperion will import a lot of the labor it needs from other states.

Blog Poll: Bartling Outpolls Barnett... and a Dems' Quandary

The latest Madville Times poll asked, "Who gets your vote for South Dakota auditor?" You, dear readers, gave Democrat Julie Bartling the nod:

Julie Bartling	74 (56%)
Steve Barnett	57 (44%)

Votes: 131

Not bad, although given the standard Madville Times bias and barn-sized margin of error, Bartling should keep shaking hands and kissing babies...

...which brings me to my quandary. Julie Bartling is notorious among South Dakota Dems for her work on the 2005 abortion task force and her primary sponsorship of the 2006 abortion ban. Bartling has since disavowed her 2006 legislation (which failed to pass muster with voters on referral that year). But some Dems don't like Bartling's politics on reproductive rights and may thus withhold their vote from her for state auditor.

When I first heard this Dem complaint, I thought, What's the fuss? She'll have a lot less opportunity to advance the Hunt/Unruh Handmaid's Tale agenda from the auditor's office than from the Senate chamber. Bartling will be a good state auditor. Her quals—18 years as Gregory County auditor—beat the pants off the other guy. Besides, we need every Dem we can get in state office so we can build a stronger bench of candidates for future races.

Yet I'm still considering my own protest vote against a down-ticket Dem over a similar hot-button political disagreement. Doyle Karpen wants to replace Dusty Johnson on the Public Utilities Commission. Doyle Karpen is a good Democrat with lots of good public service experience. But Doyle Karpen also thinks the Hyperion refinery would be "fantastic" for South Dakota and was instrumental as Union County Commissioner in opening the door for those Texas oil men to tear up a lot of good farmland and keep us addicted to fossil fuels. And a Public Utilities Commissioner has a little more say over other big dirty oil projects than an auditor does over abortion legislation.

But if I tell Dems to drop their political grudges and vote for Bartling, can they not bounce the same argument back to tell me to vote for Karpen?

I have some thinking to do over the next four weeks. Your thoughts, dear readers, are welcome in that process.

Hyperion Pipe Dreams Bad for South Dakota

Doug Maurstad hits the editorial page of that Sioux Falls paper to remind us that Hyperion's four-year land options for its proposed refinery in Union County end August 31. Four years, and no action. Not one job, not one acre cleared, and no action planned until 2012. Maurstad says Hyperion has dropped the land it's interested in from 27,000 acres to 4,000 acres.

If Hyperion does get its act together and start building, it will be bad for South Dakota. Remember, Hyperion is tied to the Keystone pipelines and the dirty, expensive tar sands oil TransCanada wants to ship. Processing tar sands oil requires four times as much water as conventional oil refining... and that water will come from our prairie aquifers that scientists say are already stressed by farming and development. A tar sands refinery might provide jobs in Union County, but it will severly limit the capacity of surrounding communities to expand water supply to new residents and businesses or even continue to meet the needs of current users. Imagine that: Hyperion as zero-sum development.

Richard Leopold, chief of Iowa's Department of Natural Resources, points out another way Hyperion's development could limit economic opportunities for everyone else in the neighborhood. Air quality standards allow only so much pollution in each area. Hyperion could belch so much filth that it would fill the emissions quota for southeast South Dakota and northwest Iowa. No one else would be able to build a factory in the neighborhood. Elk Point could become a company town: the only place to work would be Hyperion. Wedding your town's economic development to one company that monopolizes the labor pool and crowds out all competing industries is a really bad idea.

I've said before that the chances of the ever-delayed Hyperion refinery becoming reality are slim. The business case isn't there. But we can't let our guard down. We have lots of other options for real green energy development that will improve our economy and our environment rather than limit our options. Let's tell Hyperion (and TransCanada!) to take their pipe dreams elsewhere.

Karpen Lobbies Dems for PUC Nod; Where's Zaiko?

Doyle Karpen hits my mailbox, and the mailboxes of other Democratic convention delegates, to ask for our vote to make him the Democratic nominee to challenge Dusty Johnson for the Public Utilities Commission.

I've made clear that I have trouble getting excited about a Democrat (or anyone else) who calls the proposed Hyperion refinery "fantastic" and a "boon." So you can expect my read of Karpen's campaign literature to be less than favorable.

As I read his letter, the first thing I learn is the length of his marriage and the names of his wife, kids, and grandkids. Yes, yes, we all have wonderful families. Yes, I'm proud of my daughter, too, but that doesn't render my political judgment any more valid.

After ascribing his political activities to the inspiration of "the spirit of the pioneers who made our country great," Karpen gets down to the real résumé, citing his experience on township board, school board, and county commission. Interestingly, in discussing his tenure as a Union County Commissioner, he does not mention the words "Hyperion" or "refinery":

Being Chairman of the Union County Commissioners fostered in me the importance of allowing everyone the right to be heard while ensuring that the wishes of the majority are sustained. In the words of Thomas Jefferson, "The most sacred of the duties of a government is to do equal and impartial justice to all citizens" [Doyle Karpen, campaign letter to Democratic convention delegates, June 2010].

Well, at least Karpen is good at spin.

Karpen does mention Hyperion on his online résumé. Karpen says he "focused on laws and ordinances rather than emotions"... since, of course, if you oppose an unsustainable, polluting, economically unviable oil refinery, you're just being emotional.

I'm starting to worry that when Karpen talks about bringing "the pioneer spirit... back to the people of South Dakota," he's really talking code for letting big oil corporations pioneer their projects roughshod right over us natives (ah, just like the 1800s).

But where's our alternative? Challenger John Zaiko hasn't sent out similar mail. He did click "attending" on the Democratic convention Facebook page, so I'm hoping we can have a conversation in Sioux Falls Saturday... and maybe at least one interesting vote at the convention!

Hyperion Delays Construction in Union County

Hyperion's proposed oil refinery in Union County looks more and more like a pipe dream than a solid business plan. Hyperion asserts that they could start building right now, but they have asked (and a judge has agreed) to have the state Board of Minerals and Environment reopen its air permit. Hyperion uproariously claims they have asked for this delay to ensure that their refinery complies with all environmental regulations.

The more likely explanation: Hyperion still can't get the capital it needs to build the Union County refinery. The original air permit set an 18-month time frame for construction, with the latest possible start date in February 2011. By reopening the permit, Hyperion can get the state to offer an 18-month extension. Clever.

Governor Rounds is trying to assure his wealthy golf buddies that the refinery will move forward, but he continues to ignore to obvious: the business case for Hyperion's oil refinery doesn't exist. It will go the way of Big Stone II, brought down not by environmentalists (though we're happy to help) but by sheer economics.

Johnson vs. Karpen for PUC: Who Will Stand Up to Big Oil?

We have a Public Utilities Commission race! We knew incumbent commissioner Dusty Johnson was running, but yesterday the eager Republican sent out a pleasant official announcement (quoted below).

Just announced at last weekend's McGovern Day in Rapid City: a Democrat challenger! Union County Commission chairman Doyle Karpen has thrown his hat in the ring.

Back that up: Union County Commission? As in, the fellas who have been voting consistently along the Hyperion corporate line?

Yeah. Those guys. Karpen has said the Hyperion refinery could be "fantastic"* for the state. For Karpen's public comments on Hyperion are all about the boost in tax revenue and jobs. Karpen joined the unanimous commission vote approving the Hyperion rezoning application and ordinance, under circumstances that one lawyer contended were improper, given the significant amendments that occurred between first and second reading. He was involved in the county's effort to use signage ordinances to stifle free speech during the 2008 county election concerning the Hyperion permit. On his own campaign website, Karpen maintains a conspicuously careful neutrality on the proposed refinery. He also doesn't appear to have much of a sense of humor... at least not when the joke is on Hyperion.

And we Democrats are supposed to get excited about a PUC candidate who's done the bidding of Big Oil? Hmmm... doesn't look like we'll be getting anyone to challenge Johnson's votes for the TransCanada pipelines any time soon.

Yes, there are plenty of other issues for our PUC candidates to debate. But Karpen's record on Hyperion dampens my passion for taking the fight to Dusty.

Karpen and Johnson are both on Facebook. Current fan count: advantage Johnson, 659 to 31.

=======Johnson Press Release=======

Mitchell, SD – Dustin “Dusty” Johnson, the chairman of the state Public Utilities Commission, has officially announced he will seek a second six-year term on the PUC. Johnson says he has successfully kept the promises he made to voters during his first term.

Johnson was elected to his first term in 2004 and has served as the PUC’s chairman in 2007, 2009, and 2010. In his six years on the PUC he has become a recognized leader in working to develop renewable energy resources, expand internet access and cell phone reception, keep utility rates low, and protect consumers.

“Politicians are good at making promises; they aren’t always good at keeping them. Over the last six years, I’ve made good on the commitments I made to voters in 2004. We’ve seen a nearly 1,000 percent increase in wind power, hundreds of new cell phone towers, and thousands of South Dakotans have gained access to high-speed Internet for the first time,” Johnson said. “A common-sense regulatory environment helped make that progress a reality.”

Johnson’s website (www.JohnsonforPUC.com) lists seven areas he promises to focus on in the next six years, including green energy development, energy efficiency, and consumer protection. He believes that with hard work, South Dakota will be able to take advantage of significant opportunities over the next few years.

“From wind power to ethanol to a strong rural broadband network, we have the pieces in place to continue to create jobs and improve the lives of consumers,” Johnson said. “The PUC has helped to lay that groundwork and I am excited to keep working on these issues that impact the lives of families and businesses in South Dakota every day.”

Johnson has been a strong voice for South Dakota consumers. He was the only utilities commissioner in the country to testify before a U.S. Senate committee on how the cap-and-trade legislation would impact consumers. He has served as the lead commissioner on the PUC’s “South Dakota Energy Smart,” an effort promoting energy efficiency, as well as on the PUC’s “Small Renewable Energy Initiative,” designed to encourage small wind and solar projects. Additionally, Johnson serves on the board of directors for the National Association of Regulatory Utility Commissioners.

The political parties will select their nominees for the PUC at state party conventions in June. Voters will then elect one person to the PUC in the general election this November. The Public Utilities Commission has three members elected statewide to staggered six-year terms.

Johnson lives in Pierre and Mitchell. He is married with two children and is involved with numerous state and local community service projects. Those interested in more information can visit www.JohnsonforPUC.com or the campaign Facebook page facebook.com/dustyforsd.

=======Karpen Press Release=======

A proud native South Dakotan, Doyle is running for PUC because he believes it's time to refocus the office on its intended purpose - that of consumer advocacy. The commission was established to protect the South Dakota public and to require utility companies to treat consumers with fairness in implementation of procedures and rates. Doyle wants South Dakotans to receive high quality, safe and reliable public services at fair and affordable rates.

Doyle was raised on a farm in rural Jefferson home by his father, Merlyn, cattleman, farmer, well driller and grain dealer, and his mother, Arlene, teacher and tutor. He studied at the University of South Dakota in Vermillion, earning a Bachelor's degree in Math. Doyle married Deborah Iversen of Gettysburg, SD in 1977. Doyle and Deb reside in Jefferson, SD and have three daughters.

Upon graduation, he worked with his father in the well drilling business and Karpen Grain Co. Karpen Grain Co. is a small agri-business company which serves farmers in Southeast South Dakota, Iowa and Nebraska. Doyle facilitates grain transactions between farmers and the grain terminals and provides transportation of the grain from farm to market.

In addition to a full time job as a self employed small businessman, he’s built a secondary career as public servant serving Union County for nearly two decades. From 1979-1984, Doyle served as the Civil Bend Township as Clerk - a job which required him to conduct Township elections, manage township revenue and expenditures and prepare the annual budget.

He served on the Elk Point Jefferson School board for 9 years (from 1995 to 2004),four of which he served as President. Doyle is in his second term serving on the Union County Board of Commissioners. Union County is in the Southeastern-most county which borders Iowa and Nebraska. He has held the position of Chairman since 2007.

*Update 2010.06.25: KSFY has nuked the link. The original story in which Karpen referred to the Hyperion refinery as fantastic was called "Hyperion Gets Approval," KSFY.com, June 3, 2010. The pertinent text read as follows (as retrieved from Google Cache):

Voters said 'Yes" by a margin of more than a thousand votes. People on all sides of this divisive issue say it was a tough decision. Union County Commission Chairman, Doyle Karpen, says, "environmentally, people have concerns, and at the same time economically, if everything works out the way they say it will, it will be fantastic for the area, the county, the region, the whole state.

Refineries Bring Economic Boom? Well, You Got Boom Right...

South Dakota GOP gubernatorial candidate Dennis Daugaard vows in his economic plan to "Make the Hyperion refinery a reality." He says the proposed Union County oil refinery is an "incredible opportunity for South Dakota," promising jobs and dollars, and he vows as governor to "ensure that environmental extremists and an activist EPA do not prevent this important project from becoming a reality."

O.K., how about safety concerns? Union County Commission candidate Doug Maurstad directs our attention to a new study finding American refineries are exceptionally bad at safety. American refineries apparently lose four times as much money from deadly accidents as overseas refineries. (Is our American know-how limited to making things go boom?)

An explosion at the Tesoro refinery in Anacortes, Washington, Friday killed five workers and critically injured two more. The Tesoro facility had a history of previous safety violations that government regulators arguably did not do enough to punish. U.S. Chemical Safety Board chairman John Bresland says, "The CSB has eighteen ongoing investigations. Of those, seven of these accidents occurred at refineries across the country. This is a significant and disturbing trend that the refining industry needs to address immediately.” CSB is currently investigating accidents at facilities owned by, among others, CITGO, Goodyear, and Exxon.

I'm not sure which is riskier: doing business with current industry players, or trusting Hyperion, a company with no refinery experience at all, to build a time bomb in Union County.

With such a rottten safety record, oil refineries clearly require stricter oversight and regulation. But in Dennis Daugaard's Republican world, efforts to strenghen OSHA and the Chemical Safety Board and protect workers and neighbors from refinery explosions are just "federal efforts to over-regulate and stifle economic growth... erode state autonomy and hurt businesses and families."

Blogger Joins Political Fray: Maurstad for Union County Commission

We have our first notable blogger sighting on a 2010 South Dakota ballot. Doug Maurstad, known online as "Old Cranky," has filed his petitions to run for the Union County Commission. The Alcester Republican tells the Sioux City Journal the current commission is "not open and accessible."

Maurstad has also been a vocal opponent of the proposed Hyperion refinery. He says if, if, IF the refinery is built, he wants to impose some real oversight and control. "Our best interests are not part of [Hyperion's] concerns," Maurstad tells SCJ.

Maurstad has been blogging since May 2008 about the shenanigans between Hyperion and the Union County Commission. He has not hesitated to call Hyperion "sneaky bastards" or to celebrate a small victory for the little guy when the Clay Rural Water unanimously rejected Hyperion's request to hook up to their system.

But watch out, Doug: since the Supreme Court ruled in January that corporations can spend direectly on political campaigns, will we see Hyperion buying fancy billboards and airtime for primary opponent and incumbent Republican Milton Ustad from Beresford?

Hyperion's Huddleston Faces Another Lawsuit... from His Mother

Mr. Epp documents another pending lawsuit against Hyperion CEO Albert Huddleston. Mr. Huddleston is being sued by his mother, Erika Huddleston, over alleged mismanagement of a family trust fund. Albert's dad Gordon died in 1981. Gordon set aside a trust fund to provide Erika income for the remainder of her life. After her death, the kids get to divvy up the remaining money. Albert was named co-trustee of the fund with Erika. Erika has suffered a stroke and been in and out of assisted-living situations. Her lawsuit (or her lawyer's lawsuit; an appended motion indicates she may now be incapacitated) alleges Albert has withheld payments with the intent of enriching himself.

Mom's lawsuit comes in addition to a suit by the Hunt family over Huddleston's management of another trust fund.

I'll leave it to the courts to decide who the skunks are in these cases. But this latest lawsuit does suggest the Huddlestons of Dallas just can't play nicely with their money. If Hyperion ever does get around to building an oil refinery or a landfill in South Dakota, the profits might all go toward paying CEO Albert's legal bills.

Clay Rural Water Says No to Hyperion

I went to bed last night with an extra spring in my snore: Rebecca Terk of Flying Tomato Farms had just broken the news that Clay Rural Water System voted unanimously to reject Hyperion's request that CRWS supply up to 12 million gallons of water per day to Hyperion's proposed oil refinery near Elk Point. Supplying Hyperion would have required CRWS to tentuple its current 1.2 million gallon/day capacity. The dealbreaker, however, was Hyperion's Wimpy request that CRWS pay for the new water infrastructure today, with the promise that Hyperion would pay them back several Tuesdays from now.

Clay Rural Water's vote is an encouraging sign that not all South Dakotans can be driven to crazy, unsustainable actions by the wild promises of Big Oil. But it does not leave Hyperion high and dry. CRWS's nay may actually be just what Hyperion wanted. Hyperion didn't bother to send a rep to last night's meeting. The company actually provided CRWS with a model "Form of Intent Not to Serve"—when a corporation pays its lawyers to take time to write up a legal document for you, beware.

The denial statement, adopted by the CRWS board, says CRWS consents to Hyperion seeking water from other suppliers. This negates the possibility that CRWS could use federal regs to stop other suppliers from seeking Hyperion's water business. It could well be that Hyperion knew all along that CRWS lacked the resources to become a heavy industrial water supplier and just wanted to play a little CYA before it went seeking a biger aquifer-draining supplier.

But for now, Clay Rural Water customers can be happy that they won't experience a sudden drop in pressure in the shower if the Hyperion refinery ever fires up.

Clay Rural Water Considers Hyperion Water Request Tonight

Thirsty? Hyperion is. They are asking Clay Rural Water Systems to agree to provide 10–12 million gallons of water per day to their proposed oil refinery near Elk Point.

The intrepid Rebecca Terk of Flying Tomato Farms reminds us that Clay Rural Water meets tonight, Thursday, Jan. 28, at 7:30 p.m. She gives directions (30376 SD Hwy 19, 11 miles north of Vermillion) and offers to arrange rides to this really important public meeting.

Why is this meeting important? Terk notes that CRWS has six reservoirs with a total capacity of 1.04 million gallons. Hyperion could drain those reservoirs before morning coffee and still be thirsty for more.

So if you're thirsty... or if you just want to keep your taps running in Clay and Union County, you might want to drop by the Clay Rural Water meeting tonight and ask the directors how they plan to water a big slurping oil refinery and their current customers.

SD Media on Hyperion: Corporate Line Always Comes First

Mr. Epp reacts the same way I did to that Sioux Falls paper's headlining of some pro-Hyperion propaganda over the weekend. Hoping that most readers pay attention to only the first couple paragraphs, the mainstream media puts the corporate line at the top and shoves below the fold the copious evidence that Hyperion doesn't have a realistic chance of building its proposed Elk Point refinery.

But even below the fold, it's nice that the paid South Dakota press is catching up with what the South Dakota blogosphere has been pointing out for over a year: market fundamentals say Hyperion won't happen.

----------------------------
Update 2010.01.05 10:06 CST: Cranky old Doug Maurstad picks up the theme with a good rundown of all the factors standing between Hyperion and a chance in heck of making their plans reality.

Hyperion Won't Happen, Now or After Recession

AP offers yet another story about American oil refineries scaling back and closing. Does anyone still believe Hyperion's bluff that they're going to build an expensive new refinery here in South Dakota?

But wait: maybe it's just the recession causing a temporary dip in petro-demand. Once President Obama fixes the economy, we'll need more gasoline than ever, right?

Just a few years ago, gas was $4 a gallon and there were worries the nation did not have enough refining capacity. But the recession, coupled with more emphasis on fuel efficiency, has driven down demand as refineries were built and were expanded in China, India and the Middle East.

[Caris & Co. analyst Anne] Kohler said gasoline demand isn't likely to return to its 2007 peak and even if the economy turns around, refineries that are shuttered will probably stay closed, partly because it's so hard to reopen one once it's closed entirely [Geoff Mulvihill, "Refinery Struggles Bruise NJ Communities," AP via ABCNews.com, 2009.12.25].

No return to the 2007 peak. Sounds to me like the experts in the industry are saying oil refining is a dead-end investment.

Now those refineries have been offering great wages—$33 to $37 an hour, according to Mulvihill's report. I'd love to see Hyperion bring wages like that to Elk Point, but the oil industry sees wages like that as liabilities. Hyperion might bring a refinery here to take advantage of relatively cheaper labor—their own press promises average wages of $20 to $30 an hour, and you should always round company propaganda down. But the industry in general sees they can get even cheaper labor overseas and then ship the final product back to America.

Hm... can't export wind power jobs, can you?

Even the Sioux City Journal blog acknowledges that Hyperion would have to prove itself an exception to the market rules to make the Elk Point refinery a reality. I know folks in Elk Point need jobs, but Union County would do better to invest in achievable local industry rather than the pipe dreams of a company with no proven record and all the market fundamentals stacked against it.

USD Student Project: Hyperion Refinery Not Sustainable

...but USD Math Dept. Cringes at Bad Pollution Math

Old Cranky brings to our attention a Vermillion Plain Talk report about a new assessment of the proposed Hyperion oil refinery in Union County. The assessors: a team of undergrads from the University of South Dakota. The assessment: on four out of five criteria, a big oil refinery near Elk Point is not a sustainable project.

The students are part of IDEA 410, a capstone course in USD's Interdisciplinary Education and Action program. Various sections of the course tackle various issues. This section—titled "Wall Street & Ethics: Do Social Justice, Community, and Sustainability Cost Too Much?"— is apparently taught by USD School of Business Professor Gregory M. Huckabee. And if he can get his kids to do research like this, then I do indeed heart Huckabee!

The students analyzed the Hyperion refinery proposal through a framework of criteria presented in Jared Diamond's Collapse: How Societies Choose to Fail or Succeed. Writes VPT's David Lias:

Diamond believes that societies can be determined to be sustainable, or not, by applying five criteria to specific circumstances. These criteria are: environmental damage, climate change, loss of friendly contacts, rise of hostile contacts, and political, economic, social and cultural setting.

The students told aldermen that only the final criteria – political, economic, social and cultural setting – could be deemed sustainable [David Lias, "USD Students: Hyperion Is Not Sustainable," Vermillion Plain Talk, 2009.12.11].

The students identify various problems like the 9 to 12 million gallons of water the refinery would slurp out of everyone's milkshake daily and the 19.6 million tons of pollutants the refinery would belch out in return each year.

The USD students noted in their presentation that some individuals, including Gov. Mike Rounds, argue the emissions from this plant will only be 32 percent of what is currently emitted from Sioux Falls [Lias, 2009.12.11].

The Governor said that? Really?! Hang on, kids: five points off for botching the numbers. According to the South Dakota Department of Environment and Natural Resources (which, interestingly, actually uses exclamation points to explain itself in this Q&A sheet on Hyperion), the proposed refinery would emit a mass of air pollutants equal to 7% of the pollution emitted by everyone in Minnehaha County.

While the kids sign up for spreadsheet lessons, I still would like to ask: since when is it o.k. for one person (and remember, under our twisted laws, a corporation like Hyperion is a "person") to emit as much air pollution as nearly 13,000 people?

Now I think I hear the indigestion burbling up from my conservative friends: bad enough the kids can't run Excel, but they take classes at a public university to promote their liberal tree-hugging (well, cornfield-hugging) agenda? When my conservative friends read the theme of the interdisciplinary program—"Liberal Learning: Students in a Global Community"—they'll lob all sorts of New World Order critiques.

I do find it interesting that these students giving Hyperion a studious thumbs-down are the business school kids. (The hippies at USD are all in theater, right? ;-) ) They didn't just look at the immediate short-term profit; they took the long view, all the way to the boreal forest that has to be torn down and the ducks that get killed to get at the tar sands oil Hyperion would process, the dirtiest oil in the world. Even USD B-school students can recognize that oil like that isn't worth the trouble.

Less Gasoline, Less Oil Flowing, More Demand for Fuel Efficiency: Who Needs Hyperion?

Evidence continues to pile up that there is no viable business case for the proposed Hyperion oil refinery near Elk Point. My friends at the SD Tar Sands Pipeline blog note that demand for gasoline is dropping. SDTSP points to a Wall Street Journal report that Valero is closing a Delaware gasoline refinery. Experts in that article see gasoline demand decreasing or remaining flat as biofuels take more of the market and as motorists look for more fuel-efficient vehicles.

A new Department of Energy report says that last week, U.S. crude oil refineries operated at under 80% of capacity. The same report says our oil imports over the past month are down 13% from the same time last year. Domestic production is up, but there's still a net drop of 2.1% in cumulative oil input to refineries this year.

All this supports the case I've been making for the past year here (see also here and here and here): Hyperion's refinery proposal is more wishes and dreams than solid business case.

Investors Quit Big Stone II: Harbinger for Hyperion?

Could good news breed good news? Might the death of the proposed Big Stone II coal plant in northeast South Dakota signal the impending extinction of Hyperion's proposal to bring dinosaur power to the southeast corner of the state? Big Stone II failed because it couldn't convince investors to bet their money on a big unsustainable energy project. Backers of the Grant County coal plant were trying to buck a negative investment trend that has seen 100—now 101—coal plants defeated or abandoned since 2000 as high rollers like Warren Buffet realize stuffing their money in the coal-power mattress is not a wise move.

Now Hyperion has to convince these same cautious energy investors to sink their capital into a project that will use an even dirtier fuel source and cause even more environmental disruption in its construction and operation. Shell Oil says the tar sands oil Hyperion would refine is cleaner than coal... but Shell also made $351M in profit on its tar sands operations in quarter 2 this year. **[Update!] On the climate change score sheet, BSII would have pumped 4.5 million tons of CO₂ annually. Hyperion's complex would emit 19 million tons.** Oil refineries are also more likely to explode than coal plants (pace BP).

As Dean Spader points out in a Sunday letter to that Sioux Falls paper, the Hyperion refinery would take 6,000 acres of some of South Dakota's most productive farm land out of production. "No advanced civilization destroys and pollutes its source of food," says Spader. "Nor should any Christian nation ever deliberately annihilate rich cropland when 1 billion people are starving."

Far be it from me to appeal to the Christian sentiments of venture capitalists. The business case alone is enough to make them back away from refineries. Valero, the biggest refiner in America, is losing money on oil and switching off refineries. The only bright spot in its portfolio: all those ethanol refineries they bought from bankrupt Verasun.

Blame the recession, blame ACESA... heck, blame me and my fellow bike-riding propagandists. The cold hard facts of the market say investors are looking for smarter, cleaner, more sustainable places to put their money than fossil fuels.

Memo to Preston Phillips, Albert Huddleston, et al.: have you thought of installing wind turbines and solar panels on that land you've optioned? There's some decent Class 3 wind down around Elk Point, and we can get you just about as much solar potential as down in Dallas. Plus, you wouldn't be dependent on foreign oil!

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Update 09:17 CST: Of course, don't tack this blog post up on your bulletin board in Union County. Elected officials there might threaten to fine you for speaking out against the refinery.

Hey, Glenn Beck Club: Try Some Real Outrage... Over Hyperion and Gov. Rounds

My Google reader surprises me this afternoon by finally burping up a backlog of posts from Elk Point's Old Cranky, a South Dakotan with no good word to say about Hyperion or the Rounds Administration. In his latest post, he celebrates Hyperion's announcement that it is letting lapse half of the land options it holds in Union County. "6000 down and 6000 to go!"—I share Old Cranky's jubilation.

I also happily add his reasoning to the growing case that Hyperion will not build a refinery in Union County. One of his neighbors offers a very rational theory that buying up land options around Elk Point was just another ill-conceived business venture by Hyperion and its boss Al Huddleston. Hyperion can't build a refinery, but it gambles that maybe a real petro-player will buy the options from them to execute an actual project. The oil economy (and pipelines) go south, and Hyperion loses another bet. Brilliant!

More admirable is Old Cranky's genuine, concrete rage at the current South Dakota government that's been all hip-hip-hooray for this these pipe dreams. Unlike the Glenn Beck fan clubs that get their rage all tangled up in one entertainer's hyperbolic schtick and esoteric conspiracy theories, Old Cranky is ready to hold Governor Rounds and South Dakota's good old boys directly accountable for direct, demonstrable harm in our own backyards:

Governor Rounds... might have started this whole mess, but I’m here to tell you WE WILL FINISH IT! This isn’t over by a long shot, and when the last 6000 acres held hostage are released, then and only then will it start to be over. The worm is starting to turn and Hyperion is going to get bit right on their butt.

Never underestimate the power of the vote my friends. We will sweep them out of office and we will turn this government back to the people.

Somebody hand me a broom please.

I'll see you and your friends at the polls, Doug!

Up next: big essay and photo feature on TransCanada's Keystone pipeline, barreling through a family farm near you....

Oil News: Notes on Keystone, Refineries, and Oil Sands

I'm working on a big feature on the TransCanada Keystone pipeline, which is being welded and buried 27 miles west of my house right now, so let's prime the pump with some oil industry news:

Watch Your Step: The Jamestown Sun reports that horizontal drilling for the Keystone pipeline caused seven sinkholes in the Pembina Gorge. A Keystone pipeline spokesman says the holes have been filled.

Backwards Municipal Marketing: The city of Norfolk, Nebraska, has created a "pipeline partnership program": the 750-some pipeline workers temporarily based in Norfolk get discounts at local stores. The Norfolk program seems to have the same flaw as cell phone deals for new customers: giving a discount to someone while charging your regular customers full price makes those loyal customers—in this case, your permanent residents—feel like second-class citizens. I might suggest Madison could try doing something like the Norfolk program... but if a town has money to throw around, wouldn't it make more sense to give discounts to folks laid off from Gehl and others who actually need help paying the bills?

What Refinery? More evidence that folks banking on Hyperion to build a refinery near Elk Point are wishing on a falling star: Petroleum Economist reports that North American refiners are retreating from plans for expansion and new construction. Irving and BP axed a New Brunswick refinery project: "Based on their own 18-month evaluation of various forecasts for gasoline demand over the next 30 years, the two companies concluded that North American consumption has peaked for the foreseeable future" [emphasis mine].

Canadian Oil Sands Pollution: Two studies funded by the Alberta government find greenhouse gas emissions from Canadian oil sands production (that's where TransCanada's oil comes from) are similar to emissions from conventional oil production in some areas. The Pembina Institute points out that the studies compare Alberta's oil sands industry to places like Nigeria, where environmental regulations are abbysmally weak. Pembina says the Alberta studies still show that "producing and burning oil from the oil sands results in up to 45 per cent more greenhouse gas emissions relative to some sources of conventional crude oil."