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SD Supreme Court upholds refinery permit

Published on NewsOK Modified: January 24, 2013 at 5:21 pm •  Published: January 24, 2013

SIOUX FALLS, S.D. (AP) — The South Dakota Supreme Court on Thursday upheld the approval of an air quality permit that would allow a Texas company to begin constructing a proposed $10 billion oil refinery.

Opponents sued the Board of Minerals and Environment, saying the board erred when it approved the Hyperion Energy Center permit because its study did not include a full-scale environmental impact statement.

Attorneys for Dallas-based Hyperion and the board contend that an environmental impact statement was not required and that board members took into account all relevant environmental issues.

"Although an EIS was not prepared in the air quality permitting portion of this regulatory proceeding, the record indicates that other EIS concerns will be addressed in other regulatory proceedings that are necessary to construct and operate the proposed facility," Justice Steven Zinter wrote in the unanimous opinion.

Preston Phillips, Hyperion's vice president, said the permitting effort has been a long, methodical process and the company is extremely pleased by the ruling. He said the company will likely ask the board to extend the current March deadline that requires Hyperion to begin construction.

"Given the fact the Sierra Club's appeals have consumed more than 16 of the 18 months we have for a construction-start window, it is likely we will apply to the Board of Minerals and Environment for an extension to our permit." Phillips said in statement. "We're eager to push the project forward, but the constant delays by the Sierra Club make it difficult to bring people on board and begin construction."

Hyperion's proposed refinery would process 400,000 barrels of Canadian tar sands crude oil each day into low-sulfur gasoline, diesel, jet fuel and liquid petroleum gas. If constructed, the 3,300-acre tract of farmland north of Elk Point would become the first new U.S. site for an oil refinery since 1976.

The board originally issued an air quality permit in August 2009, and it was challenged by the Sierra Club and local groups Save Union County and Citizens Opposed to Oil Pollution.

Ed Cable, of Save Union County, said Thursday that he was disappointed but not surprised by the ruling. He said the company still faces many hurdles as it let its land-purchase options slip.

"All this is probably a moot issue since they no longer control any ground whatsoever, not even one acre" Cable said.

Hyperion had thousands of acres of options in Union County secured for the refinery, but the company failed to extend them on Sept. 30. Company officials said in October that they were still talking to landowners, and the statement released Thursday did not address the land options.

The high court also ruled that the state did not err by extending a construction deadline for the plant.

The original permit 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 board issued a revised permit in September that reflected updated national air quality standards and new pollution-control technology and gives Hyperion until March to start construction.

The Hyperion Energy Center would include a power plant that produces electricity for the refinery. It would convert a byproduct of the refinery process — solid petroleum coke — into gas that would be burned to produce electricity.

Hyperion contends that the refinery would be a clean, modern plant that would use the most advanced, commercially feasible emissions control technology.

Company officials have said that efforts to secure financing are progressing, but they have not provided details.

Cable said the groups haven't decided whether to appeal the state Supreme Court's ruling.

"We are reviewing all of our options at the moment, and there are several actions which we could take," he said.


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