August 25, 2012:

ELK POINT, S.D. | Hyperion Refining wants to extend land purchase options on the Union County farmland where it plans to build an oil refinery and power plant until a court fight over the controversial project ends. The move casts doubt on whether Hyperion will meet a state-imposed deadline to begin construction on the $10 billion project by next March. Hyperion's current three-year contract with owners of more than 5,000 acres in Union County runs through Aug. 31, 2013. In a recent letter to landowners, the Dallas, Texas-based company asked for a longer extension that would tie the purchase of the land to the "conclusion of legal challenges to Hyperion's permits." Hyperion refused the Journal's request to release a copy of the letter or terms of its latest offer. "The landowners have been among our strongest partners in this project, and we're exploring ways that together, we can find the best way to handle our land options going forward and to collectively work through the seemingly endless array of hurdles raised by the Sierra Club," Hyperion vice president Preston Phillips said in a statement Friday.

The Sierra Club and two local grassroots groups, Save Union County and Citizens Against Oil Pollution, have fought on several fronts to block the project, which they claim would pollute the environment and destroy the rural county's tranquil way of life. In March, the three opposition groups appealed a lower court's ruling that upheld a state environmental panel's decision to grant Hyperion an air quality permit. The South Dakota Supreme Court is scheduled to hear oral arguments on the appeal on Oct. 3 in Sioux Falls. Hyperion spokesman Eric Williams said the company expects the Sierra Club to turn to additional legal avenues to "run out the clock," and let the options expire. Hyperion said its "innovative" offer to the landowners is intended to counter that strategy. Ed Cable, a spokesman for the three opposition groups, did not rule out more legal challenges. "We and every other group have every legal right to exercise whatever actions we think are appropriate under the current law," Cable said Friday.

Williams insisted that Hyperion has not given up on beating the March 2013 construction deadline the Board of Minerals set as a condition for approving the amended air permit. The opposition groups argue the permit is flawed because pollution-control technology is not sufficient to comply with federal environmental laws. They also maintain the state's environmental study should have been more thorough, and Hyperion should have had to restart the application process because it missed the original February 2011 construction deadline. Hyperion filed a more limited appeal, questioning whether a prescribed limit on carbon monoxide emissions from the refinery's process heaters is technically practical.

In July, Hyperion petitioned the Supreme Court to hold the appeal as early as possible in the court's fall term, which began this month. The company argued the ongoing uncertainty surrounding the permit was making it difficult to secure funding for the project. The proposed Hyperion Energy Center would be built just north of Elk Point on a 3,292-acre site that Union County voters rezoned in a emotionally charged referendum in 2008. The refinery would process 400,000 barrels per day of heavy oil sands crude from Alberta, Canada, into gasoline, diesel and jet fuel. The project, which would be one of the largest capital expenditures in U.S. history, would take an estimated four years to complete. Hyperion estimates it would create an average of 4,500 construction jobs per year. When up and running, the energy center would employ about 1,800.

By siouxcityjournal.com