Out In The Open

Out In The Open
Criticized for months by opponents for being too secretive, Hyperion Resources, Inc. filed a much-anticipated zoning application for a $10 billion oil refinery/energy center in southern Union County on Thursday, Dec. 6.

The nearly 200-pages-thick document reveals that the Dallas energy company would build wetlands along the Missouri River; is asking to have no restrictions on the height of structures in the core industrial area; would have an annual economic impact of $13.7 billion on South Dakota's economy alone, pumping $20.4 million into the local school district and adding $1.2 billion in value to the region in general each year.

The energy center's property taxes alone would be $28.8 million, once the refinery is completed, according to figures compiled by Stuefen Research of Vermillion for Hyperion's economic impact statement.


The company is asking to rezone 3,882 contiguous acres north of Elk Point from agricultural zoning to an Energy Center Planned Development District (ECPDD). The district would have a heavy industrial area with the refinery at its core, surrounded by an area of less-intensive industrial use. That zone would allow agriculture, but not concentrated livestock feeding operations.

The document states that will add 1,826 refinery related jobs.

It will be the biggest construction project in South Dakota's history, and thought to the second largest project in the United States, behind the Big Dig Project in Boston.

The new energy center, the document states, would be the first refinery built in the United States since 1976.

The company is proposing that Union County adopt an ordinance reflecting the changes made by its application and general plans.

The application proposes the establishment of a new planned development district – the Energy Center Planned Development District – and the rezoning of the needed property into that district by adoption of the ordinance by the Union County Commission.

The new district includes modifications to the county's zoning and subdivision requirements.

The employment during construction will average 4,500 full time workers. That number will peak at just under 8,000 full time workers for a six month period during the third year of construction.

The energy center's direct construction costs are expected to be $9 billion in 2007 dollars. A contractor rate tax of 2 percent of the project cost would yield $180 million in tax revenues if the full rate were applied.

Assuming the project is qualified, a 90 percent refund of this amount would apply under provision of South Dakota tax law, and $162 million of the project's contractor taxes would be refunded.

Hyperion pledges an average of 60 percent useable open space, with 80 percent open space in the less-industrial ring. An undeveloped perimeter of more than 600

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feet would surround the entire site.

The facility would use 8 million to 12 million gallons of water per day from either the Missouri River and, or, deep groundwater wells, the application says. Hyperion will construct shallow wells along the river and return treated water through a wetland it will built along the river west of Elk Point.

The application says the energy center "is designed to be self supportive so as not to increase the burden upon local governments or taxpayers." Hyperion would build its own water, wastewater, electrical improvements and interior roads. The application estimates 100 trucks a day would visit the facility during peak construction and 50 per day once it's in operation.

The company would also provide its own around-the-clock fire protection and security.

The planned development district would allow a variety of uses, including a private airport or heliport, truck and rail washing and repair facilities and an allowance for residential housing and mobile homes to be parked there during the estimated four-year construction period, among other uses.

Uses not specifically allowed would be prohibited under the zoning ordinance proposed in the application.

The Hyperion Energy Center would refine 400,000 barrels of Canadian crude oil per day. It would also produce some electricity for its own use.

The planned development district would also allow for ethanol and wind energy production and on-site aggregate mining. But initially at least, the facility would produce ultra low-sulfur gasoline, ultra low-sulfur diesel fuel and jet fuel.

In its application, Hyperion pledges to use the latest technology to make its energy center the most environmentally friendly refinery in the country, to limit noise and light pollution and any other negative impacts on the community.

The application also lists the various state and federal permits it would be required to have.

Now that the application is filed, the public part of the process begins. The company, which began privately buying purchase options on land in southern Union County about 18 months ago, only revealed its identity and purpose in June.

Hyperion held three public forums this week, to allow citizens the opportunity to talk with 30 experts, including engineers and chemists.

The next step, expected perhaps as early as next month, is for Hyperion's application to be considered by the Union County Planning and Zoning Commission, which will hold a public hearing.

It will then make a recommendation to the Union County Board of Commissioners, which has the ultimate responsibility for a decision on the zoning. The board is also required to hold a public hearing before voting on the application.

Hyperion stated at a Union County Commission meeting Dec. 4 that it welcomes a public referendum on the zoning change if its approved by the commissioners.

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