Fruth: Hyperion will help cure a weakening economy

Fruth: Hyperion will help cure a weakening economy By: David Lias By David Lias Plain Talk The Hyperion Energy Center, if constructed north of Elk Point in Union County, would serve as a positive economic catalyst totaling tens, and in some cases, hundreds of millions of dollars to not only southeastern South Dakota, but also industries far removed from the Midwest. Thatâ�?�?s according to Bill Fruth, a researcher with POLICOM Corporation of Palm City, FL. He spoke to a small audience Wednesday afternoon in the Dakota Valley High School auditorium in North Sioux City. Fruth based his conclusions on a study formulated by Randall Stuefen of Stuefen M. Research, Vermillion, along with additional data that wasnâ�?�?t included in the study. â�?�?I also did an economic impact study on my own to try to verify his results,â�? Fruth said. He said Hyperionâ�?�?s high wages will likely attract employees from a 60-mile radius of the refinery site. â�?�?Sixty is the magic number,â�? he said. â�?�?People will be willing to commute for about an hour to work at a high paying job.â�? The initial economic impact of the refinery is staggering, with a $10 billion total price tag. â�?�?But somewhere, as a result of the construction of a $10 billion facility, 164,000 jobs will be created,â�? Fruth said. He used the term â�?�?somewhereâ�? to indicate that not all of these jobs will be in the Elk Point area, or, in South Dakota. â�?�?But itâ�?�?s the number of people who have to work for a year to build a $10 billion refinery. These could be software developers in Seattle, steel workers in Pittsburgh, iron ore miners in Minnesota -â�?�? all get the benefit of the construction of this project.â�? The local value of the assembly of the refinery is $3.2 billion, Fruth said. â�?�? It will require the local employment of 49,000 jobs of a one-year equivalent, and they will be spread out over a four-year period in your community,â�? he said. If all goes as expected, construction of the Hyperion refinery could begin in 2010. Job numbers would be about 3,600 the first year of construction, and would peak at over 18,000 in 2013, as workers finish building the refinery. Job numbers would then decline for three years, as the construction phase is completed and the facility is prepared to begin receiving and refining oil. Employment will dip to approximately 9,000 jobs in 2015, and grow to over 14,000 jobs once refining begins. â�?�?The local economic impact on the area,â�? he said, â�?�?will depend on how much money these construction workers spend. The more they spend of what they earn locally, the greater the economic impact.â�? To help describe the importance of good paying jobs to a local economy, Fruth likes to compare an area to a baseball team. In some parts of the country, job opportunities, like ball players, arenâ�?�?t all good. And regions who keep adding poor-quality jobs to their â�?�?teamsâ�? or rather their workforce, will experience a steady decline in batting average. Something similar has been going on with the economy in southeastern South Dakota for several years now, he said. He displayed charts of several local economic indicators, including industry, employment and wages. The regionâ�?�?s economy, according to his data, has been lagging close to the countryâ�?�?s weakest Metropolitan Statistical Areas (MSAs) since 1977. â�?�?The size of your economy hasnâ�?�?t really grown since 1978,â�? Fruth said. Allowing Hyperion to build its proposed $10 billion refinery in Union County would raise the regionâ�?�?s economic â�?�?batting averageâ�? considerably, he said. The direct economic impact and ripple effect of the refinery and energy center would be powerful and long-lasting, because the refinery would operate in the region for several decades. After the refinery is constructed, Fruth said, the facility will create transactions â�?�?somewhereâ�? â�?�? meaning throughout the country â�?�? totaling $26 billion. Besides the 1,800 people that will work at the refinery, Hyperion will create another 61,000 jobs in other locations across the country or globally. â�?�?Of those 61,000, about 20,000 jobs will be involved in extracting the oil and getting it to the plant,â�? Fruth said. â�?�?Locally, we could peak at 14,000 jobs on an annual basis as a result of this facility.â�? The economic impact would be spread across a wide range of local businesses, from food services and drinking places and real estate, to hospital, hotels and motels and car dealerships. Once the refinery is fully operational, the greatest economic impact will be felt by food services and drinking places, where an estimated 1,161 jobs will be created. Real estate, hospitals, physicians and dentists, legal services and hotels and motels are each estimated to likely experience job growth of between 200 and 250. Fruth said Union and Clay counties in South Dakota, and Woodbury County in Iowa, â�?�?will get a huge proportion of the economic impact.â�? POLICOM Corporation is an independent economic research firm which specializes in analyzing local and state economies. From its research, it determines if an economy is growing or declining, what is causing this to happen, and offers ideas and solutions to improve the situation.

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