Hyperion: Weak Oil Prices Won�t Slow Project

Hyperion: Weak Oil Prices Won��?t Slow Project Public Hearing Held On Union County Refinery By Dirk Lammers
AP Energy Writer ELK POINT — An executive proposing a $10 billion oil refinery for southeastern South Dakota says the project continues to move forward despite an economic downturn that has zapped crude oil prices and tightened credit markets. The refinery would process 400,000 barrels of Canadian tar sands crude oil into low-sulphur gasoline and diesel. It would be the first new refinery built in the U.S. since 1976. Hyperion Refining Vice President Preston Phillips, in Elk Point Wednesday for a public hearing on the project, said the Dallas-based company is taking a long-term view and he expects oil prices to improve and eventually stabilize at $70 to $90 a barrel. With prices in that range, companies will pursue Alberta tar sands ventures and ultra deep projects off the coasts of countries such as Brazil, he said. "At that price, all of these projects are going to happen," Phillips said. Phillips said the private company does not discuss financial matters, but he said the global credit crunch will not delay the project timetable of construction beginning in 2010 and operation in 2014. "Fortunately, from a debt perspective, we don't need to go out to the debt markets for a number of years, and there's plenty of time for those markets to come back," he said. Hyperion will first need to get its air quality permit approved, and that was the topic of a two-day state Board of Minerals and Environment meeting that began Wednesday. Burdette Hanson, who lives near the site of the proposed refinery, said Hyperion should be required to submit a full Environmental Impact Statement before the state approves an air quality permit. "We still believe the full environmental impacts should be known before any permits are granted," Hanson told board members. Mary Abraham, a retired chemist and educator who has lived near Spink for 32 years, said she strongly supports the project. She said Canada will continue producing tar sands oil, and she'd rather have it refined in the U.S. where controls in place will ensure the process is clean and environmentally friendly. "Refining it here is in the best interest of our children and grandchildren," she said. Just before Wednesday afternoon's public hearing, Phillips took a bus filled with board members, residents and the news media on a drive-by tour of the 3,300 acre site north of Elk Point. He said the goal was to give board members a better sense of the project and where the refinery and storage tanks will sit on the property. Phillips described the air quality permit as a "critical hurdle" that would allow the company to finalize supply and marketing contracts, shore up agreements with pipeline construction companies, pursue financing and hire construction companies. The state board continued listening to public comments on Wednesday night and planned to hear more on Thursday as it prepares for formal hearings on the air quality permit in Pierre in May.

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