Good news & bad news

Citizens from the Vermillion and Elk Point region let their feelings of opposition to Hyperion's plans be known by staging a public protest outside of Hyperion's Elk Point office on Earth Day in April 2008. (Photo by David Lias)

Depending on ones point of view, there's good news and bad news regarding the Hyperion Energy Center, proposed to be constructed eventually in Union County not too far east of Vermillion.

The good news is a recent news report concerning the energy centers expected emissions of greenhouse gases contained a mathematical error that greatly flawed the information in the story.

The emissions wont nearly be as severe as the news story initially indicated, according to Hyperion spokesman Eric Williams.

The bad news? Plans for the proposed refinery have been flawed from the very beginning, according to Pete Carrels of Aberdeen, who as a Sierra Club representative is highly involved in overseeing the development of the proposed energy center.

So far, not a shovelful of dirt has been turned to indicate construction is about to begin. Hyperion is currently still in the process of securing needed permits, and that could take time as the energy center faces legal challenges from the Sierra Club and Save Union County, a local organization opposed to the refinerys construction.

Hyperion Resources, Inc., a privately held, international energy company based in Dallas, announced its plans to build the most environmentally sound energy center in the United States, including the first oil refinery built in the country since 1976, during a press conference held in the Union County Courthouse in Elk Point in June 2007.

The news ignited a firestorm of controversy that smolders yet today.

The latest round came with a report in the Sioux Falls Argus Leader last month, which stated that the proposed oil refinery in Elk Point will release almost double the amount of a greenhouse gas as previously shown, according to documents posted on the state Department of Environment and Natural Resources website.

The story noted that estimates of greenhouse gas emissions from the proposed refinery inadvertently omitted a step in the refining process in the company's October submission to DENR, which projected that the plant would release 16.9 billion tons of greenhouse gases annually, including 498 tons of methane.

The total amount of methane emitted now is projected at 979 tons per year after adding data from the refinerys coking units, the Argus Leader reported, which would create a refining byproduct that can be used to provide power to the plant. The analysis was done by Raleigh, NC-based RTP Environmental Associates, an environmental consulting service.

Williams said that initial news report contained incorrect conclusions based on a reporters faulty math.

Depending on how you calculate it, whether you calculate it on a mass basis, or a CO2 equivalent basis either way, its (the emissions increase) its far less than 1 percent change in our admissions, Williams said. The Argus Leader was flat wrong.

He noted that the newspaper noted in a following edition that its story contained errors in its calculations.

Their first story actually had us with probably more greehouse emissions than I think the entire United States, Williams said. We did make a change in our calculations on the methane. Methane is one of the greenhouse gases, and far and away your largest, in terms of amount, of greenhouse gases is CO2.

So what the CO2 does is it takes what it calls a CO2 equivalent, and they'll say 'x amount of methane is equivalent to y amount of CO2,' so then they can report all greenhouse gases lumped together, Williams said.

Kim Smith of the South Dakota Department of Environment and Natural Resources in Pierre confirms the error in the initial news report published by the Argus Leader, which states that the refinery would release 16. 9 billion tons of greenhouse gases annually.

It should have been million, with an m, instead of billion with a b, Smith said.

Hyperion plans to use a refining byproduct called petroleum coke, or petcoke, to supply about three-quarters of its power.

In October 2010, Hyperion submitted a review of Best Available Control Technology (BACT) for emissions of greenhouse gases. That review inadvertently omitted the coke drum steam vents, which are a potential source of greenhouse gas emissions.

According to Hyperions revised data, submitted in November 2010, the potential annual emissions are 10,100 tons of CO2e (carbon dioxide equivalent) per year.

In the filing submitted to DENR, the estimates of our methane emissions increased by 480 tons per year, from 500 tons per year to 980 tons per year, Williams said. As part of its greenhouse gas emission reporting protocols, EPA has established set calculations that take all greenhouse gasses and have them calculated in whats called CO2 equivalent, often referred to as CO2e. Under EPAs reporting system, a ton of methane is worth 21 tons of equivalent CO2, or CO2e. Thus, in our most recent filing, this is calculated as an increase of 10,100 tons per year of CO2e.

Hyperions previously reported methane emissions, expressed as CO2e, were 10,500. Adding the 10,100 from the most recent filing, this has now increased to 20,600 tons per year, he said.

Thus, prior to the filing that DENR posted on its website last week, our reported CO2e emissions were 16.93 million tons per year not billion. Now our CO2e emissions are 16.94 million tons per year, he said.

When emissions are calculated on a CO2e basis, the increase is 0.06 percent, and if calculated on a mass basis (not as C02e), the increase is 0.003 percent, William stated. Any inference or presentation that our emissions have doubled is wrong by orders of magnitude.

Carrels believes its important for everyone, including the media, to focus more on permits and numbers when discussing the Hyperion project.

Im concerned that the stories that are being written by most of the people in journalism have failed to hit the mark in what I feel are the questions that havent adequately been addressed, he said. We should be asking whether or not a refinery like this is really needed.

Carrels said there is clear evidence that an oil refinery is a bad business idea.

We know that the most recent research and comprehensive studies indicate that oil use in this country is shrinking, and we know that the refinery sector is, he said. We have to ask ourselves why the state of South Dakota would support a bad business idea that's going to destroy the quality of life for hundreds of families who have been in productive positions in their communities for generations.

We get bogged down in the minutia of permits and how much methane gas, and all of that stuff is fixable by agencies and Hyperion. But I don't think that the question we should keep asking, Carrels said. We need to ask is it worth doing this?

The fact that Hyperion had to revise its greenhouse gas emission figures just validates our concerns that this is a bad business idea by people who dont know what they are doing, he said. And they are being overseen by an state agency with no experience in oil refineries. That, to me, is the bottom line problem here.

He reiterated how the refinery likely would disrupt the lives of hundreds of families. Were talking about how public policy is conducted that has flown in the face of good neighborliness. Were talking about a governor (Mike Rounds) who allowed a group of carpetbaggers from outside of our area to impose a project on people who didnt want it, and the governor allowed them to do it in secret to gain momentum, Carrels said. I find that to be a very flawed approach to governing.

The state Board of Minerals and Environment granted Hyperion an air quality permit in August after finding that the Dallas-based company had met the requirements set in state laws and rules. Board members endorsed the Environment Departments recommendation to issue the permit for what would be the first new U.S. oil refinery built since 1976.

The Sierra Club and local groups Save Union County and Citizens Opposed to Oil Pollution have filed a lawsuit in state court arguing that the permit should be thrown out because it does not address some environmental issues.

The existing air quality permit requires Hyperion to begin actual construction of the Hyperion Energy Center by Feb. 20. In June, the firm submitted a request to extend the construction deadline to Aug. 20, 2012. That request is pending.

Hyperions refinery north of Elk Point would process 400,000 barrels of Canadian tar sands crude oil each day into low-sulfur gasoline, diesel, jet fuel and liquid petroleum gas.

The project would include a power plant that produces electricity for the refinery. It would use a byproduct of the refinery process, solid petroleum coke, which would be turned into gas and burned to produce electrical power.

Hyperion officials hope to start construction late next year. The company has not released any specifics about financing.

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