Proposed oil refinery the center of political debate
Iowa politicians weigh environmental risks against potential economic gains
By Matt Vasilogambros 10/6/10
The Iowa Independent
A proposed 400,000-barrel-per-day tar sands oil refinery along the South Dakota-Iowa border is stirring an increasingly polarizing debate, bringing both environmental and economic concerns to the forefront. The refinery is even becoming an issue in the gubernatorial campaign between Republican Terry Branstad and Democrat Chet Culver.
The $10 billion refinery will be built in Elk Point, S.D., just 30 miles north of Sioux City. With the area’s wind patterns and flow of the nearby Missouri River, environmental activists are calling the proposed refinery potentially “devastating” to Iowans’ safety. Although the Texas-based Hyperion Refining LLC says the facility will create 10,000 jobs — many of which will go to Iowans, the company assures — the negative environmental impacts of the oil extraction from the tar sands is well-document, critics say.
This issue was brought to the main stage when former-Iowa Department of Natural Resources (DNR) Director Richard Leopold sent a letter in July to the South Dakota Department of Environment and Natural Resources and to the U.S. Environmental Protection Agency (EPA) that addressed several areas in which the proposed refinery would negatively impact Iowa’s environment. He called for an environmental impact study — which South Dakota law does not mandate. Among the concerns brought forward were potential harms to Iowa’s air and water quality.
Jim Redmond, conservation chairman of the Northwest Iowa Group for the Sierra Club, said emissions from the refinery will not only float to nearby Iowa natural prairie and wildlife areas, but also to the Joy Hollow Girl Scout Camp that sits just 10 miles from Elk Point. Additionally, Redmond emphasized that tar sands oil is the dirtiest type of oil on the planet. After the ecologically devastating extraction process, refining the tar sands into usable crude oil uses a great deal of natural and economic resources.
“This particular refinery, even though its been labeled ‘green’ by its proponents, will be putting out more carbon dioxide per barrel than any other refinery in the United States,” Redmond said. “South Dakota should be putting their money into renewable forms of energy the way Iowa has been. Iowa is second in the country in wind generation — that didn’t just happen, people worked for that for years. And here’s South Dakota and other places trying to just keep doing what they’ve always been doing. They know fossil fuel refining, they know gasoline and so they’re just trying to continue down the same path that’s a dangerous one.”
The Sierra Club is suing the state of South Dakota over the disputed Hyperion air permit. Peter Carrels, the regional representative for the Sierra Club based in Aberdeen, S.D., said the organization felt vindicated after the EPA and the National Park Service separately identified specific shortcomings in the company’s air permit. Carrels said the proponents of the refinery have given short shrift to the public health and environmental problems inherent in the refinery. The lawsuit is still waiting to be scheduled for a court date and therefor has not yet been resolved, he said.
“We don’t think the public has been adequately informed as to what’s at stake,” Carrels said. “The economic cheerleaders conveniently fail to discuss the public health or environmental problems that are inherent in an oil refinery of this size refining tar sands crude oil — which is by its nature the dirtiest crude oil on the planet.”
Carrels said Hyperion has admitted its refinery will emit 19 million tons of carbon dioxide each year, while also acknowledging it will emit over 8,000 tons of chemicals that cause human health problems each year. Additionally, he estimates the refinery will use 9 t0 12 million gallons of water per day and is unsure where that water will be disposed.
The concerns of both the Sierra Club and Leopold — who now works for the U.S. Fish and Wildlife Service — were dismissed by Branstad at a recent town hall forum in Ames, citing the possibility of bringing jobs to Iowans.
“This is the same DNR director who came out against the first oil refinery that’s been built in this country in over 30 years,” Branstad said. “It’s just a few miles from Sioux City, and the Sioux City chamber is very excited about it. We should not have government leaders working against economic development projects in our state.”
Troy Price, a spokesman for Culver’s gubernatorial campaign, shot back saying Branstad is disregarding the environmental impact of the new refinery.
“Gov. Culver believes our number one priority is creating jobs. But those jobs must be in the best interest of our state and its future,” Price said. “It comes as no surprise that Terry Branstad would say what he did without knowing the full impact this would have on our environment. This is the same man who brought hog lots to Iowa, and opened the doors to Jack DeCoster. Terry Branstad has a record of helping his corporate friends on Wall Street at the expense of the environment, and that’s what he will do again if elected.”
U.S. Rep. Steve King, whose district encompasses the South Dakota border region, said in an interview with The Iowa Independent that there is no scientific proof for such environmental concerns, and those those who oppose the refinery threaten the energy sustainability of the Midwest.
“I’ll send a message to [Leopold] right now, and that is that he has no basis to hypothesize that the Loess Hills or the Missouri River are threatened, and he should go find a scientific basis before he throws a red herring out in front of the path of something that America needs,” King said. “We have all of that oil in the region, all the oil in the tar sands, and that’s going to go somewhere. And if it goes anywhere other than not through Iowa and not through the Midwest, it’ll go west of the Pacific Ocean and probably across the ocean to places like Japan, Korea, China. So, let’s bring it down here to do that, and we can do it in an environmentally safe and sound way.”
Redmond refutes the common jobs claim made by proponents of the refinery. He said most of the jobs needed for construction and operation of the refinery are engineering-based and will likely be imported from other regions.
“The actual jobs that will occur there during construction and the jobs when the refinery would be operational are likely not to be filled by local people, and I think that Hyperion stated that in one of the [air permit] applications that they made,” Redmond said.
In Appendix G of its air permit application, labeled “Growth Analysis,” Hyperion recognizes that several jobs will have to be imported. Of the total 1,826 jobs that will come when the refinery becomes operational, only 577 will likely come from within the region — or within a one hour drive from Elk Point. Hyperion estimates, therefore, 1,249 jobs will come from outside the region. Additionally, the company’s analysis estimates 32,000 new people will be added to the region through direct and indirect jobs.
Hyperion’s employment website specifically states, however, the company is committed to employing local residents and have an initiative “to train and hire South Dakota workers for the project.”
“The other thing is that the area is going to go through a boom and bust economic process,” Redmond said. “You got those 10,000 construction workers here, things are going to get awfully tight — the infrastructure is really going to be under a lot of pressure, the social structure is going to be under a lot of pressure, and then when the bust comes the area economically will experience a hangover.”
Local support
The oil refinery continues to see support, however. Both the Yankton Area Chamber of Commerce — which encompasses the Elk Point area — and Mercy Medical Center of Sioux City have endorsed its construction. In addition, voters of Union County, S.D., approved a zoning measure in 2008 that allows Hyperion to build the proposed refinery.
In response to the July letter from the Iowa DNR that addressed its environmental concerns, Steven Pirner, secretary of the South Dakota DENR, sent a reply on Aug. 12 explaining the legal actions that have taken place over the refinery. Furthermore, he reassured the Iowa DNR it would be an integral part in the permitting process for Hyperion. This, in effect, started a conversation between its department and Iowa DNR Interim Director Patricia Boddy — a conversation that will get more ernest by the end of the year. Right now, the Iowa DNR is bogged down with a Dec. 1 deadline to complete its reports on July’s Lake Delhi disaster, said Iowa DNR Communications Bureau Chief Kevin Baskins.
Baskins said South Dakota wants to go through the permitting process with Iowa so that any concerns can be addressed immediately. Baskins said the Iowa DNR will not have an official position on the refinery production until those concerns are addressed.
“I think were going into it with an open mind,” Baskins said. “The original letter that we had addressed what concerns we have in terms of potential environmental impacts, and South Dakota has responded that they will go through their permitting process to see if some of those concerns are being addressed. If there are still concerns, we’ll discuss if there’s ways that those can be addressed outside of the permitting process.”
It is clear that any sort of construction at the Elk Point site is a long way off. Until all disputed permits are finalized, Hyperion will delay the refinery’s development. Additionally, a pipeline that would deliver the tar sands oil has yet to be approved or designed.
Editor’s note: The original story said the Hyperion Energy Center would be serviced by the Keystone XL pipeline. While that was proposed, the company that owns the pipeline — TransCanada — has since said it is not economically feasible.
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