Phillips: Project is beneficial locally and nationally

By Julie Ann Madden

Hyperion Project Executive Preston Phillips provided a summary of their oil refinery project at the Jan. 10 Union County Planning & Zoning meeting. “We’re very excited to be here,” said Phillips, explaining “Hyperion” is the brand name of the private, family-owned company headquartered in Dallas, Texas. Saying this meeting was an “extra step in the due diligence process” that Hyperion officials had been working on for a number of years, “I can’t reiterate how excited we are to be here today to provide you all information and to answer any questions you may have.” “The United States consumes around 20 million barrels of petroleum per day,” said Phillips, explaining why a project like this should be built. “We import between 3 and 4 million barrels a day of refined projects. Basically, that says the United States doesn’t have enough refining capacity in the United States to meet its own needs for transportation fuel like gasoline, diesel and jet fuel.” “The United States needs new refining capacity that’s not along the gulf coast,” he said, reminding people of what happened in 2005 when Hurricanes Katrina and Rita struck the Gulf of Mexico. “Hyperion believes even if we’re not the ones to build that, somebody needs to build new refining capacity.” With Canadian oil sands deposits, the crude oil can either stay in North America for refining or go elsewhere, he said. “Every barrel that leaves North America is going to have to be replaced with a barrel from somewhere else. It makes no sense for those barrels to leave North America.” With oil imports increasing and United States refining production decreasing, “Hyperion is a firm believer that United States is going to need all the sources of energy it can find to meet the demand in the future, even with renewables, there is not enough access to refined capacity to produce the transportation fuels the United States needs to continue its economic growth,” he said. “This facility will be an important supply and source of clean transportation fuels to South Dakota and its neighboring states,” said Phillips. “One of the unique aspects of this project is that Hyperion Energy Center is going to create a ‘center of excellence’ in terms of efficiency, operation, environmental stewardship,” he said. “Our objectives for this project and our motivation for this project is really to raise the bar for this industry and set a new standard.”  “We think we can do this,” said Phillips. “It may take a little more planning and a lot of hard work but this business and responsible environmental development are mutually exclusive...a modern, well-run refinery can coexist easily with its surrounding environment.” Hyperion began looking for a site for this project in the Midwestern United States “some time ago, in seven states, 30-plus sites,” he said. “We’ve now dwindled that down to a handful of sites, which this site (Union County) is the only site we’ve publicly announced.” “One of the philosophical approaches to how we do business is a commitment to transparency and openness,” said Phillips. “Hyperion doesn’t want to be in a community that doesn’t want us to be there.” Through knocking on Union County residents’ doors, three “public awareness open houses” and a direct mailing, “I think we’ve earned overwhelming support” throughout the county, he said. “We plan to continue our philosophical approach of transparency and openness,” said Phillips. “We look forward to engaging the community. Hyperion wants to be a good community neighbor, a good business neighbor.” As Phillips continued, he told the Planning & Zoning Board, “We won’t show anything here today that we didn’t show at those public awareness open houses.” He showed a map outlining the 3,800-acre location of the proposed refinery and Integrated Gasification Combined Cycle power plant, noting it would have both an Industrial Zone and Transitional Zone with a minimum buffer of one-eighth of a mile.  Phillips explained why this Union County site was selected: its ready access to transportation infrastructure, rail access, access to a labor market and proximity to a plentiful supply of water.  “Proximity of this site to the Missouri River offers a source of water that can easily meet the needs of this facility while only accounting for a miniscule amount of water that flows through the Missouri,” said Phillips, adding the project will be “state-of-the-art.” “Hyperion has approached this project in a number of ways to be green and environmentally responsible,” said Phillips. They plan to take the “significant amount of petroleum coke” the facility will produce and convert it into synthetic gas, which will be converted further into hydrogen, steam and electricity to produce the utility needs of the refinery, he said, adding they have designed the facility to eliminate the petroleum coke “cracker” units, which are known to emit a lot of emissions. In addition, their plan calls for reusing water, said Phillips. “We are creating a facility that will produce basically 80 percent less emissions than the average Californian refinery in which the state of California has the strictest regulations for facilities of this type in the United States.” “We can say Hyperion is at a minimum one-thirtieth of emissions when compared to the typical coal-fired plants in this Midwestern area,” said Phillips. “Even if you look at just power plant emissions (of Big Stone in South Dakota and George Neal in Iowa) compared to combined emissions of our refinery and our power plant, ours is substantially less and that is just one indication of our commitment to doing it the right way and raising the standard for the industry but, two, it reflects how far we’ve come in 30 years plus more successful.” Phillips noted their proposed facility will use approximately 10 million gallons of water per day while area center pivots put out about 1 million gallons a day when operating. “The average amount of water used by 180 acres of corn in Beresford, S.D., is about 1 million gallons per day,” he said, adding their project’s water usage “is not much different than what agricultural land is using today.” In addition, Hyperion plans to capture all storm water that comes onto their property for use in their facility, he said, and the “gray water” from their facilities’ bathrooms and mess hall will be recycled as feed-water for the facility.  

Economic Impact

“The project is of substantial capital investment,” said Phillips, explaining that it will cost about $10 billion, of which about $9 billion will be direct construction costs. During the four-year construction period, “we’re looking at a direct spend in South Dakota of approximately $3.6 billion, he said. “It will have an economic impact of around $4.5 billion over that (time period).” With an average of 4,500 construction workers, Hyperion will generate state taxes of $50 million over that period of time, said Phillips. “Once in operation a facility will have an economic impact of an estimated $13.7 billion on an annual basis and generate $1.2 billion of value-added income every year, which you can equate to wealth generation.” The project would be assessed about $2 billion to pay approximately $20 million in school property taxes and about $8 million a year in county, fire and township taxes. 

Environmental Impact

Not only does Hyperion have a number of state and federal permits to obtain into addition to rezoning of the proposed site, but “Hyperion thinks of a lot of innovative things, not just in terms of air and water,” said Phillips, explaining that they are going to use “cut-off lighting and variable lighting to minimize the amount of light pollution. Many states and many communities around the country are now invoking or embracing regulations to eliminate light pollution, and we think that’s important and want to do our part with this facility to achieve that.” “This facility is not going to smell,” said Phillips, telling the board at the Jan. 16 hearing, they will hear from some Union County residents and state officials who traveled to southern California to visit refineries. “There was no noise. It did not smell. There were million-dollar homes right across the street from the refinery.” “That just goes to show and confirm with a modern, well-run facility like this, it does not create any nuisance to its neighbors,” said Phillips, noting that many of the permitting processes have public comment periods. Hyperion plans to create a recreational wetland area, next to the Missouri River where they will have shallow wells to draw river water for the facility’s use. “Our intent is to provide an area that is beneficial to the community,” said Phillips, “that will provide a high quality habitat for recreational outdoor uses.” Permits are required to mitigate any wetlands found at the proposed site, he said, adding their motivation in creating the wetland recreational area is not to satisfy permits but to add value to the Missouri River recreational area.    

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on the Jan. 10 meeting,

read the Jan. 16 edition of