PIERRE, S.D. – New federal rules aimed at curbing greenhouse gas emissions threaten to further delay the start of construction for the Hyperion Energy Center.
The controversial U.S. Environmental Protection Agency regulations would require new refineries, power plants and factories to use best available technology to control carbon dioxide and five other greenhouse gases blamed for climate change.
Hyperion developers had maintained its proposed oil refinery and power plant in Union County was not subject to the new greenhouse gas rules because its state air quality permit would be issued before the regulations kicked in on Jan. 2, 2011.
But the South Dakota Department of Environment and Natural Resources told the company this week the climate change rules would apply to the energy center because the agency would not have time to finish the permitting by year’s end.
“We won’t have a permit issued until after the greenhouse gas regulations take effect,” Kyrik Rombough, natural resources engineering director for the South Dakota Department of Natural Resources’ air quality program, said Friday.
Hyperion spokesman Eric Williams said Friday the company accepts the DENR’s decision, and plans to submit the additional data the agency requested by the middle of this month.
“Greenhouse gas standards are one of the many environmental aspects of the energy center we’ve been working to stay ahead of the curve, to be out in front of likely rules changes,” Williams said in an e-mail. “In fact, as you’ll recall, we prepared and submitted a detailed greenhouse gas analysis for the contested case hearing in anticipation of exactly this issue.”
Williams insisted Hyperion would maintain its current construction timeline. The Dallas, Texas-based company still expects to break ground by the end of next year on the energy center, planned for a 3,292-acre site just north of Elk Point.
Peter Carrels, a spokesman for the South Dakota Sierra Club, declined comment Friday on the DENR’s latest move on the greenhouse gas issue.
The Sierra Club and other opponents had earlier predicted the new climate change regulations would be the undoing of the energy center, which would emit 19 million tons of carbon dioxide annually, the most among U.S. refineries, they say.
Hyperion points out its critics are not using an apples-to-apples comparison. Unlike most other refineries that buy power from utilities, Hyperion’s complex would feature an integrated gasification power plant that would turn a petroleum byproduct into electricity to run the refinery.
The EPA late last year said it would classify carbon dioxide and five other gases that trap heat in the atmosphere as a danger to public health. The federal agency’s new regulations have run into fierce opposition from the energy, utility and manufacturing sectors, as well as some members of Congress, who are trying to block or delay implementation of the rules.
Earlier this month, Texas asked a federal court to block the climate-change rules, as did a separate court filing by an industry coalition which argued the rules would cost “hundreds of millions of dollars in administrative costs and delays.”
Nationwide, some power plants on the drawing board have rushed to complete their air permits before the new rules take effect.
The South Dakota Board of Minerals and Environment granted an air permit to Hyperion on Aug. 20, 2009. The Sierra Club and two local groups quickly filed a lawsuit, seeking to overturn the decision on the grounds that it violates the federal Clean Air Act and other environmental rules.
Earlier this summer, the judge put the appeal on hold and granted Hyperion’s request to reopen the permitting in order to delay the required start of construction by 18 months. Under the current permit, work would be required to start in February - just four months from now.
“... the department has determined that Hyperion’s application to extend the construction deadline remains incomplete at this time and the department will not continue the processing of this application until it is supplemented with an identification and discussion of the applicable federal greenhouse gas rules together with a best available control technology analysis for all six greenhouse gases,” Rombough said in a Sept. 27 letter to Hyperion project manager Colin Campbell.
Once Hyperion submits the requested additional information, Rombough estimated it would take a minimum of 90 days to complete the permit. Among other things, the department must hold additional public hearings on the greenhouse gas issue, as well as some other new EPA rules adopted after the permit was first issued.
The 400,000-barrel -per-day refinery, which would process crude from the oil sands region of Alberta, Canada, would open as early as 2015, the company said.
Hyperion insists the state-of-the-art refinery would be the world’s cleanest. Opponents dispute that, warning it would emit large quantities of dangerous pollutants into the atmosphere, as well as destroy the county’s rural way of life.
State and local leaders have touted the massive project’s promised benefits, which include thousands of new high-paying jobs and millions of dollars in increased economic activity.