FocusNew US refinery divides farm community

06 June 2008 23:15  [Source: ICIS news]

By David Rosen

HOUSTON (ICIS news)--The promises of job creation, a surging tax base and environmental safeguards did not sway Ed Cable to support the first new US refinery in decades, he said on Friday.

“This was battle number three out of probably 100 battles where we will resist and continue to resist,” said Cable, the head of a group called Save Union County, which has rallied against recent efforts to build an oil refinery in rural South Dakota.

The issue over whether to allow Dallas-based Hyperion Energy to build a 400,000 bbl/day refinery has divided tiny cities in southeast South Dakota, with small town residents split between welcoming the new business and preserving their way of life.

The refinery could come on line as early as 2014.

The fate of what might become the first US refinery built in decades now depends on the political temperament of rural residents in small communities, who have lived alongside each other for generations but are now bitterly split over the issue.

On Tuesday, voters in Union county approved rezoning measures by a 58-42% vote that would give a temporary green light for Hyperion to build the refinery on a 3,300 acre (1,337ha) tract of farmland.

It was one of the most contentious votes in recent memory for the area of about 13,000 people, with a sparse population of only 12 residents per square mile (12 residents per 2.59km²).

Construction of the refinery would come at a time when more companies are turning to nearby Canada’s oil and tar sands to increase their supplies.

The rezoning had previously been supported by a government committee and the Union county commission. Now, the company is seeking an air quality permit from the state government, and opponents of the refinery are pledging to fight construction in every step of the process.

The company claims the refinery would bring 1,800 new jobs to the area, give the local community a wealthier tax base and make a dent in the US’s dependency on foreign oil.

Opponents, on the other hand, are sceptical about the job and tax benefits of the project, and are wary of pollution.

“Those Texas guys don’t know nothing, they don’t know nothing about anything,” said Elk Point farmer Burdette Hanson, 85, a lifetime resident of the area and staunch opponent of the refinery.

Local government officials rallied around the refinery leading up to the vote, claiming the construction would create a tax base that would provide more revenue for local infrastructure and schools.

Union county commission chairman Doyle Karpen said the entire county’s tax base is currently $1.95bn (€1.25bn), while the estimated taxable value of the refinery once completed would range between $2bn-4bn. Even if the refinery turned out to be worth the lower end of that estimate, Karpen said, and the facility was worth $2.5bn, the tax revenues would come out to $20m more annually for the local school district - or about five times its current budget.

The new jobs would also be a boon to the area, Karpen said, since the current largest employer is a 1,500 person customer service phone operator bank.

“I would imagine we would offer more services,” Karpen said. “I don’t know if the demand for services would be all that great, but it would be a definite boom.”

But Cable was sceptical of the economic benefit to local residents, saying he doubted many of the new jobs would go to people living in the area.

“First of all we have very low unemployment today, and very few of the people, even for the interim construction jobs or the permanent jobs, could be found in the present pool that is unemployed,” Cable said. “The skills required for the permanent jobs simply do not exist here. Of the 1,800 jobs, you’re only going to find people in maintenance and perhaps clerical, perhaps one or two in management. But no one has petroleum or petrochemical-related degrees.”

Cable also said he believed the temporary construction workers would be brought to Union county from far away - and was disputed by company spokesperson Heather Keen, who said 4,000 of the 4,500 construction workers needed are available within an hour from the county.

The ballot measure divided communities where some families have lived alongside each other for more than a century.

In the days leading up to the vote, the rezoning was talked about in restaurants, coffee shops and water coolers - and conversation was not always cordial.

“[Discussion] was pretty strong in some places, in and around the refinery area,” said Union county commission vice chairman Marvin Schempp, another supporter of the project. “It kind of divided the communities. A lot of the neighbours, the ones that voted for it, they just keep their mouths shut.”

Groups formed on both sides of the issue and took their case door to door, while flyers were sprinkled throughout the area for and against the ballot measure. In the days leading up to the vote, graffiti was sprayed in white paint on several county roads urging residents to vote against the proposal.

Meanwhile, Hyperion held several informational sessions where people that lived in the area could meet with environmental experts to address their concerns, said company spokesperson Eric Williams.

Cable expressed frustration at the election results, given his group’s efforts, and said that many people who lived in the community did not want to listen to environmental concerns.

Cable said many of the project’s supporters were “older established business families, directed by their country club friends, and didn’t want to bother to learn the facts that might have shown them otherwise”.

Veteran Mayor Isabel Trobaugh of Elk Point, a city of about 2,000 and the seat of Union county, said opponents of the project were victims of a “not in my backyard” mentality, and that she can sympathise to some extent, since her backyard is immediately behind a school parking lot.

Trobaugh, who has been mayor for 12 years and was recently elected to a seventh term, also said no eminent domain would be involved in making way for the refinery, and several “very happy” families have already voluntarily sold their property to Hyperion. The refinery will also have a half-mile buffer around its boundaries, she said.

“Some of the people that were really against it live right close to the boundary of where this plant is going in, and I can understand,” Trobaugh said. “They said they didn’t want to look at a refinery, I can understand their feelings.”

($1 = €0.64)

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By: David Rosen
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