Proposed Hyperion Oil Refinery, Elk Point, SD

In November of 2006, a local newspaper in South Dakota made the first report that “an unidentified company [is] interested in locating ‘a large manufacturing facility in Southern Union County’”[1]. Over the next few months, the community learned that said company was Texas-based Hyperion Energy, which was looking to build the first new oil refinery in the US since 1976, and the sixth largest in the nation, meant to refine bitumen from tar sands in Alberta, Canada[2].

Screen Shot 2016-03-28 at 3.30.49 PM
Proposed Hyperion oil refinery in Union County, SD (Moh 2012).

  • November 1, 2006: First mention of an unidentified company buying land options near Elk Point, South Dakota[3].
  • May 5, 2007: Local group ‘Citizens for Union County Committee’ begins telling landowners to stop selling land options, as the unknown facility could destroy thousands of acres of prime agricultural land[4].
  • May 27, 2007: Hyperion Energy is linked to the land purchases through registration of domain names[5].
  • June, 2008: Hyperion begins acquiring necessary permits, local voters approve to rezone land for industrial use[6].
  • April, 2010: Opposition groups file motions against permits granted to Hyperion, request an Environmental Impact Statement (which is subsequently denied)[7].
  • September 30, 2012: Land options expire as Hyperion continues to be held up in court concerning air permit challenges[8].

The refinery, or ‘Project Gorilla,’ as it was locally nicknamed, became a source of contention in the Elk Point community. The issue divided those who believed the refinery would bring much-needed jobs to the area and those who were concerned with the environmental and social sustainability of the center, including potential health affects[9].

Environmental Sustainability and Environmental Justice

The Hyperion Energy Center in Elk Point would encompass both an oil refinery and a power plant that would be powered by pet coke, a byproduct of refined bitumen petroleum from Canadian tar sands, subsequently making the center the “largest on-site producer of CO2 per barrel of refined product in the United States”[10]. This huge production of CO2 is clearly environmentally unsustainable, and the pollution from the use of pet coke in a power plant has also been tied to numerous ill health affects, including heart attacks, asthma, and decreased lung function[11].

While the affects of this pollution are detrimental to everyone, children are affected the worst.

Academic studies have shown that children living near oil refineries show higher rates of:

  • Decreased lung function
  • Oxidative DNA damage[12].
  • Children:
    • Have smaller airways that are more easily obstructed by pollutants
    • Spend more time outdoors
    • Developing organs that can absorb pollutants and cause life-long health problems[13]

Children also represent an already marginalized group. Families with children face much higher levels of poverty in Union County, SD (where Elk Point is located)[14]. Historically, children’s rights have been systematically overlooked in favor of parents’ rights, and they face a low status in society with regards to their ability to control their lives[15]. This holds true in Elk Point, as children would face much more harm from the energy center’s pollution, but their voices are not heard while parental interests of land values are prominently discussed[16].

Paul Mohai and colleagues quote Robert Bullard to define environmental justice as the idea that “all people and communities are entitled to equal protection of environmental and public health laws and regulations”[17].

Environmental justice is challenged when an already marginalized group, such as children or low-income communities, is disproportionately affected by an environmental ‘bad’, like a waste facility or polluting oil refinery[18]. As the state of South Dakota approved Hyperion’s air permits and denied the Sierra Club’s request for an Environmental Impact Study, they subsequently put children at a higher risk for adverse affects at the hands of an environmentally disruptive site[19]. This poses a clear issue of environmental justice, as an already marginalized group is bearing a higher level of risk from this facility.

The Hyperion Energy Center in a Larger Context

In the end, the Hyperion Energy Center was not built.

Although environmental groups had the company tied up in legal battles over the air pollution the center would create, there were also changes happening outside of South Dakota that halted the project. Since 2007 when the project was announced, US gasoline use has decreased 6%, and new sources of domestic oil eliminated the need for a center to refine Canadian bitumen[20].

There was also something missing from the original proposal: a pipeline. In addition to the center itself, a pipeline would need to be established to bring the oil from Alberta to South Dakota[21]. Such a pipeline could spread the affects of this proposed facility far from Elk Point: recent pipeline spills have polluted water and land in both Arkansas and Michigan, causing cardiovascular and neurological affects in people nearby[22].

The detrimental affects of relying on tar sand oil from Alberta stretch beyond the physical refinery and pipeline to the communities surrounding tar sand extraction sites, as well[23]. People in areas surrounding bitumen extraction sites in Alberta have been found to suffer from increased rates of leukemia and other blood-system cancers, and toxic chemicals in nearby waters accumulate in fish and can have adverse health affects in humans, especially on fetuses and children, after consumption[24].

Analysis of Sustainability: the Resource Curse

According to the Brundtland Commission, sustainable development is “development that meets the needs of the current generation without compromising the ability of future generations to meet their own needs”[25]. Considering resource curse theory, it is easy to see that the Hyperion energy center would indeed not meet this definition and be and unsustainable site.

Resource curse theory generally claims that “dependency on natural resources results in stifled development and negative socioeconomic outcomes”[26].

While the Hyperion project would, at first, create about 10,000 jobs during the construction process, it would end with only approximately 1,800 full-time, permanent jobs at the facility[27]. This is about the same size as the entire population of Elk Point, meaning that a large portion of the town would be dependent on jobs at the center.

Research on West Virginia coal towns have indicated, areas reliant on one resource and employer tend to have:

  • Higher levels of unemployment
  • Higher poverty
  • Lower per-capita income[28].

From a social perspective, then, the refinery is not a sustainable energy site, as this is a clear case of dependency on oil as a resource.

However, it is not the resource, necessarily, that brings about these detriments. Rather, it is the fact that the people nearest the resource do not receive the vast majority of the benefits, as they do not own access to the resource and profits leave the area where the resource is found[29]. In the case of the Hyperion facility, Hyperion is a Texas-based company, inferring that profits from the oil refined and power produced at the South Dakota facility would return to the leaders of the company in Texas[30]. Again like coal communities in West Virginia, Elk Point would face socioeconomic problems as the money made at the site people are dependent on for employment does not return to the community.

As it would have detrimental socioeconomic and environmental/ health effects on the Elk Point community, the Hyperion Energy Center would impinge on the ability of future generations in Elk Point to meet their needs. One must look past the short-term benefit of a few thousand jobs to understand how the resource curse will mean lower incomes, and the air pollution from a pet coke power plant may cause serious health problems in the future[31].

Conclusion

Between 2006 and 2013, the Hyperion oil refinery went from being an exciting rumor about a potential industrial site to a contentious local issue, dividing people who looked forward to the economic benefits and those who were concerned about the environmental impacts on the historically quiet, agricultural community. The facility would have brought approximately $4 billion in tax revenue to the area, but the opposition demanded a more rigorous environmental study on the proposed energy center, which an engineer later admitted would produce the most CO2 per barrel than any other refining facility in the US[32].

Children, in particular, are at risk from the environmental impact of this type of energy facility, which would refine bitumen with ten times more sulfur than conventional oil, harming an already marginalized group facing higher rates of poverty and lack of power over what will impact their lives[33]. Additionally, resource curse theory dictates that in the long run, the facility would be socioeconomically devastating to the community[34]. In the end, there were larger economic forces at work in this situation- US’s demand for oil continues to decline, there are new, cheaper, sources of oil in North Dakota, and the refinery became unnecessary in the larger energy landscape[35].


 

REFERENCES

 

[1] Linck, M. (2006, Nov 1). Union Co. eyed for ‘manufacturing facility’. Sioux City Journal. Retrieved from http://siouxcityjournal.com/news/union-co-eyed-for-manufacturing-facility/article_8ebd3ba9-8eb1-5924-8b1f-799f71a2598b.html

[2] Heisinger,J. & Wilson, J. The Fall of Hyperion, or How the Gorilla Died. Retrieved from http://southdakotasierraclub.org/living-river-group/living-river-group-accomplishments/the-fall-of-hyperion/

[3] Linck (2006)

[4] Linck, M. (2007, May 5). Citizens group form to block ‘Gorilla’ project. Sioux City Journal. Retrieved from http://siouxcityjournal.com/news/citizens-group-forms-to-block-gorilla-project/article_0dbee199-0a05-54f8-acbf-690e3091409c.html

[5] Linck (2006)

[6] Heisinger & Wilson

[7] Hyperion Energy Center (2013). Retrieved from http://content.sierraclub.org/coal/environmentallaw/plant/hyperion-energy-center

[8] Dreeszen, D. (2013, Jan 24). SD Supreme Court upholds Hyperion refinery permit. Sioux City Journal. Retrieved from http://siouxcityjournal.com/news/local/a1/sd-supreme-court-upholds-hyperion-refinery-permit/article_3f249be0-2511-5a94-b0d8-b53b67f15404.html

[9] Dreeszen, D. (2013, March 13). Another Roadblock for $10 Billion Union County, S.D., Oil Refinery. Sioux City Journal. Retrieved from http://siouxcityjournal.com/business/local/another-roadblock-for-billion-union-county-s-d-oil-refinery/article_1178828e-a16f-5563-98fb-cf347d75c5ab.html

[10] Heisinger & Wilson

[11] Bailey, D. (2014, Feb 26). Tar Sands Crude Oil: Health Effects of a Dirty and Destructive Fuel. Retrieved from http://www.nrdc.org/energy/tar-sands-health-effects.asp

[12] Rusconi, F., Catelan, D., Accetta, G., Peluso, M., Pistelli, R., Barbone, F., . . . Biggeri, A. (2011). Asthma Symptoms, Lung Function, and Markers of Oxidative Stress and Inflammation in Children Exposed to Oil Refinery Pollution. Journal of Asthma, 48(1), 84-90. doi:10.3109/02770903.2010.538106

[13] Air Pollution and Children’s Health (2002, Feb 28). Retrieved from http://oehha.ca.gov/public_info/facts/airkids.html

[14] United States Census (2012). Union County, SD, Selected Economic Characteristics. Retrieved from http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

[15] Roche, J. (2005). Children, Citizenship and Human rights. Journal of Social Science.Special Issue, 9, 43-55.

[16] Tyson, R (2007, June 24). ‘Gorilla’ project unveiled: US oil refinery would be first in three decades; cost ranges from $8 to $10B. Petroleum News, 12 (25). Retrieved from http://www.petroleumnews.com/pntruncate/161591867.shtml

[17] Mohai, P., Pellow, D., & Roberts, J. T. (2009). Environmental justice. Annual Review of Environment and Resources, 34, 405-430.

[18] Mohai (2009)

[19] Hyperion Energy Center (2013)

[20] Heisinger & Wilson

[21] Heisinger & Wilson

[22] Bailey (2014)

[23] Bailey (2014)

[24] Bailey (2014)

[25] International Institute for Sustainable Development (2013). What is Sustainable Development? Retrieved from https://www.iisd.org/sd/

[26] Perdue, R. T., & Pavela, G. (2012). Addictive Economies and Coal Dependency: Methods of Extraction and Socioeconomic Outcomes in West Virginia, 1997-2009. Organization & Environment, 1086026612464767.

[27] Tyson (2007)

[28] Perdue & Pavela (2007)

[29] Perdue & Pavela (2007)

[30] Heisinger & Wilson

[31] Perdue and Pavela (2007); Bailey (2014)

[32] Heisinger & Wilson; No Hyperion means Union Co. misses out on millions (2012, Oct 2). Retrieved from http://www.ktiv.com/story/19710574/no-hyperion-means-union-co-misses-out-on-millions-hyperion-oil-refinery-elk-point-south-dako

[33] US Census Bureau (2012); Roche (2005)

[34] Perdue & Pavela (2007)

[35] Heisinger & Wilson

Figure in pop-up: Filer, A (photographer). (2012). Elk Point, South Dakota [photograph], retrieved December 2, 2014, from http://commons.wikimedia.org/wiki/File:Elk_Point,_South_Dakota_%288114750965%29.jpg

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