South Dakota Voters Approve What Could Be First New U.S. Oil Refinery in Decades

ELK POINT, S.D. – Voters in Union County on Tuesday approved rezoning for what would be the first new U.S. oil refinery in more than 30 years.

With all 13 precincts reporting, 3,932 voters, or 58 percent, endorsed their county commission's rezoning of almost 3,300 acres north of Elk Point for the $10 billion refinery while 2,855, or 42 percent, opposed it.

The ballot measure garnered solid support in the southern part of the county, with the Dakota Dunes precinct voting in favor 1,017-237 and the one containing North Sioux City approving the ordinance 492-184.

Most rural precincts strongly rejected the rezoning, but they didn't have the population numbers to overcome support in the county's largest towns.

Also backing the refinery were voters in the city of Alcester and in the city of Elk Point, which hosted several hours-long, controversial public hearings on the project.

Preston Phillips, a project executive for Texas-based Hyperion Resources, said he was ecstatic with the outcome.

"We'll continue to work with everyone in the county," he said. "We want to be a good corporate citizen. We want to be a good corporate neighbor."

Despite the approval of the rezoning, Phillips said Elk Point still is not the only site being considered and that the site selection process will continue.

"Any big project like this has to have options," he said.

Hyperion Resources had said it would leave Union County without a fight if voters rejected the rezoning.

Jason Quam of the group Citizens Opposed to Oil Pollution said late Tuesday his group will sit back and evaluate its next steps.

"It's going to be a long road before anything's done on it," he said of the refinery.

The vote was just one stop in a long process and must go through numerous environmental permitting steps, he added.

Quam also said he doubts the company has the financing to get the refinery built.

Mike Curran, who voted against the zoning change, said the company offered few specifics and instead embarked on a public relations pitch to sell the refinery. He said that when a representative called asking for his support, they couldn't give direct answers to any questions.

"As far as I see they never told as anything about it," said Curran, who lives just east of Elk Point.

Kim Hall said she was thinking about jobs when she cast her "yes" vote in downtown Jefferson Tuesday afternoon.

She said a project of that size would bring not just refinery and construction jobs but also would spawn new positions for teachers, police and other professionals. Teens graduating high school in Union County need good-paying jobs if they're going to settle in the area, she said.

"Everybody leaves, and it would be nice to have something for them to put to use their degrees and stay in the area," Hall said.

Elk Point Mayor Isabel Trobaugh said it was odd to have such a spotlight cast on her small town, but she said she was impressed with the high voter turnout.

"We're just a quiet little town," she said. "This is really exciting."

Trobaugh said the refinery would bring needed jobs to the county and that she didn't think it would harm the environment.

She said she talked to the mayors of Ponca City, Okla., and El Dorado, Kan. -- both towns with oil refineries -- and both assured her their communities had clean air and water.

The refinery is proposed for land just east of Interstate 29 between state highways 48 and 50.

Company executives said it would help the United States reduce its dependence on overseas oil. The refinery would process 400,000 barrels of thick Canadian crude a day,

The company petitioned to put the issue on the ballot after the Union County Commission approved the rezoning in March.

Supporters cited economic development benefits from the refinery. Hyperion officials said the project would mean 1,800 permanent jobs and another 4,500 construction jobs over a four-year period.

Hyperion called it a "green refinery" and said it would produce ultra-low sulfur gasoline and diesel and be among the cleanest and most environmentally friendly in the world.

Opponents raised environmental and quality-of-life concerns, but one project executive said the refinery will have the lowest emission levels of any U.S. refinery and will improve the quality of life for the area.

According to an air quality permit application filed with the state, the center each year would emit nearly 2,000 tons of carbon monoxide, 773 tons of nitrogen oxides, more than 1,000 tons of particulate matter, 863 tons of sulfur dioxide and 473 tons of volatile organic compounds. It would also generate 17.2 million metric tons of carbon dioxide each year.

The South Dakota governor's office has supported the proposal.

Opponents have noted the high-level support and the backing from economic development groups but said the local people would be the ones deciding the rezoning.

Critics of the proposal hit hard on the quality of life issue, saying an oil refinery would produce millions of pounds of toxins during its lifetime. They also said it seemed as if the state and local governments allied themselves with Hyperion and had not asked critical questions.

Plans called for construction to begin in 2010 and last about four years.