Court asked to overturn air permit for SD refinery

[January 26, 2010]  PIERRE, S.D. (AP) -- Three groups opposed to a $10 billion oil refinery planned for southeastern South Dakota have asked a judge to overturn a state board's decision to grant the project an air quality permit.

The Board of Minerals and Environment granted the permit in August after finding that Hyperion Resources, based in Dallas, had met the requirements set in state laws and rules. Board members endorsed the state Environment Department's recommendation to issue the permit for what would be the first new U.S. oil refinery built since 1976.

The Sierra Club and local groups Save Union County and Citizens Opposed to Oil Pollution have filed a lawsuit in state court arguing that the permit should be thrown out because it does not address some environmental issues.

Hyperion filed its own court appeal, which asks that the board's decision on a carbon monoxide limit be overturned.

Circuit Judge Mark Barnett of Pierre has consolidated the two appeals to be heard as one case. After further written arguments are filed, a hearing is scheduled for June 23 in Pierre.

Ed Cable of Save Union County said Monday that opponents believe the state board has not complied with the federal Clean Air Act. Both the process and the information used by the board were flawed, he said.

Cable said the Board of Minerals and Environment also should have required a full environmental study before approving a permit for the refinery.

"If this doesn't require an environmental impact statement, what project ever would?" Cable said.

A spokesman for Hyperion did not return a phone call seeking comment Monday.

The refinery would be located north of Elk Point. It would process 400,000 barrels of Canadian tar sands crude oil each day into low-sulfur gasoline, diesel, jet fuel and liquid petroleum gas.

The project would include a power plant that produces electricity for the refinery. It would use a byproduct of the refinery process, solid petroleum coke, which would be turned into gas and burned to produce electrical power. The company says the gasification would allow the removal of more pollutants.

Hyperion argues the refinery would be a clean, modern plant that would reduce the nation's dependence on oil from overseas.

Opponents contend the refinery would emit too much pollution and hurt the quality of life in the area.

In documents filed in circuit court in Pierre, the opponents argue that the state air permit does not deal with many environmental issues and does not require Hyperion to use the best available technologies to control pollution. Hyperion has not proved that the refinery would comply with federal air quality standards, the lawsuit says.

In addition, the board made a mistake in not requiring an environmental impact statement before granting the permit, the opponents contend.

[Associated Press; By CHET BROKAW]

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