Hyperion officials, opponents wait for judges’ ruling

Posted October 10, 2012 at 5:00 am

by Julie Ann Madden

The fate of the Hyperion Energy Center is in the hands of the South Dakota Supreme Court.

After the hearing, Hyperion officials stated the judges’ decision with either break or make their project but they were confident the judges would grant in their favor as this was the third entity to issue an opinion on the case.

On Oct. 3, both sides gave oral arguments in one of the two cases before the state’s high court.

Opponents, which include the Sierra Club, Citizens Opposed to Oil Pollution and Save Union County organizations, contend state officials violated two distinct laws when they issued Hyperion Refining LLC a Prevention of Significant Deterioration Air Permit.

First the Environmental Policy Act in that the South Dakota Department of Natural Resources (DENR) and the Board of Minerals & Environment failed to require an Environmental Impact Statement, commonly called an EIS.

Opponents claim the physical size of the proposed Hyperion Energy Center, which is a 400,000 barrels-a-day oil refinery and Integrated Gasification Combined Cycle power plant sited for 3,800 acres in Union County, and its significant impact on the environment meet the requirements to have an EIS performed.

Their attorneys say the two governmental agencies abused their discretion when they rejected citizens’ request for an EIS.

The Board of Minerals & Environment didn’t require an EIS because it’s much broader and encompasses many subject matters which they do not have jurisdiction over. The opponents contend they need to bring in other agencies as well as receive public comments to do an EIS and by doing the EIS early in such a project, then all entities granting permits will have the information they need for the 13 permits Hyperon is required to get.

The EIS is taken and used much like a blueprint, said an opponents’ attorney. Here we have an air permit which is like a blueprint for the chimney of a house without looking at the rest of the house.

Hyperion attorneys claim that an air permit process, according to the Clear Air Act, is not when an EIS is required. It’s required through the federal Clean Water Act’s 404 Permit, which requires an EIS or an Environmental Assessment. He also pointed out an EIS is not mandatory in the air permit process.

Hyperion’s attorney said there is an exemption if the action (regulation) itself is of an environmental protected nature but opponents’ attorneys said that was a federal law while there was a state law that addressed this.

In addition, state officials erred in granting Hyperion’s request for an extension on this permit because time had lapsed before DENR secretary approved the extension, according to opponents. Opponents’ attorneys noted the DENR secretary can make the decision at any time after application is submitted.

Hyperion attorney argued all they were required to do was file for an extension during the 18-month time period.

The two sides disagree on the definitions of what “continuing activity” is in regards to the Hyperion Energy Center. Opponents say there is no construction activity going on for an extension of the air permit and Hyperion officials say the continued activity is the continued development of the project.

Opponents also told the court there is a difference between construction permits, which have an 18-month deadline, and operational license renewals. Hyperion attorneys stated the words “permit” and “license” are used interchangeably through the law. But, opponents say construction permits have expiration deadlines while operational license renewals can be extended without stopping operation.

“What we’re here on in the Environmental Policy Act and this act on a construction permit and timely extensions is application of unambiguous statutes,” said Hyperion’s attorney. “We’re not here to interpret them, construe them. We’re here to apply the statutes because they are unambiguous.”

“Hyperion’s attempt not to apply an unambiuous statutes is to eviserate it,” said the opponents’ attorneys. “The Environmental Policy Act must have meaning.”

One judge questioned whether the size of project and its impact on the community was relevant in determining if the air permit’s requirements had been met. In addition, he stated the court was only here on the air permit. He also questioned as to the permit extension process — does the permit continue until the DENR secretary decides whether to grant or deny the extension or end by the 18-month expiration date, meaning the secretary must make the decision within the 18 months. However, opponents’ attorneys said in other states “conditional extensions” can be granted while information on the reasons for an extension are being granted.

Another questioned that by requiring the broader EIS, state officials would be put in the position of making decisions beyond their authority and by enforcing the permit’s expiration date, it could force an arbitrary rush to judgement on whether to extend a permit.

One judge asked Hyperion’s attorney if they could do construction during litigation, and he responded, “Yes, you could but that would not be wise. It wouldn’t make sense to move forward without knowing the terms of the new permit or if we are going to receive it.”

“They’re without money, without land,” said Citizens Opposed to Oil Pollution spokesperson Jason Quam, after the hearing. “So without (that specific) land, the air permit is meaningless.”

“There are two things they have to sell: land which they don’t have control of, and an air permit which needs the land to go with,” he added.

However, if the judges find in Hyperion’s favor, Hyperion Vice-President Preston Phillips told media after the hearing, they can have the “land reassembled before the March 2013 construction deadline.”

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