Dispatches from the Heartland

Sure, a nationwide Low-Carbon Fuel Standard (LCFS) imposed on high from Washington would be bad news for the entire nation – at least for the parts of the country where people heat their homes, drive to work, and, as of today, have the luxury of having a place at which to work.

But for some parts of the country, the impact could be even more severe. We’re talking in particular about regions that rely on secure, affordable supplies of Canadian crude to power their local economy. Places like Montana, for instance – where Canadian energy accounts for 93 percent of the oil Montanans use, oil that would be banned under an LCFS. Minnesota (83 percent) and Illinois (53 percent) are a few other prime examples.

Given all that, it’s nice to see media outlets in the area getting up to speed on CEA’s Secure Our Fuels campaign, and apprising their readers of the serious consequences for them and their families if a federally-imposed LCFS scheme is attached to the climate bill moving through Congress. This piece, filed by reporter Leslie Brooks Suzukamo, appeared this morning in the St. Paul Pioneer Press in Minnesota:

This week, Consumer Energy Alliance launched an ad campaign in the Dakotas, Montana and Tennessee opposing low carbon fuel standards. The group says a national low carbon fuel standard would raise the cost of gasoline by 60 cents a gallon and make Canadian [oil] sands oil so expensive that U.S. refiners would switch to lighter oil from the Middle East.

David Holt, the group’s president, said more states are talking about low carbon fuel standards. “It does nothing for the environment, and it restricts North American energy supplies and leaves us more dependent upon (overseas) imports.”

Minnesota refiners support the alliance’s campaign. “Minnesota’s access to Canada is an advantage,” said Jake Reint, spokesman for Flint Hills Refinery in Rosemount. A low carbon fuel standard “would turn that on its head, and instead of being on the front end of the pipeline, we’d be on the back end.”

Few states stand to lose more of their current energy supply under an LCFS than Minnesota. But no state stands to lose more of its future supply than South Dakota. Indeed, in the extreme southeast corner of the state, an extraordinary project is underway that will deliver the United States its first new refinery built from the ground up since the Garyville, La. facility in 1976. It’s called the Hyperion project, and estimates suggest it will generate 1,800 new (and permanent) jobs, $13.7 billion in local economic activity, and $50 million in annual state tax receipts. That is, as they say, some serious cheese.

Hyperion is scheduled to open its doors in 2014, and when it does, it’s expected to receive and process more than 400,000 barrels of secure Canadian crude a day. Naturally, a nationwide LCFS would shut that proposition down cold – in one fell swoop, canceling thousands of high-wage jobs and zeroing out billions in area economic development.

News and views related to the Hyperion project have been closely followed by the state’s largest newspaper, the Argus Leader. But no paper has covered this issue closer, better, and with more staff resources than the Sioux City Journal – whose newsroom, although based in neighboring Iowa, is only about a 20 minute drive from downtown Elk Point, S.D., home of the Hyperion project.

We’re talking about a paper that live-blogged a Hyperion-related air permit hearing from the steps of the South Dakota capitol – a six-hour drive from Sioux City. (Actually, the hearing was held in a nearby hotel conference room [capitol wasn’t big enough], but you catch what we’re saying here).

Late last night, Sioux City Journal business editor Dave Dreeszen posted CEA’s South Dakota TV ad on his website, and followed it up with this dispatch:

New environmental regulations for transportation fuels being considered in Congress would deal a “devastating” blow to U.S. projects like the proposed Hyperion Energy Center in Union County, according to a coalition of business groups.

Some majority Democrats back legislation that would lower carbon emissions in U.S. vehicles. The so-called Low-Carbon Fuel Standards, or LCFS, would unfairly penalize heavier … oil such as the crude from the Alberta, Canadian oil sands that Hyperion plans to process.

Last month, Hyperion secured a state air quality permit for its $10 billion refinery, which would process of 400,000 barrels per day.

“No permit in the world is going to save this project if LCFS is put in place,” said Chris Tucker, a spokesman for the Consumer Energy Alliance, a 125-member group that includes oil companies, retailers, trucking and transportation groups and business organizations like the U.S. Chamber of Commerce.

Sad, but true. Air, water and land permits aside, the success of the Hyperion project – and the continued health and well being of the South Dakota economy – depends on the LCFS threat being neutralized in Washington. That’s what this campaign is all about. Won’t you join us?

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