Thousands of Jobs, Billions in Economic Development Await South Dakota … Unless an LCFS Becomes Law

The last oil refinery built in America was Marathon’s Garyville, La. facility in 1976. But thanks to a recent decision by the South Dakota Dept. of Environment Environment and Natural Resources (DENR) to grant a critical air permit to the Hyperion project in Elk Point, S.D., that streak may finally be coming to an end.

Sure, that’s great news for the country, but it’s even better news for the residents of southeast South Dakota – who came out in record numbers last summer to overwhelmingly support the referendum tied to the project. And who can blame them? We’re talking about a shot in the arm for their local economy to the tune of 4,500 new jobs, and $10 billion-plus in economic investment and development.

A recent article in the Prairie Business Magazine details the “massive economic impact” that the Hyperion refinery would have:

While it has not received all the required approvals, the estimated $10 billion project would have a major economic impact on South Dakota and the region.

During construction alone, Hyperion would employ approximately 4,500 workers in the four years that it will take to build. At full production, 1,800 full-time jobs would be available at the plant. “Those will be good-paying jobs,” Williams adds.

The company would also need access to a rail line and has already contacted at least one South Dakota railroad company about the project. The rail line would be used primarily to receive materials and export products once the facility begins operations.

Estimates call for the project to contribute $13.7 billion annually to the state’s economy.

The article even quotes the governor’s top economic development aide:

Kim Olson, the director of the South Dakota Governor’s Office of Economic Development, says the state is looking forward to the project’s economic impact on South Dakota.

“Approximately $1.2 billion of that would go to salaries,” Olson says. “That provides a substantial means for wealth creation in the state and can lead to development of additional jobs.”

Many of these good-paying jobs would be created in the South Dakota’s southeastern Union County. According to the state’s labor department, as of January 2009, Union County 7,815 South Dakotans were employed. Potentially, this energy investment could provide an employment uptick of more than 50 percent in Union County alone.

However, there are legislative threats looming in Washington that could dramatically hinder – if not outright eliminate – these jobs and the untold billions in economic growth and revenues. The policy in question is the Low-Carbon Fuel Standard, and if implemented, it would have the effect of banning Canadian energy supplies from crossing the U.S. border. Worse still is that it has the support of President Obama, and other powerful member of Congress, including South Dakota’s senior U.S. senator Tim Johnson.

In a column last January, U.S. Sen. Tim Johnson wrote this:

It is important that Congress support the continued development of low carbon renewable fuels because in the United States, the transportation sector accounts for approximately 25 percent of greenhouse gas emissions. Replacing high carbon content oil with low carbon renewable fuels must fit within an economy-wide plan to reduce carbon dioxide emissions. This means adopting a low carbon fuels standard and transitioning to a fuels policy based on its carbon content.

We have to act prudently so that any new policy does not pick winners and losers and remains technology neutral in developing biofuels.

So, given the “massive economic impact” that South Dakota stands to gain from its new, pending energy refinery, Sen. Johnson should, at the very least, clarify his position for a policy that could undercut these jobs and energy security advancements. We know where China is on the issue of Canadian energy, shouldn’t we know where our elected officials are too?

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