Monday, June 15, 2009

The Calm before the storm

May 20th, 2009
The Calm before the storm

Well, here we sit awaiting the decision. The disputed hearing started in Pierre yesterday. The Board of Minerals and Water is going to decide not whether or not Hyperion should build a refinery, but if they are going to build it within the guidelines that the state DENR says it has to be built. If you have been following the actions of DENR in the past, you know what is going to happen.

What ever happened to the days when government was concerned about people’s health and welfare? It is simply amazing what the dollar can do to influence decisions that before would have been unthinkable

I am a natural born pessimist. My gut feeling is that this refinery is never going to be built because Hyperion is saying that they are going to build something that has never been built, and something they don’t know how to build, A “Green” refinery. Now think about this for a minute. How many multi-million, multi-billion dollar oil companies are there in the United States? There must be twenty or thirty. Where does Hyperion rank in these twenty or thirty oil companies? They are not even on the chart because they are not even an oil company. They are a real estate development company. Yet here they are saying they are going to build the first green refinery built in the United States since 1976. They are way out of their league here. if this were something that could be done, you can be rest assured it would be someone who has the money to do it, not someone like Hyperion, And here we are getting totally bent out of shape because we fear what they say they can do.

One has to ask themselves just where they expect to obtain funding for an undertaking that is far, far above their heads. I know there is the old saying “if you’re going to dream, dream big.” But this is absolutely ludicrous. This is absolute folly. If they are doing anything, they are acting as an agent or go-between for some company that is flying under the radar, so to speak. It has to be a company that is going to cause a firestorm when it comes out who they are. We still have to face the fact that this might not be a refinery at all, although I can’t see why they would go through the permitting process if it isn’t a refinery.

One has to ask themselves whether or not they are they making promises they can’t possibly fulfill. If you take the time to research the two things they say they can do but is not economically feasible is the fact that commercial application of IGCC and Carbon Capture is a very expensive operation. Hyperion is going to operate as cheaply as fiscally possible to show the greatest margin of profit. You have to remember that they don’t say they will build a facility that will operate under IGCC; they say they will build a facility that will be IGCC capable. There is a big difference. In fact it is a huge difference.

To me this is nothing more than a setup for failure, unless of course they are fronting for a controversial sale of their venture. They would have to do a complete makeover just in the management structure of the organization. Here is a company with less than 100 employees suddenly in charge of thousands. The only way this could possibly happen is to have a general contractor that is large enough to handle building a refinery. I have mentioned this in past articles, but after researching this, it once again comes down to Fluor Enterprises. This is an all in one company that has the capacity to do a project as large as this one is. This will be a logistical nightmare. One has to arrange pipelines, oil, gas and water. Build a railroad, build roads, pave the refinery area, and get permits, on and on and on.

What I can’t figure out about all this is why Hyperion doesn’t admit they are not capable of doing this but have joined with someone like Fluor to do this. Hyperion knows they are not capable of doing this on their own, so why don’t they just come out and say they have contracted with Fluor to do this. There is an old saying in the military or for any large business for that matter that for every person on the line there are 8 support personnel behind them. Again, this comes back to “Transparency.” Is it because Fluor will make more out of this initially than Hyperion and they don’t want this to happen or is it inexperience on their part that they think bigger than they are?

I think Hyperion is banking on the idea that the air permit is going to be approved and then they can announce everything at one time. One thing that hasn’t been answered is how long can Hyperion wait to announce what they intend to do. If you remember a few articles back, I asked Preston Phillips why they just don’t come out and announce that Elk Point is the “anointed” site for this and he said, “Because the air permit has not been approved.” So here we are, waiting like someone waiting for the executioner to decide when to let the axe fall. It is really going to be interesting to see what happens this week in Pierre. Is anyone taking a bet on the outcome?


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