Friday, February 19, 2010

Who Loves Ya Baby?

<$BlogMetaData$>February 24th, 2010

“Who Loves Ya Baby?”

After reading the many responses to Letters to the Editor, especially on the letter submitted by Dale Harkness, in the SCJ, Argus Leader and the Akron Hometowner, I decided my article this week needs to also address this issue. I just cannot believe the responses some people wrote. It is like people opposed to the refinery are ogres.

How many jobs will be LOST not gained because of the refinery? Dale Harkness wrote in his article last week that not only will there be a loss of income, but associated jobs geared to the agricultural industry will be lost. He estimated that over $800,000 of income that is brought home to this area will be lost to local businesses. (Versus income that will go back to Texas). He mentioned that many small industries associated with farming like implement stores, fertilizer companies, seed companies and many others will either close or cut back on employment because of the volume of business lost. These are jobs now held by our own people. This is income to our own people. This is the lives of our own people. This is the land of our own people. Five square miles of the richest most fertile land in south Dakota.You might not think that 3,000 acres is very much, but think of how much equipment, seed, fertilizer and fuel is used by the farmers during the year to bring home that harvest. We are talking about money here, lots of money. Lots of our money, not Texas money.

This is something I don’t think anyone dwells on. All we hear is the economic development (you know what I think about this phrase) that will come. What about the economic development we already have? If my figures are correct the unemployment rate even with the closing of Load King, which will soon reopen is below 4%. That is lower than anywhere else in the state. I can’t figure it out. Where did we go wrong here that people think the refinery is our savior from mass poverty? Do people actually think this is really a godsend? Let’s get real here folks. This is borderline lunacy. If this is such a big deal why did someone wait 30 years to do this? Tar sands have been mined in Canada for 30 years. This isn’t like the light bulbs just turned on you know. Why didn’t the BIG GUYS do this right in Canada? Why let some nobody come in here and stir this up? Until December of 2007 who ever heard of a company called Hyperion? If people want to work for the refinery so bad, go to where the refinery is, then have them call or write back how wonderful it is. . It won’t be a long letter, probably a post card. Think about it? The transients who come here won’t be spending their money here; they will be sending it home. What’s good for the goose is good for the gander.

What is it going to cost us to prepare for the refinery? In the refinery’s application they say that they expect the county to build the roads and maintain them. If Hyperion wants to come here so bad, let them build the roads. Building a road isn’t something that is done overnight. It might take a year or even 2 years to build it. And I’m sure Hyperion wants it done yesterday. We are in the midst of recovering from a near depression, and money is tight. I know for a fact that Union County doesn’t have the money, yet the townships are going to be responsible for building roads keeping them up. There is a bill in the state legislature right now today (HB 1227) that says that responsibility for road maintenance on township roads cannot be abandon by the townships for any secondary road that has received funds pursuant to SDCL 32-11-6 without permission of the county board of commissioners. This includes blading, application of gravel, and snow removal. Do you suppose Hyperion had some influence in that bill being presented? Or is it the state making sure the responsibility is shifted to the townships? Not only are we working against our own county we are working against the state. We cannot let this happen, and that is why I’m running for Commissioner. “Who loves ya Baby?”

Sunday, February 14, 2010

You can't push a rope up a hill

<$BlogMetaData$>February 17th, 2010

You can’t push a rope up a hill.

Last Friday’s Yankton’s Press & Dakotan had a story in the business section of the business leader’s annual trip to Pierre. Of course they met with our illustrious governor and he was slobbering the Hyperion smoothies. He said some construction is expected to begin during 2011, but the heavy lifting won’t start till 2012.

Oh come on now. Let’s get real. He also said – now get this – “their business plan appears to be solid yet.” “I’d just as soon have it being done here and have the citizens of South Dakota be able to take advantage of part of the huge economic impact it has. I think Yankton will benefit from that, as well.” Have you ever heard such baloney in your life? Makes me want to throw up – again – Doesn’t anyone think about anything but economic development? I’m so sick of hearing “ECONOMIC DEVELOPMENT.”

Coincidentally I got a response last week from the governor to an email that I sent him after his remarks in Yankton two weeks earlier. He had mentioned that the developer would start construction in 2012 and I had asked him who the developer was. Are you ready for this? He said the developer was Hyperion. He said that Hyperion was also focusing on two other parallel tracks. They range from obtaining additional permits and consents to local building permits and permits to discharge treated water. On the other track the project is working to further secure a crude oil supply. Now there must be something in the air out in Pierre because he’s losing it. When I was in the Air Force, they called it wacky tabacky!

It might be a solid waste plan, but business plan it isn’t. Evidently neither the governor nor his staff read the papers and industry releases. Here are portions of a business release from Canada’s Globe and Mail this week about tar sands, which is going to be Hyperion’s oil supply.

1) The uncertain future for tar sands was brought more sharply into focus when it emerged that Suncor and Imperial Oil (60% owned by Exxon Mobile) are appealing to a US regulator to force Enbridge to hold back on increasing pipeline tolls from Canada because they say Enbridge is building too much pipeline capacity for tar sands oil into the U.S.

2) TransCanada’s Keystone XL pipeline proposal, which is slated to bring 500,000 b/d of tar sands crude to the Gulf Coast by 2013, will result in around 41% excess capacity in Canada-US pipeline systems, according to the G&M article. That means that on top of paying some of the most expensive capital costs in the oil industry to pull tar sands crude out of the ground, producers will be paying a premium to get it to refineries, while refineries will be paying the extra costs of processing the heavy sour crude into products that are decreasingly in demand.

3) The problem as the oil producers see it, is that since they signed up for Clipper back in 2007, the outlook for tar sands has deteriorated sharply and they are unsure how much tar sands crude they will have available to pump through Enbridge’s new line. The contract between Enbridge and oil producers guarantees Enbridge revenue making it more expensive for oil producers to use only a portion of their allotted capacity. Suncor’s filing to the US regulator stated that, “Shippers are not required to pay for a pipeline that did not need to be placed into service”.

4) “We're planning for startup in 2013, and one of the things we have to do is secure the feedstock, so we're making a proposal to the Alberta government to process their bitumen royalty volumes," said Ian MacGregor, chairman of North West. If all the pieces fall into place, construction could start in 2011, Mr. MacGregor said. The companies gave no cost estimate for the plant, which is designed to turn extra-heavy crude into low-sulfur diesel fuel and other petroleum products. North West had previously said the plant would process 231,000 barrels a day, starting with a 70,000-barrel-a-day phase costing about $4-billion. That capacity is made up of 50,000 of raw bitumen and the rest light fuel used to move the crude in pipelines.

5) North West deferred construction plans as the credit crisis took hold in 2008. It said last year that the Alberta government's bitumen-in-kind proposal had the potential to put the project back on track. --Canadian Natural Resources Ltd., the country's biggest independent oil explorer, is buying into a multibillion-dollar upgrading plant that was stalled by the financial crisis, the latest in a raft of announcements showing the oil-sands sector on the rebound. Canadian Natural said it will buy 50% of privately held North West Upgrading Inc., which plans to build an upgrader near Edmonton for an undisclosed sum.

6) The two companies will apply to take advantage of an Alberta program aimed at stimulating processing of its vast oil sands within the province, rather than shipping the resources and jobs elsewhere. They hope the government will supply 75%, or 37,500 barrels a day, of the raw bitumen for the plant from volumes it will take in from developers in lieu of cash royalties. Canadian Natural, one of Alberta's largest producers of heavy oil and oil sands, would supply the rest

If one reads just the 6 sub topics I’ve listed you have to shake your head and wonder what the Governor, Hyperion and pro Hyperion folks thinking. They can’t contract for something that isn’t there can they? I mean how stupid do they think we are? I’ve always hears that if you are going to dream, dream big ones, but come on now. I think it is time for them to do a reality check don’t you?

North West says it will cost $4 billion just to produce 70,000 barrels a day. If it costs this much to produce 70,000 b/d what is it going to cost for 400,000 b/d and who is going to pay it? There isn’t anyone that will be producing 400,000 barrels a day so where does Hyperion think they are going to get all the tar sands. North West is going into partnership do develop tar sands in Canada so it won’t be outsourced and they will keep money in Canada. Even with the start up in 2013 it will be several years before they come online. I just can’t figure this out any more. The figures and the dates don’t match, so Hyperion is trying to push a rope uphill.

Sunday, February 7, 2010

Sneaky Bastards

<$BlogMetaData$>February 10th, 2010

Sneaky Bastards

There is an old saying that you never turn your back on your enemy because he is liable to do something really sneaky. Guess what folks? Those sneaky bastards are pulling a fast one.

if you will remember, when the refinery submitted its initial application to the state it said that they will be using 10-12 million gallons a day at the refinery for cooling etc. well, it seems that there is a law on the books in the state of South Dakota that if you use more than 10,000 acre feet of water a year this process must be taken through the state legislature for approval. That means that the refinery would be using around 13-14,000 acre feet of water a year if their usage would be in the 10-12 millions gallon a day range, therefore their operation would come under the scrutiny of the legislature. So now they have revised their estimate to avoid having to deal with the state legislature. It seems they overestimated the amount they will be using and are now only going to be using 9 million gallons a day. This relates to using 10,000 acre feet during the year, hence avoiding the necessity of having this controlled or regulated by the state. What a bunch of baloney (crap). I thought I would never be amazed at what they can do, but I guess that isn’t so. Sneaky Bastards.

This is the same thing they are saying they are going to do with the power plant. There is a regulation in the state that if the output of a power plant is more than 200MW that the plant comes under the control of the PUC. Guess what? The power plant that they intend to build will only be a 200MW facility and they will purchase 50MW off the grid. They could build a 350MW plant or bigger if they wanted to, but to avoid having to deal with the PUC they limit the size to 200MW. What does this tell you? It tells me we are dealing with a bunch of sneaky bastards that’s what it tells me. And the governor wants to be doing business in this part of the state. No thank you! I think the refinery said something at the beginning of this whole dirty rotten ordeal that they would be ‘transparent’. They are transparent all right, we can see right through them. It’s too bad the governor, the planning and zoning and the county commissioners couldn’t.

Between Mr. Al Huddleston and Governor Rounds, they are going to bankrupt this state. Mr. Huddleston’s (Al) success record is a big fat zero in regards to successful business ventures. I have been writing this for over 2 years so I’m sure everyone is well aware of his successes and failures. In last Monday’s Argus was a letter in the ‘voice of the people’ section. It was an eye opening letter and I want to list just part of it.

Governor rounds invested $3.2 million dollars of state money for land to expand the Battle Mountain Game Preserve. The purpose of this was to make a paradise for “Elk Hunters”. The net result one or two elk per year. Hoo-Rah!

Rounds honored development of the Southern Hills Golf Course. The developer went to jail for unpaid state taxes and overbilled expenses. City taxpayers now are paying $75,000 per year on the golf course.

The Governor provided a $450,000 grant to Hot Springs for a new log library. The design was not followed and roofing tiles are breaking and many of the logs are undersized and substandard. Do you see a trend here folks? Do you see where I’m going with this?

Hyperion wants to build a $4 - $10 Billion dollar oil refinery in Union County. Hidden in Hyperion’s application on page 83 or 84 of their180 page initial application is a one paragraph statement about taxes. Hyperion says that they will be paying $180 Million dollars in the 2% excise tax for the cost of building a refinery and they say of course they expect the (normal) refund of $162 million because they are a new company developing an energy center in South Dakota, and they are entitled to this refund under South Dakota state law. So the state would retain only $18 million of the money. Now bear in mind that Union County agreed to this, not the state so can the county speak for the state or does this have to be legislated? Hm-m-m-m-m-m.

Oh I forgot. Hyperion wanted to have CRWS build the water system at a cost of $40 million, so does that mean another $800,000 in refunds for Hyperion because CRWS could see that this was not a good deal and turned them down. (Thank you CRWS) Everybody is getting refunds around here and we are going to get stuck with a big bill. Don’t forget that the Secretary of Transportation Bende was going to LEND the county $3 million to improve the township roads to enable big equipment and trucks to enter and leave the facility. The money has to be paid back in 3 installments of $333,000 in 3 years. Still don’t know where the townships are going to get that money. When I said this venture was going to bankrupt us, I wasn’t kidding.