New South Dakota Refinery

[shamaal]

Personally I don't think this will get built, I'm not convinced the economics are there. The pipeline feeding it won't be completed until 2009. But Hyperion thinks they have somethin; we'll see.

By a solid 58 percent to 42 percent margin, county voters approved Hyperion's request to rezone 3,292 acres of farm land for a new classification, Energy Center Planned Development.

"What happened tonight, we were not supposed to be able to do," Phillips told a cheering audience. "Development projects like this are supposed to be outright rejected by residents and neighbors. But this project is a testament to our balancing the needs for growth and for protecting the environment."

At stake was billions of dollars in capital investment and thousands of high-paying jobs. From the beginning, Hyperion executives said they would abandon its Union County site, just north of Elk Point, if a majority of voters failed to give their blessing to the rezoning.

While conceding defeat, opponents vowed to keep fighting the controversial project on every imaginable front, pressing on with a lawsuit it filed against the county over the zoning procedures and opposing Hyperion as it applies for a bevy of state and federal permits.

"We have strategies in place to slow or delay all the permit processes," Ed Cable, chairman of the anti-Hyperion group Save Union County, said after the vote.

Tuesday's historic election culminated a months-long, emotionally charged campaign that pitted neighbor against neighbor in this extreme southeast South Dakota county.

Upstreamonline - Canada-US link gets green light

[glfredrick]

The bigger question for me is why oppose it. I'd lay odds that the SAME people opposing this project are the ones also giving President Bush the shaft for not "doing something about the fuel costs."

[Rick]

I doubt it. The ones who oppose it are most likely enviro-extremists who make a lot of noise, but don't represent the majority of any political group. This group wouldn't give a crap about our high gas prices, in fact they encourage high prices to reduce demand.

Extremists from either side of the spectrum are

[glfredrick]

Originally Posted by Rick

I doubt it. The ones who oppose it are most likely enviro-extremists who make a lot of noise, but don't represent the majority of any political group. This group wouldn't give a crap about our high gas prices, in fact they encourage high prices to reduce demand.

Extremists from either side of the spectrum are

So, the people giving Bush the shaft about oil prices are more like you...

[shamaal]

Shoot, posted wrong link.

Sioux City Journal: Union County approves zoning ordinance for Hyperion

According to the article, the rural folk and those who live next to it voted against it. Luckily the absentee ballots won the day. That is those who don't live there are all for it.

When are those country bumkins going to learn that us city folk and our government know what's best for them?

Opponents argued the massive development would not be worth the pollution and other troubles they claimed the refinery would bring. The health risks traditionally associated with a refinery weighed heavily on the minds of some voters.

"I live out here. I don't need the pollution," said Jim Schroeder of McCook Lake, after voting against the rezoning.

The contentious issue largely broke along urban and rural lines, with residents living the closest to the Hyperion site fighting the hardest to keep the refinery out of their backyards.

Tuesday's record turnout largely reflected that split, with early returns from the mostly rural precincts putting the "No" votes squarely in the lead. As votes were tallied in the more populated area, particularly in the southeast tier closest to Sioux City, that lead was slowly erased.

The ordinance took a slim 205-vote lead after 11 of the 13 precincts reported. Hyperion supporters declared victory after the Elk Point precinct results came in, increasing the rezoning lead by 150 votes.

Last to report was voter-rich Dakota Dunes, where an unusually large number of absentee ballots slowed the counting. In the Dunes, the ordinance easily passed, 1,017 to 236 votes.

[glfredrick]

Again, the big question is why we cannot build any refineries when people everywhere are screaming for better prices on their fuel.

Perhaps they've been seriously mislead by political candidates that PROMISE alternative technologies if they only can get elected and chase that evil energy-grubbing GWB out of office?

What a let down that will be... Like there are actually viable alternative technologies within reach of Joe Average within the next 4 years...

[Rick]

Why couldn't Bush push to get a refinery built while his ratings were at their peak? Maybe his buddies don't want to build any new refineries during what many believe to be the peak of oil production? All they have to do is ride out the storm with what they have, and they stand to pocket billions they would otherwise have spent on new refineries.

[glfredrick]

Maybe they all got shot down by leftist enviromental groups or laws put in place before his presidency (that seemed to happen a bit -- I recall all the forest fires that were caused by Clinton's no access executive orders)?

I seriously doubt that it was purely financially driven as you SO often surmise. Show me some actual proof -- not just rants.

[Rick]

Show me some actual proof -- not just rants.

On some matters we have to make educated guesses. For example, your rants about a supernatural God which you strongly believe in, but have no concrete proof to back them up with

[shamaal]

There's a reason that the oil people say they do not want to build new refineries, they are financial disasters and have been for sale for over a year. As high as it is, the price of gas has not risen as sharply as that of oil, profit margins are miserable. A couple years ago, refineries were goldmines. This year you can't give them away. It really is about finance and capitalism.

[rookieshooter]

shamall, why are they financial disasters? Seems to me we need more. I think you live in an area that has plenty of refineries. Don't they bring income and job securities to that area?

[Rick]

Don't they bring income and job securities to that area?

Since when do the big oil companies care about that? They care about their bottom line and making money for stock holders. If that means lay offs and no refineries, so be it... It's about the company, not the economy, or the nations best interests. At least that's the way I see it...

[shamaal]

Originally Posted by rookieshooter

shamall, why are they financial disasters? Seems to me we need more. I think you live in an area that has plenty of refineries. Don't they bring income and job securities to that area?

Rick, in his inimitable way has hit it on the head. This is about profits and more importantly from a management level profit margins.

To put it bluntly the price of gasoline has not kept pace with the price of oil. Production margins which at this time last year reached 30% in refining have dropped to 15% this year; and that's an average. For the majors which produce their own oil and use their own refineries the risk can be spread across operations. For the independents the effects are devestating, many are are operating at points where they are near losing money on each gallon they produce; government subsidies are all that's keeping them afloat. US consumption has gone down, refining capacity has declined from 89% to 85% and may decline even further.

Of course the majors are not slow to take advantage of this situation and are keeping up the pressure in an effort to squeeze the smaller refineries out of business. Nationalistic aspirations to hobble the American oil industry are in play as well. I attribute the majority of the decline to the 25% inflation rate of the US dollar and unbridled demand. The administration's role in this fiasco would be the subject of another thread.

That's the short story with generalizations. There's a thousand legitimate ways to make money in oil, with a zillion guys doing it. Let me tkae us one-step lower into the refinery business. Just as a measurrement of the stock market is the Dow Jones Industrial Average, in the rfinery business a common indicator is the NYMEX 321 crack spread this gives an indication of the spread between what refiners pay for supply and how much they make per barrel. Out of their cost they must pay their expenses. Looking at the first chart around mid year of 2007 the refineries were making $28/bbl of oil - that's good. Again remember this is the gross amount the refineries made - not to be confused with profit which is what's left after they deduct their expenses; but it was still healthy. Contrast with January of '08 - a spread of $7.75

Now, there are those who will notice that the prices are seasonal and they are correct. For the last six months, see the second chart.; I apologize but the charts similar to the previous ones are not available until June 11th and I'm too cheap to subscribe to the Oil & Gas Journal.

The second chart is more detailed. On the left is the crack spread scale, on the right is the trading price for a barrel of oil (this applies only to the black line). The other colored lines are the US refinery locations crack spreads. The difference between the (cost of oil) and the crack price (amount the refiner makes) is the profit margin. It is abysmal. Remember company management looks at profit margins, not necessarily profits.

OK , that was a quick look at a complex situation. One can see esily that by cherry picking the data and looking at specific dates one can make any case one's special interest group desires to make. The stats are that the numbers of refineries have declined since deregulation in 1975, and it isn't because of the evironmentalists. Look at the amounts the Wesy Coast refineries make per bbl of oil - $60, granted their costs are higher - but not that much. They spend a lot of money supporting environmental and activist groups to reduce competition.

For further inf look up crack spread on wikipedia for a reasonable overview on the topic.