A five-year-old regulatory and legal fight over a $10 billion oil refinery planned for rural Union County goes before South Dakota's highest court this week.By: Dave DreeszenSioux City JournalSeptember 30, 2012
The state Supreme Court will hear oral arguments Wednesday in a protracted case of a state air quality permit for the Hyperion Energy Center.
Here are nine key questions about the case, the players and the hearing, which begins at 10 a.m. in the Jeschke Fine Arts Center on the University of Sioux Falls campus.
Q: Is the hearing open to the public?
A: Yes. In fact, a large number of Union County residents supporting or opposing the project are expected to make the relatively short drive to Sioux Falls to watch the proceedings.
Meredith Auditorium in the Jeschke Fine Arts Center seats about 600 people, so there should be plenty of room for a large crowd. But those planning to attend are advised to arrive well before the high court begins hearing its first case of the day at 9 a.m. One reason is that all spectators are required to go through security before entering the hearing room.
Q: What's the case about?
A: Hyperion's Prevention of Significant Deterioration Air Quality permit has been tied up in regulatory and legal challenges since the Dallas, Texas-based company applied for it in December 2007. The permit, which would regulate contaminants the 400,000-barrel-per-day refinery and adjacent power plant would emit into the ambient air, must be in place before construction begins.
After the South Dakota Board of Environment and Natural Resources granted the permit in August 2009, three groups opposed to the controversial project, the Sierra Club, Save Union County and Citizens Opposed to Oil Pollution, challenged the decision in state circuit court.
In February, Circuit Court Judge Mark Barnett ruled the state Board of Minerals and Environment did not make any mistakes in granting the permit, prompting the opposition groups to appeal the ruling to the state Supreme Court.
Q: On what grounds is the case being appealed?
A: Attorneys for the opposition group are making three main arguments.
First, they contend the state Department of Environment and Natural Resources erred by not ordering a full-blown environmental impact study for the project before issuing the permit.
The opposition groups also argue the air quality permit is invalid because Hyperion failed to start construction by the state's original February 2011 construction deadline,
In approving a revised permit last September, the Minerals Board granted Hyperion an 18-month extension, until March 2013.
"We believe the permit issued by the DENR and the board is formally and legally no longer in effect because it expired before (Hyperion) requested the extension," said Ed Cable, a spokesman for the opposition groups. "If we lose that argument, the third issue is that Hyperion did not properly present the factual information required to justify granting an extension."
Q: Who will hear the appeals?
A: Chief Justice David Gilbertson and Associate Justices John Konenkamp, Steven Zinter, Glen Severson and Lori Wilbur.
All the justices were appointed by Republican governors and represent different districts across the state. They face nonpolitical retention election three years after their appointment and every eight years after that.
Wilbur, an alumna of the University of South Dakota in Vermillion, represents the fourth Supreme Court District, which covers the bulk of Southeast South Dakota, including Union County.
Q: Who will argue the case before the high court?
A: Robert Graham, a partner in the Chicago-based law firm Jenner & Block, is the lead attorney for the three opposition groups.
Hyperion's lead attorney is Rick Addison, a shareholder in the Dallas-based firm of Munsch, Hardt, Kopf & Harr.
Chief deputy attorney general Charles McGuigan and deputy attorney general Roxanne Giedd will represent the Minerals Board and DENR.
Q: How much time will each side have to make its case?
A: The hearing is scheduled to last about 50 minutes, said Greg Sattizahn, a spokesman for the South Dakota Unified Judicial System.
Attorneys for the opposition groups will make their oral arguments during the first 20 minutes. Attorneys for Hyperion and the state Attorney General's Office will divide up the next 20 minutes, Sattizhan said. The opponents will have the final 10 minutes for rebuttals.
The justices may ask questions during each block of time.
Q: When will the Supreme Court rule on the case?
A: The timing is uncertain, but most observers believe it could be a few months.
After the oral arguments, the five justices will confer and take a vote, Sattizhan said. They will then decide who is going to write the majority opinion and, if there are any dissenters, the minority opinion.
Q: Can the losing side appeal the decision?
A: No. The high court has the final say on the state-issued permit, according to legal experts. However, Hyperion opponents have vowed to continue to take other legal avenues to fight the project, regardless of the ruling on the permit.
Q: Didn't Hyperion also appeal the air quality permit to the Supreme Court?
A: Yes. The company filed a more limited appeal that challenges whether limits the DENR placed on carbon monoxide emissions from the refinery's process heaters are technically practical.
The court had originally agreed to also hold oral arguments on Hyperion's appeal Wednesday, but the hearing was canceled last week. The case will now be considered on legal briefs not argued before the court.