Energy Synergy -- a.k.a. "You Scratch My Back..."

KELO reports this morning that Hyperion's chief exec Albert Huddleston is saying the Transcanada Keystone Pipeline is (in the report's words) "the main reason for considering" Elk Point for Hyperion's new refinery (AP, "Pipeline Is Key to Refinery Project," KELOLand.com, 2007.09.20).

Wait a minute -- that's not we were hearing this summer. Consider:

1. From Josh Verges, "'Gorilla' Revealed: Dallas Company Plans to Build Oil Refinery," Argus Leader, 2007.06.14:

   "Hyperion plans to pipe in crude oil from Canada, but how they'd do it is uncertain.
   
   A Canadian firm, TransCanada, is planning a pipeline that would move 435,000 barrels of crude oil per day under South Dakota by 2009. Trans-Canada spokesman Jeff Rauh said Wednesday that the pipeline is not related to Hyperion, and the two companies have not met.
   
   

   He did say TransCanada always is looking for new customers and could expand its daily volume to 590,000 barrels. Rauh said a spur line of 30 miles or so to meet Hyperion's refinery would be possible.
   
   [Hyperion spokesman Preston] Phillips said Hyperion might want to join forces with Trans-Canada, but in the alternative, the refinery is a big enough project to merit "its own dedicated pipeline."
   
   

2. See also content similar to above from Ben Dunsmoor, "Transcanada Pipeline Not Connected to Hyperion," KELOLand.com, 2007.06.15.
   
   
3. From Loren G. Flaugh, Primghar, Iowa, "Elk Point Refinery Unfeasible," letter to the editor, Argus Leader, 2007.07.12:
   
   

   I was at the South Dakota Public Utilities Commission hearing in Yankton. I clearly heard TransCanada officials say there was no conspiracy, collusion, connection or relationship between TransCanada and Hyperion Resources. That was simply inadvertent speculation brought on by the Sioux Falls and Sioux City area television and print news media.
   
   

4. From Ray Tyson, "'Gorilla' Project Unveiled," Petroleum News, 2007.06.24:
   
   

   Though Hyperion says the company plans to use Canadian oil for feedstock, it’s unclear just how Hyperion would actually tap into the resource, with no third-party pipeline system in the immediate area of Elk Point to transport the product to market. Reportedly, a Hyperion representative said the project is of sufficient size to build and operate its own pipeline.
   
   He also said that if needed, undisclosed pipeline operators told Hyperion that a bullet line could be constructed from Alberta, Canada, to the Gorilla refinery.
   
   However, Hyperion spokesman Eric Williams reportedly said that neither Marathon nor TransCanada has any involvement in the refinery plan. But he said that in addition to Frank, the Hyperion refinery team includes two other former Marathon executives: Carl Clay, a former president of Marathon Pipe Line Co.; and Dick White, a former senior vice president of marketing for Marathon.

When big companies start changing their public message, something is up. Maybe Hyperion and Transcanada are sensing some growing opposition to their plans and are trying to create a little PR synergy. Hyperion now says Transcanada's pipeline (now thinner than ever!) is key to its plans, and that helps Transcanada sell its project to the PUC and neighboring landowners. Or maybe Hyperion makes these comments about Transcanada to quell doubts about how Hyperion would get the oil it needs for an Elk Point refinery. Ease doubts, convince investors that a whole 'nother company will eat the cost of building all but 40 miles of the pipeline necessary to get oil from Canada to Elk Point, and watch the stock price go up. Clever.

This is all speculation, but leaving us common folk to speculate has been par for the course for Hyperion. Finding out anything from Hyperion itself is pretty tough online: the company website is open to authorized users only; I had to use ZoomInfo's cached pages just to get the official Hyperion bio of CEO Huddleston. Hyperion doesn't exactly give that warm fuzzy feeling of openness (no wonder they get along so well with Governor Rounds). Combine that penchant for secrecy with the now changing public story, and you have godd reason to be suspicious of Hyperion's intentions.

Fortunately, both Huddleston and Rounds will be on South Dakota Public Television's South Dakota Focus tonight. Let's not waste Mr. Huddleston's time with silly questions about his big campaign contributions to George W. Bush, John Thune, Stephanie Herseth's husband Max Sandlin, and the Swift Boat Veterans for Truth; let's ask just what the connection is between Hyperion and Transcanada. Maybe with the bright light of public attention to focus his thoughts, Mr. Huddleston can settle on one story so we know just what oily devil our governor wants us to jump into bed with.