Maybe South Dakota Could Use That Refinery After All...

The prospect of a big refinery down by Elk Point hasn't caught the fancy of this blog just yet. A big corporation buying up land, pressuring folks to sell, squeezing family farms out of the area, bringing the risk of pollution, making South Dakota's economy more dependent on Big Oil, bringing its lobbyists to Pierre to put the permanent stamp of petrodollars on our politics... a giant industrial project of this sort will bring all sorts of impacts that the good folks around Elk Point and the entire state must weigh against the apparent benefits of more jobs and revenue.

But then comes the news that BP (that's British Petroleum, using its initials so we colonials don't throw their gas station coffee mugs in the Jim River) is pulling out of "most of South Dakota and all of North Dakota, Wyoming, Lousiana, and Texas" (KELOLand.com wakes me up to the issue; the Bismarck Tribune runs a more complete version of the AP report: no author cited, "BP America All But Leaving Dakotas," BismarckTribune.com, 2007.09.16].

Why is BP leaving? AP reports the company has decided "to focus on areas closer to its refineries." In the entire SD/ND/WY area, only Sioux Falls will keep BP sellers, since "the city is close enough to an Indiana refinery."

So we lose one supplier... no big deal, right? Maybe BP just needs to cut costs to pay its lawyer bills. But BP is the second supplier to leave the South Dakota market this year: the AP report notes that ConocoPhillips left the state last month. Two may not make a trend, but the withdrawal of two suppliers from an already small market would suggest a decrease in competition and maybe even supply, both of which should result in higher prices.

If the oil industry is starting to find doing business in South Dakota not worth the effort, South Dakota could find itself in a tight spot. We have pinned much of economic growth to big oil and transportation. If service stations can't get gas, or if a shrinking number of suppliers leads to ever-higher prices, towns that rely on Sioux Falls commuters for residents and property tax revenue, like Harrisburg, Tea, and Dell Rapids, will find their growth unsustainable.

Faced with that economic squeeze, we may have to embrace the Hyperion refinery in Elk Point, assuming it plans to sell its products here in our market rather than trucking or piping it all to bigger urban markets. We may also want Transcanada to hurry up and build the Keystone Pipeline through eastern South Dakota. (Maybe we can encourage Transcanada to build with even thinner steel pipe—then it would be easier for us to sneak out to the pipeline, drill a few holes, and siphon a little black gold for our own local use!) Despite the growing questions about whether that the push for biofuels is forcing up food prices, we may have to embrace the ethanol and biodiesel industries all the more and push them to vertically integrate: instead of shipping their products to Big Oil refiners for final processing and distribution, Dakota Ethanol and other South Dakota biofuel plants ought to create their own retail network and sell their product directly to local consumers.

We should keep South Dakota as clean and green as possible. More people need to bike to work (like the mighty Kevin Brady of Vermillion, who has ridden to work 131 consecutive days... and counting!), combine trips, and urge the boss to allow some telecommuting. But folks still need to get to work, and we can't ask road workers to pedal out to the job site from Chamberlain to Murdo, or ask physicists from SDSU to bike out to the Homestake Lab. The Madville Times will continue to advocate conservation (as should anyone claiming the label "conservative"), but even that principle must be balanced with practical realities.

What's worse: the quality-of-life impacts of noisy and polluting refineries and unsightly and potentially breachable pipelines owned by foreign companies, or the quality-of-life impacts of more expensive gasoline and fewer economic choices? This morning, the Madville Times will not pretend to have a final answer. We only know we South Dakotans have a lot of hard study and discussion ahead of us.