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Friday, January 29, 2010

Clay Rural Water Says No to Hyperion

I went to bed last night with an extra spring in my snore: Rebecca Terk of Flying Tomato Farms had just broken the news that Clay Rural Water System voted unanimously to reject Hyperion's request that CRWS supply up to 12 million gallons of water per day to Hyperion's proposed oil refinery near Elk Point. Supplying Hyperion would have required CRWS to tentuple its current 1.2 million gallon/day capacity. The dealbreaker, however, was Hyperion's Wimpy request that CRWS pay for the new water infrastructure today, with the promise that Hyperion would pay them back several Tuesdays from now.

Clay Rural Water's vote is an encouraging sign that not all South Dakotans can be driven to crazy, unsustainable actions by the wild promises of Big Oil. But it does not leave Hyperion high and dry. CRWS's nay may actually be just what Hyperion wanted. Hyperion didn't bother to send a rep to last night's meeting. The company actually provided CRWS with a model "Form of Intent Not to Serve"—when a corporation pays its lawyers to take time to write up a legal document for you, beware.

The denial statement, adopted by the CRWS board, says CRWS consents to Hyperion seeking water from other suppliers. This negates the possibility that CRWS could use federal regs to stop other suppliers from seeking Hyperion's water business. It could well be that Hyperion knew all along that CRWS lacked the resources to become a heavy industrial water supplier and just wanted to play a little CYA before it went seeking a biger aquifer-draining supplier.

But for now, Clay Rural Water customers can be happy that they won't experience a sudden drop in pressure in the shower if the Hyperion refinery ever fires up.


  1. Based on what I saw at a Clay Rural Water Board meeting last year, I don't think Hyperion had a master plan all along to NOT get water there. The Board gave every indication of seriously thinking about it.

    I wouldn't read all that much into Hyperion not sending anyone to the meeting last night. They were essentially asking Clay Rural Water System for a loan for their project (i.e., the money required for the new water infrastructure). In this economy, Hyperion is probably pretty used to people telling them "no" when they ask for money.

    It's also common for developers to have a fairly good idea of which way the vote is going to go before the actual meeting. (Speaking generally here. I don't know whether Clay Rural Water board members or staff were communicating with Hyperion outside meetings and official letters.)

  2. this was a moral booster for those opposed to hyperion. they already had their minds made up, but because they borrow federal money they had to go through the formalaties of saying no. even though, we received a 'warm fuzzy' by them voting no.

    hyperion let 6000 acres go last summer and if they don't find a buyer or investor they will release the rest of the land this summer. with money on the rail, investor capital is slim and none. valero closed a 220,000 bpd operation in the 4th quarter of '09. it is cheaper to buy that than buy a pig in a poke. hyperion is headed towards the door.


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