By Drew Griffin and Kathleen Johnston
CNN Special Investigations Unit
ELK POINT, South Dakota (CNN)
-- Farmland stretches as far as the eye can see -- row upon row of corn
stalks waving in the breeze. It's an unlikely place to watch America
debate its energy crisis but a battle is raging in this corner of South
Dakota over what could be the nation's first new oil refinery in 30
years.
Hyperion chief executive Albert Huddleston sent CNN a tape of comments in lieu of an interview.
But while the county as a whole favored the project
by a 58 percent majority on June 3, most of the rural voters whose land
would be affected by the refinery said no.
"I'll keep fighting
it," said farmer Dale Harkness, whose front yard could one day face the
refinery, which would also need a pipeline to be built.
He and
his wife, Carol, vow to fight in the courts to prevent a project they
say is speculative at best, and at worst will pollute the land, creeks
and skies of this tiny town for generations to come.
"They will
never build here. 150 years from now someone will be enjoying that land
and this land," Harkness said, pointing to the property around him. Watch farmers and the local mayor react to the refinery plan »
"They" is a Dallas-based company called Hyperion Energy, which says the plant will be a first-of-its kind "clean" refinery. It has never built a refinery and concedes it doesn't currently have the money to build this one either.
But project executive Preston Phillips said the project is necessary and his group is the one to build it.
"We wouldn't be spending the resources and the time if we didn't think we could," he said.
"We continue to push the ball down the road. There's $4-a-gallon gas at
the pump. Crude oil is $120 to $140 a barrel. This project is at the
right time today and the United States needs it."
The mayor of
Elk Point, Isabel Trobaugh, agrees. She said the refinery would bring
in hundreds of permanent jobs and thousands of construction jobs during
the six years it takes to build.
Trobaugh, like the rest of her town, has been kept in the dark about
the refinery plan, but that has not dampened her enthusiasm.
"They say that's the way big business does it," she said. "When they do
their thing they don't want anyone to know they are coming in, so they
keep it a secret."
Hyperion's involvement in Elk Point was
initially dubbed "the gorilla project" because several large concrete
gorilla sculptures were placed in the area now marked out for the
refinery when nothing else was known.
But when details about the
oil plant emerged, neighbor suddenly became pitted against neighbor,
the Harknesses said. Some were willing to sell their land, others
wanted to fight the development, Carol Harkness said. Divisions were
even obvious in church where neighbors who once worshipped together
found themselves unable to sit with one another for even an hour on
Sunday, she said.
The initial secrecy by Hyperion created some
of the ill will and raises other questions, said Mitch Pugh, editor of
the nearby Sioux City Journal.
"I think there are a lot of
unknowns," he said. "Those Hyperion people -- not a lot is known about
them. They are not big players in the oil market. ... Where are they
going to get the money?"
That's a question that Hyperion
officials can't -- or won't -- answer. A request to the U.S. government
for a guaranteed loan for the $10 billion in construction costs went
nowhere. The company itself has mostly been involved in real estate
dealings with oil and gas leases, projects that haven't generated the
capital needed for the refinery.
Hyperion's chief executive is
Albert Huddleston, whose wife, Mary, is the granddaughter of famed oil
tycoon H. L. Hunt. A federal lawsuit filed by a former trustee of
Huddleston's wife's multimillion-dollar trust claims Huddleston wasted
money from that fund. Huddleston has countersued, charging the former
trustee with his own fraud.
Huddleston declined to be
interviewed by CNN but sent a videotape in which he talked about global
politics and Canadian oil among other topics.
He also mentioned how he might build the refinery.
"I made a decision that if you came to me and had no permit for 30 to
35 years then I'm not going to take you seriously because I'm not going
to believe that you can get it,'' he said on the videotape.
"So
I'm not going to these strategic and financial partners and other
people until we have a permit. And if we don't get the permit perhaps
people are right: I just don't believe that's the case."
Mayor Trobaugh said she knows
Huddleston will build the refinery and has the means to do it. But
she's not willing to share the details, even with her constituents.
"No I wouldn't do that," she said. "What he told me was private about his own personal funding and that's not public."
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