TOPEKA | Kansas lost a chance to win a $10 billion refinery because of the recent rejection of a Western Kansas coal plant expansion, critics of that decision say.

 

Dallas-based Hyperion Resources Inc. is no longer considering Kansas as the site for a new oil refinery and is leaning toward South Dakota, said legislative leaders. Those lawmakers objected when a regulator denied a permit for the coal plant because of concerns about carbon emissions.

 

“Due to the uncertain regulatory climate, they’re not going to pursue their permit in Kansas,” said House Speaker Melvin Neufeld, an Ingalls Republican.

 

Rep. Richard Carlson, a St. Marys Republican who was in talks with Hyperion, said a company official told him the news Monday, citing regulatory uncertainty as the reason.

 

A spokeswoman for Gov. Kathleen Sebelius said Hyperion’s decision had nothing to do with the coal plant decision. Sebelius, a Democrat, supported the coal plant rejection.

 

“We understand that South Dakota has been the company’s first choice since June 2007 – which was well before the Sunflower decision,” spokeswoman Nicole Corcoran said in a statement.

 

A spokesman for Hyperion did not return phone calls Wednesday. The company website says a “handful” of sites are under consideration, though only the Elk Point, S.D. site is listed. Decision criteria include water, labor, land and “local business environment.”

 Hyperion has applied for an environmental permit in South Dakota and last week won zoning approval for the project. Hyperion has not filed any permit applications in Kansas.

 

A spokesman from the Kansas Dept. of Health and Environment said Hyperion had asked staff about its chances of getting an air permit. Spokesman Joe Blubaugh said staff reviewed data filed in South Dakota and told Hyperion that a similar application in Kansas likely would be granted.

 

The Associated Press has reported that the Hyperion refinery’s permit application in South Dakota estimates C02 emissions of up to 19 million tons. It would be the first new refinery built in the U.S. in more than 25 years.

 The project would have brought 1,800 permanent jobs and $10 billion in investment in Kansas. The lawmakers said Hyperion was looking at a site in northeast Kansas.

 

KDHE Secretary Rod Bremby rejected Sunflower Electric Power Corp.’s plans to expand its Holcomb, Kan. plant last year, citing C02 emission estimates of 11 million tons yearly. The Sunflower expansion met all existing state environmental rules.

 

After the rejection, lawmakers passed a bill to remove the discretion Bremby used to reject the expansion and allow Sunflower to try again. Sebelius is expected to veto the bill this week.