Courtesy Rock River Resources
GREEN RIVER, Emery County — It happened in March in North Dakota where the shale boom is playing out, and Utah is poised to follow later this year when ground is slated to be broken for a new oil refinery.
The refineries will be the first in the United States in nearly 40 years — perhaps a harbinger of a new reality that has the country on pace to become the world's largest oil producer by the end of the decade.
North Dakota, which is witness to an unprecedented oil boom because of the Bakken shale play, broke ground on what will be the country's first refinery since 1976, arresting a trend that just five years ago saw a bevy of U.S. refineries forced to close.
Ranked 11th in the nation for crude oil production, Utah is now on tap to host a $230 million refinery four miles west of Green River, where Houston-based Rock River Resources plans to build. Construction will begin later this year, with operations slated to start in 2014.
The refinery will process 5,000 barrels per day of the heavier wax crude and 10,000 barrels a day of what's called the light or sweet crude.
"It's never an easy process, but all the heavy lifting is done," said Jeff Beicker, the company's chief operating officer. "We don't see any obstacles in our way that are beyond the obstacles of any big project, and we think our team is well-equipped to handle this."
There have been obstacles raised by a consortium of environmental groups that have launched an appeal of the permit granted to the company in June by the Utah Division of Air Quality. The permit lists the refinery as a minor, not major, source of emissions, and therefore under a different regulatory umbrella that only requires approval from the state, not the Environmental Protection Agency.
"Our challenge contends that this is a major source, not a minor source of emissions," said Taylor McKinnon, director of energy with the Grand Canyon Trust. "The state and its proponents have underestimated the pollution that would come from this plant."
The company recently decided to retool its application to air quality regulators and will submit a revised design of the facility, which will kickstart another appeal process that will unfold in the months to come.
McKinnon and environmental groups Center for Biological Diversity, the Southern Utah Wilderness Alliance and Moab-based Living Rivers see the move as a victory in a project that has numerous ramifications for the state and its residents.
"Our analysis suggests the state does not even know how to do this permitting correctly," he said, "and that speaks to whether or not the laws that protect our clean air are being upheld."
State air quality regulators stand by the permit and say the company has met every legal requirement that falls under the purview of the agency.
The groups insist the state should have conducted an independent analysis of the pollution impacts rather than rely on the company's own information. Beyond that, they cite issues with dust, truck traffic and the cumulative impacts to the Colorado River watershed.
"The state of Utah is setting itself up to become an untenable neighbor in a watershed that is fully intended to be shared in an equitable manner," their complaint reads.
McKinnon and others say by opening up the ability to process oil shale or shale oil, the refinery will throw out the welcome mat for strip mining in the Colorado River Basin at a time when the country should be pursuing development of clean energy.
The Governor's Office of Economic Development, however, has embraced the project, voting in June to grant a $12.7 million tax credit for the refinery.
Beicker said there is nothing he can do to satisfy the refinery's critics when their agenda is "don't build the refinery."
"There is opposition there, and I understand the opposition," he said.
But Beicker pointed out the refinery will be among the cleanest in the country because of its use of the best technology that is available, enabling it to meet emission limits he said are among the most stringent ever required.
"We're making every effort to keep our emissions at a minimum, and the technology puts us in a position to say we are cleaner than the guys who came before us," Beicker said. "We don't want to have excessive emissions."
The location of a refinery in eastern Utah also opens up choices for the region's oil producers who may opt to ship their product there, rather than haul it by truck to the Wasatch Front for processing at any of its five refineries. The plant will also include a rail shipping facility, allowing transport in that manner.
"It is obviously a significant step for eastern Utah and the ability to process crude oil in eastern Utah," said Lee Peacock, president of the Utah Petroleum Association.
Utah stands at a processing capacity of 175,000 barrels per day, and the Green River refinery will add to that. By refinery standards, Beicker's project is small, but it fits the needs of the market, Peacock said.
"It does give flexibility to oil producers in another part of the state," Peacock said. "It gives them another option, and options are good."
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