Oklahoma has been chosen for a new 'next generation' oil refinery. Here's where it will be

A Texas company is set to build a $5.6 billion “next generation” refinery in Cushing that will be one the country’s largest, processing 250,000 barrels of light crude daily. 

Southern Rock Energy Partners revealed Wednesday it selected Cushing as the site for a full-scale conversion refinery that will feature several green energy features — use of solar power and recycled water and a 90% reduction in emissions associated with existing refineries. 

The project comes with a $5.56 billion capital investment and will create at least 423 full-time jobs.

Impact of the new oil refinery in Cushing could top $18 billion

Steven Ward, managing director at Southern Rock, said his company chose Cushing after getting to know local and state economic development officials and civic leaders since talks started two years ago.

"That solidified us wanting to be part of the community, that we can be woven into the fabric of the community," Ward said. "Cushing has adequate and ample supply of crude. It's centrally located. We have distribution options not just through pipeline but also by rail."

Bruce Johnson, director of the Cushing Economic Development Foundation, said the refinery’s economic impact for the state for the first decade of operations will top $18 billion.

“Since the discovery of the Cushing-Drumright Oil Field in the early 1900s, Cushing has been at the epicenter of North America’s energy markets,” said Ricky Lofton, Cushing City Commission chairman. “More than 50 refineries have called Cushing home over our history, and we are looking forward to another successful energy-supplying partnership based upon modern technological advancements.”

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Cushing, with a population of 8,200, is known as the “pipeline crossroads of the world,” with more than 430 oil storage tanks spread out along the southern and northern edges of town. Cushing, which sits about 70 miles northeast of Oklahoma City, was once home to 53 refineries, but the last one was closed by Kerr McGee in 1987.

Ward said the refinery complex will reduce and eliminate 95% of greenhouse gas emissions while producing about 91.25 million barrels or 3.8325 billion gallons annually of cleaner transportation fuels, including gasoline, diesel and jet fuel from crudes sourced domestically from the Anadarko, Permian, Denver and Julesburg, and Bakken basins.

Ward said the refinery will process light crude, which is more plentiful than it was when older refineries were built due to the emergence of shale crude. The current configuration of refineries in the United States were designed to process heavier crudes produced in Venezuela, Saudi Arabia and Mexico.

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When will the Cushing oil refinery start operations?

The project will be constructed over a 36-month period beginning in 2024 with commercial operations beginning in 2027. Ward said the project will create 1,250 temporary jobs during three years of construction.

Ward said the refinery will be the first designed and built to take advantage of green energy technology. He said the refinery will produce blue hydrogen with carbon capture to reduce water consumption by 90% and will recycle 80% of waste water. Plans call for the refinery to be powered by 100% renewable electricity sourced by either the electrical grid, or generated onsite from recycled waste heat, as well as geothermal and solar systems.

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Ward said he expects to submit an air quality permit for review within the next few months. The company is building one of the heaters that will be used for emissions, Ward said, that will be a model that will show how the refinery will work with the combination of hydrogen and oxygen.

The refinery coincides with a move to electric vehicles, but Ward said the market for fossil fuels will not go away and added he sees increased demand in central and south America.

“The dedication of the professional economic development organizations of Oklahoma has made and will make our efforts to advance the energy independence of the United States, by processing domestically produced crudes into cleaner transportation fuels, a reality," Ward said. "Oklahoma has been awesome. There are a lot of great people who have stepped up to work with us."

The announcement coincides with new developments in recent months that will expand electric vehicle production, battery and solar power as a part of the state’s energy industry.

Brent Kisling, executive director of the Oklahoma Department of Commerce, said the refinery will strengthen the state’s “all of the above” approach to energy.

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Johnson said a mix of incentives are being assembled to assist in construction financing and will include the state’s Quality Jobs Act, investment tax credits, a five-year ad valorem and sales tax exemption, and Career Tech job training.

The amount of the incentives was not disclosed.

“We have passed legislation off of both the House and Senate floors this session that will support the construction and expansion of oil refinery infrastructure in Oklahoma,” said House Speaker Pro Tempore Kyle Hilbert. “As we work on finalizing language in Senate Bill 210, we are sending a message to the world that here in Oklahoma, we support the energy industry.”

This article originally appeared on Oklahoman: Southern Rock Energy to build 'green energy' oil refinery in Cushing