Topeka ? A group of lawmakers, including House Speaker Melvin Neufeld and state Rep. Tom Sloan of Lawrence, on Wednesday blamed Gov. Kathleen Sebelius administration’s rejection of two coal-fired power plants for the loss of a proposed oil refinery project in northeast Kansas.

The legislators said Hyperion Resources Inc. chose South Dakota over Kansas for construction of a $10 billion oil refinery and electrical power plant because of “regulatory uncertainty” in Kansas.

“The damage is happening to the state of Kansas,” said Neufeld, R-Ingalls.

Sebelius’ spokeswoman Nicole Corcoran denied the legislators’ assertion.

Corcoran said Hyperion Resources’ decision to build in South Dakota came months before the Kansas Department of Health and Environment rejection of the two 700-megawatt coal-burning units in southwest Kansas.

“Regulatory uncertainty doesn’t exist in Kansas,” Corcoran said.

Officials with Dallas-based Hyperion did not return a telephone call for comment.

Media reports indicated Hyperion chose South Dakota in June 2007 for the refinery. The decision on the coal-fired plants in Kansas was announced four months later in October 2007.

At that time, KDHE Secretary Roderick Bremby denied permits for the $3.6 billion power plants citing health and environmental concerns from the project’s annual emissions of 11 million tons of carbon dioxide. CO2 emissions have been linked to climate change.

Neufeld and supporters of the coal-fired plants have pushed through legislation that would essentially require Bremby to issue permits for the plants. Sebelius has vowed to veto the bill, setting up a possible attempt next week in the House and Senate to override the veto.

Supporters of the plants have said KDHE’s rejection of the permits has put numerous Kansas industries in jeopardy because the action was based on CO2 emissions, which aren’t regulated at the state or national level.

Sloan said Bremby’s decision has put Kansas at a disadvantage.

“Other states are benefiting by getting those jobs,” he said.

But Corcoran said if there is any regulatory uncertainty it is on the federal level because of the U.S. Supreme Court ruling in April 2007 that said EPA should regulate CO2 emissions.

Hyperion apparently considered several locations, including one in northeast Kansas, for a refinery to turn 400,000 barrels of crude oil per day into gasoline and diesel and transport its product on the planned TransCanada Pipeline. Hyperion officials say the project will produce 10,000 construction jobs and 2,000 permanent jobs.