Keeping Track Of Bridges and Refineries

A short update on a couple of things that I have written about recently.

MERIDIAN ENERGY

As I reported here earlier this summer, Meridian Energy Group’s Permit to Construct the Davis Refinery just three miles from Theodore Roosevelt National Park expired in June, three years after it was first issued by the North Dakota Department of Health (now the North Dakota Department of Environmental Quality). The DEQ said in June it would renew the permit for only three months, and that the company would have to report progress on construction of the refinery by July 23.

To comply, Meridian called on June 22 and scheduled a face-to-face meeting with the DEQ. It was held yesterday, August 3. At the meeting, they promised to begin work at the site right away, that they would sign a binding contract to construct the plant by September 12, (facing a loss of ten per cent of the contract’s value if they back off), and that they will complete construction and be operational in three years.

Three years. That would be 2024. Uh huh.

Let me quote from The Bismarck Tribune, January 27 2016: “Meridian’s vice president of business development, Fred Bloom, said . . . the plan is to finalize engineering plans, begin construction on the refinery this summer and be selling diesel within two years.”

            Or December 15, 2017: “Meridian hopes the first phase of the refinery will be up and running in early 2019, with the full 49,500-barrel-per-day refinery operational in early 2020.”

            Or July 17, 2018: Meridian CEO William Prentice said “Construction on the refinery is expected to start next year with operations scheduled to begin in 2020.”

          Or August 8, 2019: “Meridian began site work for the refinery a year ago. Officials last spring said the goal was to have the facility fully operating by mid-2021.”

Or the company’s website RIGHT NOW which says “. . . plant completion is expected by 2023.”

Now the folks over at the DEQ weren’t born yesterday. They read the Tribune too. But federal guidelines which bind them say that if a company has a contractual obligation to build the refinery, that constitutes the “start of construction,” and they should re-issue the Permit to Construct.

            They were a little reassured last month when DEQ Director David Glatt received a letter from Meridian’s Chairman and CEO William Prentice that said “On June 12, 2021, Meridian and the same subsidiary of McDermott International (a large engineering firm based in Houston) responsible for the Front-End Engineering and Design (‘FEED’)  for the Davis Refinery entered into a definitive engineering agreement for the detailed design, engineering, procurement, fabrication and construction of the atmospheric and vacuum distillation units (collectively the ‘CDU’) for the Refinery.”

            Well, I wonder if McDermott is ready to hold up its end of the contract. Eighteen months ago, in January 2020, the company filed bankruptcy. According to the Securities and Exchange Commission, the company was more than $9 billion in debt. In a few short months, the company announced it had somehow gotten rid of $4.6 billion of that debt. How does that happen? In bankruptcy proceedings, usually it means somebody didn’t get paid, I think.  

Much like Meridian, which still has unpaid employees and contractors. Last time I checked, there was a $2.2 million lien against the company in Billings County, North Dakota. Last time I checked, a group of former employees who filed a lawsuit against the company in Texas was still owed back pay of more than $600,000. Last time I checked, the company still had not paid for the land on which they told the DEQ this week they plan to start construction of their refinery this fall. How does that work? Do they really intend to build a billion-dollar refinery on somebody else’s land?

Meridian and McDermott. Birds of a feather . . .

THE BRIDGE TO NOWHERE

I reported here in July that the Billings County Commission had killed plans to build a bridge across the Little Missouri State Scenic River on the historic Short Ranch north of Medora. That’s still true.

But former Billings County Commission Chairman Jim Arthaud, the bridge’s champion, doesn’t give up easily. Arthaud enlisted the aid of Billings County Auditor Marcia Lamb, who put this item on the agenda for the Commission’s August 3 meeting (yesterday): CONCERNED BILLINGS COUNTY RESIDENTS REGARDING THE LITTLE MISSOURI RIVER CROSSING.

 Sure enough, a posse showed up at the commission meeting. People who attended said the meeting, which started at 9 a.m., was still going after 3 p.m., the longest county commission meeting anyone could remember.

There was a lot of ranting and raving, but commissioners held firm on their decision not to use their power of eminent domain to condemn land on the Short Ranch for the bridge and its roads.

But they fudged on whether there might ever be a bridge built in the county. From what I can tell, they promised to look for other places to build the bridge, or, in its place, a cement low-water crossing.  

There was renewed talk by posse members of using federal funds to build the project, including the big trillion-dollar infrastructure bill now being debated in Washington. It’s likely that using federal dollars for such a project will require adherence to the Environmental Impact Statement (EIS) already completed for the project. That process severely limited the possible options for bridge locations, so if the commission goes shopping around for a new location, they’re probably going to have to pay for it themselves.

That makes a lower-cost cement low-water crossing a much more attractive option. If the commission truly wants to just get personal vehicles, farm equipment and emergency vehicles across the river in a timely manner, that’s what they’ll look for. But it won’t make canoers, who’ll have to portage around it, very happy. And it won’t make the oil industry happy. Stay tuned.

IN CONCLUSION

The Department of Environmental Quality’s job is to make sure that any facility they have permitted doesn’t mess with the Class 1 Air Quality Standards which protect Theodore Roosevelt National Park. So they will carefully examine the contract between Meridian and its engineers to try to ascertain whether or not they believe the refinery will fall within the guidelines the DEQ has set for that. They’ll have routine meetings throughout the fall with Meridian to make sure everything is okay. We’ll need to count on them to make sure what Meridian is building—if they ever start building—doesn’t mess with our air.

But there are other state agencies, among them the Attorney General’s office, that ought to be looking carefully at the company’s business practices, and helping us decide if companies like McDermott and Meridian are the kind of companies we really want in North Dakota.

And as for bridges in the Bad Lands, we need to hope the newly-formed Billings County Commission continues to look out for the best interests of the river that runs through their county, and the people and the critters who live there.

That river is North Dakota’s only designated State Scenic River. It’s a state and national treasure. It needs to be protected.

4 thoughts on “Keeping Track Of Bridges and Refineries

  1. Hi Jim….I always enjoy reading The Prairie Blog. Your mention of the Little Missouri being North Dakota’s State Scenic River was something I didn’t know. Chuck spent a lot of his younger years in that area, and his wish was that we scatter his ashes there. So, our entire family drove up to Killdeer on Aug. 7, 2020, and followed his wishes. It was under the bridge just north of Killdeer. It is a beautiful spot.

    Sorry this isn’t about the refinery or the bridge, but……..

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  2. Jim,
    I am a little unclear about the future of the proposed oil tefinery. Does the state of North Dakota Department of Environmental Quality have the power to kill the plant now? Are the DEQ’s hands tied because permission to construct was issued years ago?
    In short, what did this meeting mean? Was it a show just to stall Meridian’s investors?
    So, what happens next? And has Meridian announced any sort of construction timeline in the last few years?
    Keep up the good work, Jim. Thank you.

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  3. How’s the barley on the construction site?

    A refinery three miles distant from TRNP can’t be all that bad. Refineries are known to catch fire from time to time and a fahr in the Badlands of North Dakota is always welcomed, broken window theory stuff.

    More grassland fires will be an economic benefit. Ecocide, but who cares?

    Meridian could care less.

    It’s the state’s fault that a permit was issued in the first place.

    We’re just doing bidness here, nothing else.

    Fighting grassland fires is not in the corporate interest nor ethic.

    The Almighty Dollar is the bottom line.

    We smoked some folks.

    Welcome to the maelstrom of the malaise, chaos and all of that nonchalant jazz.

    Like

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