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As clock ticks for proposed oil refinery near North Dakota national park, opponents doubt project's future

Meridian Energy Group's CEO said financing for the proposed Davis Refinery three miles from Theodore Roosevelt National Park is in "a very, very strong" position, but environmental opponents of the project are skeptical it can get the investor backing to begin construction by its new mid-September deadline.

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The Sierra Club, an environmental group, recently unveiled a billboard along Interstate 94 west of Bismarck showing a proposed oil refinery photoshopped against the backdrop of Theodore Roosevelt National Park's Badlands. Jim Fuglie / Special to The Forum
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BISMARCK — Even with a second extension granted by North Dakota environmental regulators, time may be running thin for a proposed and financially troubled oil refinery near Theodore Roosevelt National Park, and opponents of the project are skeptical it can draw the needed investment to go forward with construction.

Three years since Houston-based Meridian Energy Group acquired a requisite air quality permit from the North Dakota Department of Environmental Quality, the company still hasn't started construction at the site of its Davis Refinery three miles from North Dakota's only national park. The company previously received an 18-month extension on the permit after the project stalled during litigation with environmental groups. That deadline expired on June 12, but state regulators granted the project an additional 90 days to commence construction or risk losing the permit.

And though Meridian Energy has been dogged by both environmental and financial litigation in the last few years, the company's top executive insists the Davis Refinery is moving full steam ahead.

"We are in a very, very strong position in terms of financing this project," said CEO William Prentice, who added that he's confident construction will be underway "well before" the new mid-September deadline.

Environmental groups have continued to vigorously oppose the refinery, but some also said the company's track record of delays, financial lawsuits and unpaid bills leave them doubtful that the project can draw the big investments it needs to start building.

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"There's nothing going on there. It's literally, like, an idea," said Scott Skokos, director of the conservationist Dakota Resource Council, of the refinery's empty acreage near Theodore Roosevelt park in western North Dakota. "The one thing this refinery has is an air quality permit, and it should have expired already."

David Stroh, an environmental engineer with the Department of Environmental Quality, said a third extension come September would be possible if the company has legitimate reasons for needing it, but he stressed that the department "would love to see them meet this deadline."

"We don't want them to keep kicking the can down the road," Stroh said.

Prentice said he believes Meridian Energy did in fact meet the benchmarks for its June deadline through a contract agreement reached as of the 12th of the month, but he said by that point the second extension had already been requested and granted. The executive declined to elaborate on the specifics of that contract because of "potential, anticipated litigation."

The Department of Environmental Quality approved the company's request for more time in light of last year's volatility in the oil markets, as well as additional environmental litigation that consumed months of the first extension period, according to letters exchanged between Meridian Energy and the department in June.

But if Meridian Energy hasn't fulfilled requirements for early construction work or binding construction contracts by the new mid-September deadline, Stroh said their permit could lapse.

Permitting for refineries can be highly rigorous — one reason the United States hasn't seen the construction of a new refinery since 1977 . The start of President Joe Biden's climate-focused administration has added to existential challenges for many fossil fuel companies, which have increasingly faced financing barriers as large investors look to funnel money toward low emissions and clean energy projects.

But Prentice said the decades-long gap since the construction of the last new refinery is a key selling point for the Davis Refinery. The refining process can be one of the highest polluting sectors of the oil industry, and Meridian Energy has argued that its proposed refinery would take advantage of technological strides of recent decades to build "the world's cleanest refinery."

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"We're cheating," Prentice said. "Whenever I brag about how clean our refinery is gonna be, I feel bad for a lot of the guys out there trying to operate these old monstrosities."

Prentice said his company has so far spent over $60 million on the Davis Refinery and estimated that the project needs to raise $950 million more over the next nine months.

Meridian Energy has previously faced multiple charges of failing to uphold financial agreements. In 2018, a Twin Cities-based contractor filed a lien alleging that Meridian Energy had neglected to pay more than $2 million dollars for site preparation work. And last year, a group of former employees sued the company in a Texas court over unpaid wages and bonuses.

Prentice declined to comment on the wages lawsuit, citing a confidential settlement, but added that he "doesn't feel Meridian was at fault in any of these instances."

Wayde Schafer, an organizer for the North Dakota chapter of the Sierra Club, said he doesn't think the project will ever get built, but he added that his organization intends to sustain its opposition to a refinery so close to Theodore Roosevelt National Park. "North Dakota's a big state, and they could have put it anywhere else," he said.

Recently, the environmental group unveiled a billboard along Interstate 94 west of Bismarck showing an oil refinery photoshopped against the backdrop of the park's Badlands.

It reads: "Coming soon to a national park near you!"

Readers can reach Forum reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com.

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