Proposed refinery near western North Dakota national park spurs debate over economic, conservation concerns

THEODORE ROOSEVELT NATIONAL PARK - A pack of horses roamed a snow-covered field on the eastern edge of Theodore Roosevelt National Park on a recent afternoon, not far from where the landscape transforms into the rugged Badlands of western North Dakota.

The natural scenery was contrasted by vehicles whizzing by on Interstate 94 nearby. A rail facility near Fryburg was clearly visible in the background.

Now conservationists are fighting what they fear will be an unwelcome sight on the park's doorstep: an oil refinery.

That project, proposed by California-based Meridian Energy Group, hit a major milestone this month when the North Dakota Department of Health released its draft air permit, deepening the debate between those who embrace the nearly $1 billion investment in the oil-rich region and those who see it as another example of the industry's infringement on the Badlands.

"The reality is it is in oil country and a lot of people in that area benefit from being in oil country," said former Gov. Ed Schafer. "On the other hand, it's also in the beautiful, majestic Badlands."

The permit is now up for public comment until late January. A public hearing on the Davis Refinery will be held at 5:30 p.m. MT Jan. 17 in the Dorothy Stickney Auditorium, May Hall, Dickinson State University, 291 Campus Drive, Dickinson.

The National Parks Conservation Association has already rallied people to urge Meridian to relocate the facility, citing potential threats to air quality, views, night skies and "natural soundscape." It said the proposal "dishonors" the legacy of the park's namesake, President Theodore Roosevelt, who said his time ranching in the area had a profound effect on his life.

"We still hope that they'll see the light and move the refinery itself away from the park," said Bart Melton, NPCA's northern rockies regional director. "Theodore Roosevelt National Park should be protected at the same level that we would protect Yellowstone or Yosemite or Grand Tetons."

Meridian's CEO, meanwhile, said opposition to the project is based on a misunderstanding of what the Davis Refinery will be. It won't be like the refineries of yesteryear, Bill Prentice said in a recent interview, but a cleaner one that will change the industry for the better.

"Quite frankly, it shouldn't matter where you put a refinery if you do it the right way," he said. "Everybody wants to kick them off down the road to some industrial ghetto someplace. I've always resented the implication of that. If you throw it off in a place where nobody cares about it, you can pollute all you want to?"

Billings County leaders, who have already given conditional zoning approval for the facility, are eyeing the economic boost it could bring the area, including a major property tax windfall. Nearby Belfield, which is in Stark County, could also benefit from the 200 jobs Meridian says the refinery could create once it's constructed.

Billings County Commissioner Jim Arthaud said they were "very comfortable with the viewshed issue." And while he said the park is "part" of the local economy, Arthaud said it's a "commodity-producing county."

"Oil and gas, cattle is where most of the revenues come from. The park is very near and dear to us, don't get me wrong," he said. "It's never something that we take lightly."

A cleaner refinery?

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. Pending weather conditions, it plans to break ground soon after the Health Department permit is awarded.

The refinery will produce primarily gasoline and diesel fuel, according to Department of Health documents, as well as jet fuel, fuel oil and liquefied petroleum gas. Meridian said it chose the location, a few miles east of the park's south unit, in part for its proximity to the intersection of two highways, pipelines and a rail line.

The state Department of Health has determined the project would be a "minor source," meaning it would emit less than 100 tons per year of each pollutant. Terry O'Clair, director of the department's air quality division, said the project went through a "very critical review" in part because it would be next to the park, which enjoys special protection under federal environmental regulations.

Prentice said they worked with engineers to develop a comprehensive plan to reduce emissions. The facility won't have cooling towers, the company said, and it will only run its flare stack during "system emergencies."

With "low-profile" physical structures, Meridian said it designed the refinery so it wouldn't be visible from the park. It said it would create "natural vegetation borders and tree lines" to obscure the view from the interstate and Belfield.

"When we're done with this refinery, I think we will have earned the respect and support of even the most ardent environmentalist," Prentice said. "Because they will recognize that if every refinery in the country were to adopt our technology and our business practices, this entire country would be cleaner."

Conservationists, however, are skeptical of Meridian's claims. Melton noted that the NPCA commissioned an analysis earlier this year that concluded the refinery is "almost certainly" a major source of pollution.

"The reality is, minor or major source, we're going to give this permit a real close look and make sure that the calculations are correct," he said.

Park Superintendent Wendy Ross said the National Park Service is evaluating data from the Health Department application. She said they are concerned about its proximity to the park.  

“Pristine air quality is really important to National Park Service areas,” Ross said.

'A national treasure'

The Billings County zoning approval is conditioned on the project complying with permits required by the state, according to meeting minutes. A State Water Commission permit application to draw water from the Dakota aquifer is now being reviewed by an administrative law judge, a commission spokeswoman said.

The company will go before the North Dakota Public Service Commission Tuesday to discuss why the refinery isn't going through the regulators' siting process. Although Meridian has described the project as having a capacity of 55,000 barrels per day, it now says it will be 49,500 barrels per day, 500 barrels below the statutory threshold that triggers the PSC review.

Prentice previously said they may decide to expand beyond that in four to five years. He said the company was "just trying to stay within the law" and "show an abundance of caution."

Jim Fuglie, a former state tourism director who has frequently railed against the project on his blog, said the siting law was meant to "protect the public good" and it was "sleazy" for Meridian to come in right below that threshold. He worried about the impact the refinery could have on a park that saw almost 754,000 recreation visitors last year, the most in almost 40 years, according to National Park Service figures.

"Anybody that's going to the national park is going to have to drive by this huge industrial complex," Fuglie said. "And it just says something really bad about North Dakota that we'd let that happen."

Just down the road from the park's eastern boundary is the town of Medora, a major tourist attraction that its own convention and visitors bureau boasts is "surrounded by breathtaking, unspoiled nature with Theodore Roosevelt National Park acting as its backyard."

Schafer, who chairs the Theodore Roosevelt Medora Foundation Board, said the group hasn't taken a position on the project and will instead trust regulators to review it. But personally, he's not sure the economics justify a new refinery, given that another one built in the past few years just down the road had struggled.

Between Andeavor facilities in Mandan and Dickinson, North Dakota currently has a refining capacity of 94,000 barrels per day, according to figures provided by the company. North Dakota is the country's No. 2 oil producer, tallying more than 1.1 million barrels per day in September.

In recent years, much of the oil transported from the multi-state area that includes North Dakota was sent to the Gulf Coast, according to the U.S. Energy Information Administration. Building more refining capacity here would reduce transportation costs, North Dakota Petroleum Council President Ron Ness said.

"(Having) every option possible for a producer is a good thing," he said.

Jan Swenson, executive director of the Badlands Conservation Alliance, said the organization doesn't oppose a refinery itself, but rather the location Meridian has proposed. She worried the project could be "precedent-setting."

"The park is a North Dakota treasure as well as a national treasure," Swenson said. "We need to pay attention to what's happening in western North Dakota and assure that some of it is protected, is saved, or we will lose it all."

1/2: A rail line runs past the proposed site of an oil refinery in Billings County on Friday, Dec. 8, 2017. The Davis Refinery project has attracted criticism for its proximity to Theodore Roosevelt National Park. John Hageman / Forum News Service

2/2: William Prentice