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William C. Prentice is the chairman and CEO of Meridian Energy Group Inc. Prentice and others from Meridian met with members of the North Dakota Public Service Commission on Tuesday at the state Capitol in Bismarck and talked about a proposed oil refinery in the western part of the state.

The Public Service Commission strongly urged developers of a refinery proposed near Theodore Roosevelt National Park to apply for a siting permit Wednesday, cautioning that proceeding without one could delay construction if someone files a legal challenge.

Commissioners pressed representatives of Meridian Energy about why they’re not applying for a siting permit, which state law requires for refineries that process 50,000 barrels of oil per day.

Meridian initially promoted the Davis Refinery as expanding up to 55,000 barrels per day, but recently changed the figure on its website to 49,500 barrels.

“It puts you within the boundaries of the law, but it doesn’t sit well with folks,” Commissioner Julie Fedorchak said during a two-hour discussion with the company. “It looks like you’re just barely skirting the siting requirements.”

Meridian CEO Bill Prentice said the company plans to construct a refinery capable of refining 27,500 barrels per day, and it’s possible the refinery could expand in the future.

“We want to be clear. Our current plan is 27,500. Whatever we do after that will depend on the markets, particularly the capital markets,” Prentice said.

Commissioners said inconsistencies provided by the company about the capacity and cost of the facility have created confusion with the public, which is why they invited Meridian to discuss the project.

Fedorchak said some companies are proactive and go through the siting process for smaller facilities on the front end if they anticipate expanding.

Other state agencies are reviewing air and water permits for the refinery, but those reviews are more narrowly focused. The PSC permitting process is more comprehensive, with the goal of ensuring orderly energy development with minimal impacts on the environment.

“I know you don’t have to do it, but I think there’s a lot of compelling reasons why you should,” Fedorchak said.

Prentice said he wants to defer applying to the PSC until the refinery is in operation and officials decide whether to expand.

“In the private sector, we very seldom look for excuses to have another regulatory layer on what we’re trying to do,” he said.

Prentice emphasized that the Billings County Commission did a thorough review when it granted a conditional use permit.

Commission Chairman Randy Christmann said he fully expects that, if the company breaks ground on the refinery, someone from the public will file a complaint to the PSC alleging the project is in violation of the siting act.

Then the commission would have to take sworn testimony and evaluate evidence, potentially delaying construction and leading to possible court challenges, Christmann said.

Prentice said company executives considered other sites in North Dakota and chose the location near Belfield because of the proximity to Interstate 94, U.S. Highway 85, a rail facility and gathering pipelines.

The refinery is 3.5 miles from the eastern boundary of Theodore Roosevelt National Park, which is the main concern cited by opponents.

Fedorchak questioned why Meridian didn’t choose a different location to the south or east that would be farther away from the national park but have some of the same transportation options.

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Several questions remain unanswered about how much solid and liquid waste Meridian expects to generate and how it will be disposed. The company plans to treat water from a brine formation deep underground for use in the refinery, but has not finalized those plans.

Prentice referenced the availability of gathering pipelines and a nearby rail facility, but did not provide specifics about whether the company has commitments with those facilities.

Fedorchak said one of the concerns she’s heard is about truck traffic and pointed out there is no refined gasoline pipeline in that area.

Prentice said the company’s goal is limit the amount of truck transportation as much as possible, but said trucks will be needed to get refined products — gasoline and diesel — to local markets.

Greg Kessel, owner of the land where the refinery would be built, advocated for the economic benefits the refinery would bring to Billings County through tax revenue and jobs.

“These are the kind of projects we need in our state,” said Kessel, a member of the Meridian advisory board.

Linda Weiss, who lives about 3 miles away from the proposed refinery in Stark County, said in an interview she is concerned about the location and its potential impact on neighboring residents.

“What hidden costs will it have to the county next door, all those residents?” said Weiss, a member of the Dakota Resource Council.

The North Dakota Department of Health is reviewing an air quality permit, with a public hearing set for Jan. 17 in Dickinson. State Water Commission staff had recommended approval of a water permit, but the permit is being contested and assigned to an administrative law judge. A hearing is anticipated early next year.

If the health department approves the permit to construct, Prentice said the facility could be under construction this winter and operational in the first quarter of 2019.

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(Reach Amy Dalrymple at 701-250-8267 or