Merdian’s Davis Refinery attracted protests as it was working for permits to build its plant in Billings County, but it attracted something else when its representatives visited Williston. Excitement.
And not just because it’s more new jobs in North Dakota. Nor because it’s finally helping process a substantial portion of North Dakota’s resource in the state. But because of a statement by one of the project’s managers, Dan Hedrington with SEH Engineering.
“Meridian has a goal,” Hedrington said. “The first is employing North Dakota services and people, as much as we can. And not just people providing services, but employees. They’re going to hire as many people in North Dakota as they can for full-time work.”
The backers for Davis Refinery are from a Belfield-area family. They grew up in North Dakota, but had to move away for careers, because North Dakota at that time didn’t have what they were looking for.
“Those people are in the 70ish area now,” Hedrington said. “They’ve done well in other parts of the country, but their heart is still in North Dakota. They want to come back and develop jobs here that are sustainable.”
Their idea for that was a plant that would process North Dakota’s oil into gasoline, kerosene, low sulfur diesel and low sulfur fuel oil. The plant will initially produce 27,500 barrels per day, but can be expanded to 49,500. It’s initial output has already been contracted.
“We all know that most of the oil in North Dakota is shipped out and brought back in,” Hedrington said. “The bulk of it all leaves and gets refined elsewhere.”
Changing that dynamic would help North Dakota add value to its own resource, and create new jobs in the process.
Ken Callahan, president of the Williston Basin Chapter of the API, appreciated that in particular.
“The Davis Refinery is something that North Dakota could utilize with our resources,” he said after the presentation. “It only make sense to have this built in North Dakota, the second largest oil producing state in the United States!”
Davis Refinery will hire an initial 200 people, according to Hedrington said. But those jobs will have a ripple effect. A Washington study done on refinery jobs found that each refinery job creates 12 jobs in other sectors.
“That includes things like local grocery stores,” Hedrington said.
Davis Refinery has been holding meetings with nearby Dickinson State University and the University of North Dakota.
“Dickinson State is looking at putting in an operating program, supported by Meridian, for students to learn how to operate the facility,” Hedrington said.
UND meanwhile has a petroleum engineering department, and Hedrington said meetings with them have grown in size.
“We initially had one or two professors interested in the project,” he said. “But our meetings have gone from one or two people to 10 to 15 asking how can we benefit this project in North Dakota by adjusting curricula.”
Hedrington said the plant was vetted more closely than many other projects in North Dakota, and took about four times as long to do.
“They went through this with a fine-tooth comb,” he said. “They have reviewed this to levels I’ve never seen before.”
Hedrington said he was told the reason for that was everything that happened with the Dakota Access pipeline.
“They wanted to make sure this thing was bullet proof,” Hedrington said.
The state received 10,832 comments on the Davis Refinery, of which only 1.8 percent came from North Dakota.
Fourteen percent, or 1,508, came from California. Oregon and Washington sent 955.
“There were comments from 25 countries all over the world saying don’t build this in North Dakota,” Hedrington said.
Many of the comments, almost 97.5 percent, were form letters, which could be e-mailed with the click of a button from a website. Just 2.5 percent were unique comments, composed by someone.
Meridian has answered or is in the process of answering each and every comment, Hedrington said.
Most of the permits for Davis Refinery have now been received. There is one last outstanding permit, for air quality. Once that is received, the plant can begin construction. Hedrington said they hope to be operational by early 2019. Once complete, it would be the first full major refinery built in the United States for 40 years.
The first phase of the project will cost around $350 million for construction.
“Meridian has asked for no money from the state for this,” Hendrickson said. “They have not received any tax benefit.”
Tax revenue from the plant, however, will more than double Billings County’s general operating fund, Hendrickson added.
The plant itself has a footprint of 150 acres, but the site is 715 acres in all, so that a buffer zone of wildlife habitat may be created.
Hedrington said several entities have come forward to help with that, including MDU and University of North Dakota. They are looking at installing bee habitat, and the possibility of using geothermal activity at the plant.
“The universities have been excited about this because Meridian has asked them and invited them into the project, and they are looking at study opportunities for students and all kinds of things that will help us out as well,” Hedrington said.
The water allocation permit that Meridian requested proposes to take water not from potable aquifers, but from the Dakota Formation, which is brackish.
“We would process it through reverse osmosis to use it,” Hedrington said.
That has been contested, Hedrington added, and will go through an adjudicated hearing. He believes, however, that the state already did a thorough job of reviewing that and that it will ultimately be approved.