Exec: Davis Refinery Not Affected by Dakota Prairie Refinery Sale

BELFIELD — The company trying to build an oil refinery just three miles from Theodore Roosevelt National Park in Billings County isn’t slowing down its efforts, even after the Dakota Prairie Refinery sold at a loss earlier this week.

Thomas Johnson, chief operating officer of California-based Meridian Energy Group, said Tuesday’s sale of the Dickinson diesel refinery doesn’t affect his company’s goal of building the Davis Refinery, which would process 55,000 barrels of Bakken crude a day.

“We did economic modeling, what our costs are going to be and concluded that we’re going to make some profits there in the Bakken and the Belfield area,” Johnson said.

Tesoro bought the Dakota Prairie Refinery from MDU Resources Group and Calumet Specialty Products, which broke ground on the refinery in 2013 and opened it in May 2015.

Johnson pointed to the Davis Refinery’s efforts to build a refinery that’ll produce gasoline, jet fuel and ultra-low sulfur diesel fuel as the difference between its plans and the Dakota Prairie Refinery, which processed 20,000 barrels of oil into around 8,000 barrels of diesel fuel a day, along with a set of byproducts.

MDU Resources spent $430 million on the refinery and reported that it lost $7.2 million in its first quarter of operations. The refinery’s construction was plagued by cost overruns and construction delays.

Johnson said he was involved in the building of PetroMax Refining, a 25,000-barrel-a-day refinery in Houston that opened last year, and said Meridian is using a similar business model with the Davis Refinery.

“We were successful last year, so we fully anticipate being successful this time,” Johnson said. “The key is not to get into a situation like Dakota Prairie. It’s unfortunate what happened, but it is a good lesson to learn.”

In an effort to rally community support for the Davis Refinery, Meridian is hosting a public gathering at 5 p.m. Tuesday atop Buck Hill, the highest point in Theodore Roosevelt National Park’s South Unit.

Opponents of the refinery have said it will be clearly visible from Buck Hill, and have used that as ammunition to stop it from being built.

“Basically, we want to give everybody kind of an opportunity to see that the view from Buck Hill towards the refinery,” said Adam Williams, Meridian’s director of corporate communications. “We’re going to have some surveyors out and we’ll be floating several large weather balloons at the exact height as the top of the crude tower from grade. We want to do all we can to give people an opportunity to see what the effects will be, or if there’s any visual line of sight from Buck Hill. My guess is it won’t be too visible from the naked eye.”

The Billings County Commission is scheduled to discuss the Davis Refinery for its third straight monthly meeting at 9 a.m. Wednesday. Williams said Meridian CEO Bill Prentice plans to attend the meeting, along with several other of the company’s key players.

Referendum for New Richardton-Taylor School Passes

RICHARDTON — The Richardton-Taylor school district is getting a new high school.

Residents of Richardton and Taylor voted on Tuesday night to approve a bond referendum during a special election, though the results were clearly split between the two towns.

Sixty-five percent voted in favor of the $2 million bond referendum for the $12 million project. Curiously, nineteen less voters approved of raising the district’s debt limit by 5 percent to help finance the project with a $10 million loan from the Bank of North Dakota.

“We’ve been working on this thing for two-and-a-half, three years,” Richardton-Taylor Superintendent Brent Bautz said late Tuesday night. “We’ve put a lot of hard work into it. It’s good to finally realize it’s coming to fruition.”

The bond referendum needed a 60 percent “yes” vote to pass. It was decided by just 28 votes.

Vote tallies showed Richardton voters overwhelmingly supported the project while Taylor residents opposed it.

Seventy-three percent of Richardton residents voted in favor of both the referendum and raising the debt limit. Only 43 percent of Taylor residents voted for the referendum and 40 percent voting to raise the debt limit.

Bautz said the district needed to raise the debt limit because the North Dakota Century Code would have only allowed the district to borrow 5 percent of its assessed value, which wouldn’t have been enough for the project. The approve allows the district to borrow 10 percent of its assessed value.

Bautz said the district would like to begin construction on the project next spring with a scheduled completion by summer 2018.

Richardton-Taylor’s administration and school board approached residents about a remodel earlier this year because of decay in the 55-year-old facility and as a long-term cost-cutting move.

The current high school building in Richardton holds grades 7-12. The elementary school in Taylor has grades 2-6. Pre-kindergarten through first-grade students are in the St. Mary’s Social Center Building in Richardton, which costs roughly $72,000 annually in lease payments and additional staff.

With the referendum passed, pre-K through first grade will move to Taylor and grades 5-12 will be placed in Richardton.

Year of change in Oil Patch: City leaders move forward after unexpected crude price declines in 2015

An oil well pumps on the outskirts of northwest Watford City on Oct. 14. Despite the decline in oil prices, a hectic way of life continues in many Oil Patch cities, though some city leaders say 2015 brought many changes
An oil well pumps on the outskirts of northwest Watford City on Oct. 14. Despite the decline in oil prices, a hectic way of life continues in many Oil Patch cities, though some city leaders say 2015 brought many changes

Leaders in western North Dakota’s Oil Patch cities say life didn’t change as abruptly as many expected it to in 2015 as crude prices bottomed out, oil rigs disappeared from the landscape, and oilfield workers packed up and left the area in droves.

As traffic slowed, crew camps closed and apartments emptied, Williston, Dickinson and Watford City continued to build infrastructure and work on long-term projects while keeping a close eye on the industry for even the slightest changes.

“As a city, we haven’t had a chance to take a breath yet,” Williston Mayor Howard Klug said. “We had $100 million worth of projects going on. We’re finally getting them all buttoned up.”

In McKenzie County, which produces more oil than any county in the state, Watford City Mayor Brent Sanford said “it’s really business as usual.” But, he said, challenges are neverending, despite the creation of what city and county leaders believe is a long-term industry through both oil and natural gas production jobs.

“People are still busy,” he said. “There’s not a lot of job loss in Watford City, comparatively, and there are still job openings. There are still employers who are still trying to figure out plans for hiring the right amount of employees and the right employees.”

Dickinson, meanwhile, has fallen back on its manufacturing industry to soften the blow of massive oilfield job loss after what City Administrator Shawn Kessel said after the city experienced multiple years of 10 percent growth.

“I think people really have to look the whole thing in perspective. … That stuff is really not sustainable in the long term,” he said. “What the downturn has done has allowed our manufacturers to take advantage of the economy. They had a hard time expanding because of such a low unemployment rate. They couldn’t find employees. Now they can. Rather than having expansions happen in other communities, they can now look at Dickinson again. I think that’s great. I’m really glad to see that. It further diversifies our economy. It makes us more resilient in managing the back side of the boom.”

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Dakota Prairie Refinery posts losses, MDU Resources puts second refinery on hold

 

MDU Resources’ plans for a second refinery in North Dakota are being put on hold after a volatile mix of market conditions — largely paced by low oil prices — led the Dakota Prairie Refinery west of Dickinson to post larger-than-expected losses in 2015.

The company said in late 2014 that it had planned to build a second greenfield refinery in Minot. In its latest capital investment report filed Nov. 17 with the Securities and Exchange Commission, MDU Resources stated capital expenses for a second refinery had been removed from its forecast as it “focuses on optimizing its current refinery investment.”

“Once we reach the point where we can sit back and say this (the Dakota Prairie Refinery) is an optimized facility and it’s producing like we want it to be, then we’ll look at expansion,” MDU Resources public relations manager Tim Rasmussen said Thursday.

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Is the answer blowing in the wind?

Would you put a 350-foot wind turbine on your land?

That’s the question my dad was asked by a representative of NextEra Energy Resources not long after the company expressed interest in leasing a small corner of land in an area owned by our family about 2½ miles west of our farm.

The turbine would be part of the Brady Wind Energy Center II project NextEra plans to stretch across northern Hettinger County as a complementary project to the larger Brady Wind Energy Center I proposed for southern Stark County.

My dad promptly asked me the same question and others. “What do you know about the company?” And, “What do you think we should do?”

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62 miles of debate: Proposal to make Highway 85 four lanes through southern Bakken with excitement, questions

A semi truck hauling oil is followed by two vehicles on U.S. Highway 85 while going through the small town of Fairfi eld about 16 miles north of Interstate 94 on Saturday morning. A street sign denoting the highway was recently clipped by a vehicle and is now crooked.
A semi truck hauling oil is followed by two vehicles on U.S. Highway 85 while going through the small town of Fairfi eld about 16 miles north of Interstate 94 on Saturday morning. A street sign denoting the highway was recently clipped by a vehicle and is now crooked.

FAIRFIELD, N.D. — Joe Kessel is blunt when he talks about a proposed project that would make U.S. Highway 85 four lanes from Interstate 94 to Watford City, N.D.

“Why haven’t they got it done yet?” he asks with a hearty laugh.

The Billings County Commissioner lives a half-mile off the well-traveled Bakken Oil Patch thoroughfare only about four miles south of the McKenzie County line and said he deals with oilfield traffic every day. He even believes the drop in oil prices over the past year hasn’t created that much of a slowdown along the highway.

The public will get a glimpse of the 62-mile project proposed by the North Dakota Department of Transportation for the first time this week when public scoping meetings are held at 5 p.m. Monday at Belfield City Hall and at 5 p.m. Tuesday at Watford City City Hall.

Jamie Olson, the NDDOT’s public information specialist, said there’s no telling how long the four-laning process would take, but said it could last upward of a decade. There’s also no dollar amount attached to the project yet, as it must go through multiple approval steps first.

“It’ll take a long time once they complete that environmental (assessment) portion of it,” she said. “That’ll help to answer some of those questions: How long are we looking at? What are the options?”

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NextEra still searching for potential wind farm location in southwest ND

NEW ENGLAND — The company that withdrew its application to build a $250 million wind farm in eastern Stark County isn’t giving up on southwest North Dakota.

A spokesperson for Florida-based NextEra Energy Resources said Thursday that it is “looking at multiple options” in the area for a future wind project.

“That’s about as specific as I can be at this point,” Steven Stengel, NextEra’s director of communications, said Thursday in an email to The Press. He added that NextEra is continuing to speak with its stakeholders about projects that will address their concerns.

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