JIM FUGLIE: View From The Prairie — Refinery Company Slapped With $2 Million Lien For Nonpayment Of Bills

On Monday. I posted a story here about the financial woes of Meridian Energy Group, triggered by the filing last week of a huge construction lien against the company by one of its contractors. There were some things in it I just couldn’t figure out, and I probably should have held off for a day or two until I got to the bottom of them. So I took the story down.

I spent much of Monday trying to talk to principals in the story, leaving phone messages and sending e-mails, with little success. Finally, late in the day, I just yanked the story until I could figure it all out.

I’m still not quite sure I understand the whole story. It’s confusing, and the people involved in it don’t seem to want to talk to me. Not sure I blame them. I’ve been a little crabby lately. That happens when people start really, really messing with the Bad Lands.

The bottom line is this: Meridian Energy Group, the company that wants to put the refinery right next to Theodore Roosevelt National Park, has had a $2 million-plus mechanic’s lien slapped on it for not paying a contractor for the preliminary earth moving at what appears to be the refinery site west of Belfield. The bill was for $2,187,973.85.

In July 2018, Meridian signed a contract with a St. Paul company called SEH Design/Build, Inc., a subsidiary of the giant engineering and consulting firm Short Elliott Hendrickson Inc., for site design and construction services for the Davis Refinery. At that point, SEH appointed a fellow named Dan Hedrington as the project manager, and Hedrington took over a lot of the public relations duties for the project, serving as a media spokesman and public face for the project.

It was SEH that filed the lien against Meridian on Nov. 25. SEH has offices all over the country, mostly in the Upper Midwest. Meridian had bragged in its initial press release announcing the hiring of SEH that it had a Bismarck office, so I tried calling Hedrington at the phone number listed in the Bismarck phone book.

The lady who answered the phone appeared not to recognize the name Hedrington, which I found strange. After clearing up the fact — the phone call had “bounced” to the Minnesota office — she put me through to Hedrington’s phone extension somewhere, and I left a voice mail asking him to call me. Still waiting.

SEH had hired a subcontractor, Martin Construction of Dickinson, N.D., to do the dirt work on the land where the refinery is going to be built. Martin had scraped the topsoil from 100 acres or so (don’t ask me why) and used the dirt it excavated to build a 10-foot high wall around the planned refinery site. If you take a drive by the site today, you’ll see that what they’ve accomplished is creation of a hundred-acre weed patch.

I called Martin Construction and asked for Kurt Martin, the owner of the company, to ask him if he had been paid for the work he did, but he was out for coffee, and the lady in the office said she would give him my name and number and he might call me back. Still waiting.

I called Meridian’s PR firm in New York, Tall Grass Public Relations, a huge national PR company, to try to get a lead on someone in the company to talk to, and left a voice mail with the PR guy, Mark Hanes. Still waiting.

I did manage to talk briefly to a member of the Kessel family, on whose land the refinery is going to be built, but I didn’t learn much. I did find out, I think, that the Widow Kessel I mentioned in my story Monday is likely not going to be on the hook for the $2 million construction lien. Turns out the refinery site is on the other side of a prairie trail that runs between some Kessel properties. I guess Meridian wants her land for expansion, which is something it has promised not to do, in order to avoid a full site review by the Public Service Commission. I did not find out if Meridian was still making payments on the contract for deed it had signed with her to buy that land.

I did find out, however, that Meridian does not own the land across the road on which the dirt work was done. That land is owned by Greg Kessel, who is a member of Meridian’s board of directors. I asked Greg about the lien, which apparently is attached to his property, and he seemed unconcerned. He said it was his understanding that SEH was going to take stock in Meridian instead of payment for the work it did. I didn’t say it out loud, but I thought to myself “Now THAT is a bad idea.”

In the end, what’s most troubling to me is that Meridian has promised all kinds of good things in order to get its Air Quality Permit and to avoid a site review by the Public Service Commission. But a company stretched as financially thin as Meridian appear to be might be pretty tempted to cut corners on its emissions control equipment and to slip a few thousand more barrels of oil per day over its allowable limit, to squeeze out a few more dollars. I think the PSC and the North Dakota Department of Environmental Quality ought to be taking a second look at what they’ve agreed to allow Meridian to do.

Meanwhile, there are two lawsuits pending in front of the North Dakota Supreme Court filed by environmental organizations, one challenging the State Health Department’s issuance of the Air Quality Permit and the other seeking a full site review by the PSC. I’d expect the court to rule on those in early 2020. If it rules in favor of Meridian, then I suppose it’s full speed ahead. If they have the money to actually build a refinery. The latest official press release from Meridian says it plans to be operational by 2022. But I heard company CEO William Prentice say on the radio the other day it could be 2023. That’s five years behind their original schedule.

I think I’ll just keep checking with the Billings County Recorder to see if Meridian actually buys some land for the refinery. When I see its name on a warranty deed, then I’ll really be worried.

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