I’m having a hard time concentrating these days with all these whistles being blown in my ears.
My phone keeps ringing. People who work for Meridian Energy, or used to work for Meridian Energy, want to talk to me. So I listen. And I ask a few questions, about the status of that oil refinery Meridian says it is going to build someday beside Theodore Roosevelt National Park. And these nice people provide answers if they have them. But mostly they just want to talk to someone who’s interested in listening to their stories of disappointment about the company they work for, or used to work for.
I promise them all anonymity, of course, especially those still working for the company. When I wrote a while back about my suspicions of being set up after getting an e-mail with a virus in it, someone said, “Tell us who sent it and we can probably tell you if it was a setup or not.” But I couldn’t do that because I promised that person anonymity, too.
This week, it was a former employee, who gave only a first name (I’ll use Chris), and we talked for almost half an hour. I don’t need to ask for a real name or the rest of their name when these people call because through the magic of Google, all I have to do when we’re done talking is type in the phone number on my computer that showed up on caller ID and I can learn all about him or her. LinkedIn is always very helpful.
So just by knowing their phone number, I can learn who these people are, something about their backgrounds and generally that they are legitimate. Chris, my caller this week, worked for Meridian back in the early days but left after just a couple of years because he lacked confidence in the company. Chris is still involved in the energy industry, with a different company. “They were ambitious but never financially sound,” Chris told me. ” I could see the economics just didn’t work.”
“It was a great idea, but I quickly saw it was a nonstarter.”
Chris is not the first person to use the phrase “great idea.” Everyone who worked for Meridian agreed that the idea of building a clean refinery close to the source of oil sounded really good when they started. But the dreams for most faded pretty quickly — except for those who “drank the Kool-Aid” (another phrase I’m hearing pretty regularly) being served by the company’s president, William Prentice.
Chris thinks maybe the California attorney general (and I suggested the North Dakota attorney general as well) should be taking a really close look at the company as it continues to sell stock to unsuspecting investors, many of them elderly, from their boiler room phone bank in California. “We’re past point of this being a realistic operation — it’s now just fictional,” Chris says.
Chris, and the others I have talked to, all joined the company because they knew something about refineries, or oil, or finance, or something else that could help with construction and operation of a refinery. The idea of a “clean” refinery appealed to them. They were given reason to believe it could work in the early days of the company, back in 2015 and 2016. The North Dakota Health Department even believed them, issuing permits to go ahead and start the process of building a refinery.
The final approval will be a “Permit to Operate” from the Health Department when construction is complete. Everyone I’ve talked to believed that day would have come by now. But now, none of them believe it will come any time soon, if at all.
But I’ve told each of them, nobody here is going to take any chances on that. No one here is going to say “Ah, forget about Meridian, they’re never going to build a refinery.”
Because they might.
But meanwhile, people in the know tell me the Front End Engineering and Design, in industry parlance) has not progressed beyond where it was in early 2019. And that it could take three years to complete, although construction could actually start while that process is ongoing. Construction will take two years, I am told. But they say, none of it is being done because Meridian doesn’t have the money to pay the engineers, and in fact, Meridian hasn’t paid for work done so far.
So, if the company wants to hire new engineers, it is going to have to “show them the money” before any more work is going to get done. McDermott, the giant engineering firm hired to do the FEED, quit working last year has not been paid and has filed bankruptcy.
This past winte.r I talked with Greg Kessel, the Belfield, N.D., farmer on whose land the refinery is going to be built, if it is ever built, and he told me that it was his understanding, as a member of the Meridian board of directors, that the financing package from Morgan Stanley for the $900 million project was going to be in place in January. That hasn’t happened. I’ve called Morgan Stanley to ask them when it is going to write that check, and left a message, but it hasn’t called me back.
Construction season has arrived, but with the engineering and design work on hold, Kessel has gone ahead and disked up the site to keep the weeds down, so it doesn’t look like much is going to happen any time soon.
I also had one of my whistleblowers this week confirm that the “corporate offices” of Meridian Energy Group are indeed a couple of cubicles in Greg Kessel’s big steel building he built for his seed cleaning operation across the road from his farm and the refinery site, 13252 37th St. SW, Belfield. Stop in and say ”Hi” if you’re in the neighborhood.
I did have another conversation this week with the East Coast investor I visited with last month, who has sunk his entire 401(k) into Meridian stock, and he said he hasn’t heard much from the company, other than “they have changed engineering firms.” Uh huh.
In my conversation with Chris this week, he repeated the most common theme I’ve heard from everyone associated with the company: Why did Meridian insist on putting it so close to the national park? Everyone has pretty much agreed that a site 10 or 20 miles away would have made the path to construction much smoother. By locating it next to the park, Meridian has endured environmental challenges and two lawsuits, which certainly have affected its fundraising efforts.
Only one of my callers has been able to explain that: It’s there, he says, because Greg Kessel was willing to take a seat on the board of directors instead of asking for a couple of million dollars, which Meridian didn’t have, to buy the land. As a result, the company has raised $40 million or $50 million — about 5 percent of what it’s going to need — to build a refinery, and it still doen’t own any land to put it on. All the money, it looks like, has gone to pay corporate executives. As I wrote last week, the company has a president and twelve vice presidents, all drawing hefty salaries. That, says my caller Chris this week, is why the California attorney general ought to be investigating Meridian. I hope that happens.
So for now, I’m going to just work in the garden and keep my ears open for the sound of those whistles blowing. If I hear any more, I’ll let you know.