David Glatt, Section Chief of the North Dakota Department of Health, Environmental Health Section on the Davis Refinery Permit to Construct application:

“The State of North Dakota is committed to the health and economic welfare of its citizens. The North Dakota Department of Health Environmental Health Section is charged with making sure that projects such as Meridian Energy Group’s Davis Refinery meet stringent federal and state air quality emissions requirements. The proposed Davis Refinery air quality application is a top priority and the Department will work with Meridian through the application review process to ensure that the Davis Refinery meets federal and state air quality requirements.”

 

Davis Refinery Permitting Overview

  • Rezoning and Conditional Use Permits granted by Billings County in July 2016
  •  Water Appropriation Permit to State Engineer – Application pending, approval expected Summer 2017
  •  Permit to Construct (Air) – From ND Department of Health – Submittal October 2016; amended April 2017
  • Permit to Operate (Air) to be filed upon completion of Davis Light
  • Industrial Storm Water Discharge Permit – to be submitted in late summer/early fall 2017

Siting and Permitting

Overview The issue of whether Davis Refinery should be located at the current site was settled by the Billings County Board of Commissioners on July 6th, 2016. The community supports this location, and the logistics of crude supply and product sales support this location. Meridian is making it certain the Davis Refinery design meets all other permitting requirements, including those relating to obtaining the PTC as a Minor Source.

An application for rezoning and a Conditional Use Permit (the “CUP”) was submitted to Billings County early in 2016, and the Billings County Zoning and Planning Board unanimously recommended that the CUP be granted. On July 6th, 2016, the full Billings County Board of Commissioners approved the Company’s CUP application by a unanimous vote. The other major permit to be obtained prior to field construction is the Permit to Construct (“PTC”) to be granted by the Air Quality Division of the North Dakota Department of Health (“NDDH”). The PTC application was submitted to NDDH by Meridian on October 17th, 2016, and an amendment to the application was submitted on April 5th, 2017, which documentation demonstrates that the Davis Refinery qualifies as a Synthetic Minor Source. Because of this, Meridian believes that NDDH will certify that the Company’s PTC application is complete as soon as the NDDH review process begins, and that the PTC will be granted as soon as that review process is completed.

Design Impact of Air Quality Control Measures

The founders, investors and management team of Meridian have made it a principal objective of the Company that the Davis Refinery, when completed, will be the cleanest such facility on the planet, and the Davis Refinery has been conceptualized and designed accordingly. The Davis Refinery will be completed in stages – the initial Davis Light facility will only be a 27,500 bpd hydro-skimming plant. However, the Air Quality Division of the North Dakota Health Department (“NDDH”) instructed Meridian to submit its application for the air quality permit to construct (“PTC”) for the Full Refinery, and not in stages. Meridian has conducted significant engineering on the Full Refinery, including details regarding emissions control technology for all process units and ancillary facilities. A facility of the size of the Full Refinery would normally apply as a Major Source, but by utilizing the latest in hydrocarbon processing technology and instrumentation and controls systems, the Full Refinery will qualify for air quality permitting as a Synthetic Minor Source! The specific measures that have been incorporated in the design of Davis Light and Davis Full to achieve this milestone are set forth in the PTC Permit Application.

Design Impact of Water Supply and Wastewater Discharge Control Measures

The Davis Refinery will be the cleanest such facility ever built in terms of water as well as air quality! The Davis Refinery site is in an area that experiences less than 20 inches of rainfall annually, so availability of potable water is something that must be dealt with creatively by Meridian, not only in the context of arranging water supply, but in arranging the various water supply, treatment and discharge permits administered by various state and local agencies.

PSC Siting Certificate

The North Dakota Public Service Commission (“PSC”) requires that any oil refining or processing facilities that process greater than 50,000 bpd must obtain a Siting Permit before it can be constructed. Meridian has been advised that this Siting Permit only applies to the Davis Full facility, and not to Davis Light, which has a nameplate capacity of 27,500 bpd. The time line for obtaining this permit from the PSC has been included in the schedule for detailed design and construction of Davis Full, which will occur 18 – 24 months following the Davis Light completion.

The Environment

“Meridian Energy Group, Inc. is committed to building the cleanest refinery in the world, and has engineered Davis Refinery to the highest environmental standards, including the ability to meet the very strict Class 1 emissions standards which qualifies its proximity to Theodore Roosevelt National Park. Meridian has taken extensive measures to ensure that the Davis Refinery will not negatively impact the natural landscape of the surrounding terrain both during the day and at night, and has demonstrated that the Refinery will not be seen from the National Park.”