Judge will review complaint over refinery near national park

North Dakota regulators are enlisting an administrative law judge to help untangle some of the legal questions surrounding whether an oil refinery can be built near Theodore Roosevelt National Park.

The Public Service Commission on Wednesday voted 2-1 to have the state Office of Administrative Hearings designate a judge to make a non-binding recommendation on whether a complaint over the $800 million Davis Refinery should be dismissed.

The judge won't weigh in on whether Meridian Energy Group can build at the site 3 miles (5 kilometers) from the park, but his recommendation could make it more difficult for the company to do so.

Meridian in July began site work for the refinery it hopes to begin operating in 2020, after obtaining permission from the state Health Department to begin building. Meridian maintains the plant will have modern technology and will be "the cleanest refinery on the planet," and supporters say it will boost the area's economy.

Opponents fear pollution from the refinery will mar the park's scenery and erode the air quality at the state's top tourist attraction. The refinery faces several hurdles, including legal challenges of a state air quality permit and a local zoning permit.

The Environmental Law and Policy Center and the Dakota Resource Council in late June also filed a complaint with the PSC, maintaining Meridian needs a site permit because the refinery's capacity will be 55,000 barrels per day — above the threshold of 50,000 barrels in state law that triggers a PSC review. The groups cited a number Meridian has previously given to the media, investors and government officials.

Meridian maintains the figure is outdated and that the company's current plan is to build a facility capable of processing only up to 49,500 barrels per day — just below the threshold. Meridian has asked the PSC to dismiss the complaint, arguing that the commission has no authority under state law to wade into the dispute.

The environmental groups dispute that, raising the question of whether the PSC has the authority to determine its own jurisdiction. They also question whether Meridian is planning a "bait and switch" in which it builds a refinery and then applies for permission to expand beyond the state threshold after the plant is already in place. The company denies that.

Commissioner Julie Fedorchak said the PSC wants input on the complex legal issues from an administrative law judge. The commission will then decide whether the complaint goes forward. If it does, the next decision would be whether Meridian needs to seek a state permit to build at the site, a process that involves public hearings and can take half a year or longer to complete.

In the meantime, the two environmental groups have asked the PSC to order that Meridian stop work at the site. The commission will not address that request until after the administrative law judge is done with his work, Fedorchak said.

Meridian said in a statement that it is "highly confident" it will prevail in its legal battles and that "all other aspects of the Davis Refinery are proceeding according to schedule, including site preparation work."


Follow Blake Nicholson on Twitter: https://twitter.com/NicholsonBlake