North Dakota

The Washington Post: North Dakota OKs Refinery Construction Near National Park

June 14, 2018
North Dakota OKs Refinery Construction Near National Park
By Blake Nicholson, Associated Press

BISMARCK, N.D. — North Dakota’s Health Department issued a permit Wednesday allowing construction of an oil refinery about 3 miles (5 kilometers) from Theodore Roosevelt National Park, a project opposed by several national and regional conservation groups.

The Davis Refinery still has other hurdles, but the permission to build that followed a 1 ½-year state review is a major victory for the project planned by Meridian Energy Group, based in California and North Dakota.

“The confirming review by the (state) was the most thorough review I’ve been involved with in my career,” Senior Project Manager Dan Hedrington said. Meridian CEO William Prentice said the state review “validates” work the company has done ensuring the plant will be “the cleanest refinery on the planet.”

Several groups including the Badlands Conservation Alliance doubt that. Executive Director Jan Swenson called it “a pretty sad day for the state of North Dakota.”

The National Parks Conservation Association, the Environmental Law and Policy Center and the Badlands Area Resource Council issued a joint statement Wednesday condemning the decision.

The permit decision can be appealed to the Health Department and then to state district court. Opposition groups said they were reviewing their options.

There is no state requirement for an independent review.

The state review included a public comment period that generated more than 10,000 comments. The review essentially concluded that the refinery will be a minor source of pollution and won’t negatively impact the park. However, after it’s built, it will need to obtain an air quality permit by proving it can meet state and federal air quality standards. Compliance will be continually monitored.

“Not only do we do routine inspections, we also require them to put continuous emission monitors on, and we can get that data at any time,” state Air Quality Director Terry O’Clair said.

Opponents worry about pollution in the 30,000-acre (12,000-hectare) park named for the former U.S. president who ranched in the region in the 1880s and is revered for his advocacy of land and wildlife conservation. The park is the state’s top tourist attraction, drawing more than 700,000 visitors annually.

Opponents also question Meridian’s production estimates. The company says the refinery will process about 27,500 barrels of oil daily, with a production capacity of 49,500 barrels per day — just under the 50,000-barrel threshold that triggers a siting review by the state’s Public Service Commission. The company denies trying to skirt state permitting law.

Supporters of the refinery point to its potential impact on the economy. It could create 500 construction jobs and permanent jobs for 200 people in the area, while generating millions of dollars in local property taxes each year. Early estimates were that it would cost more than $800 million to build, though the company has made changes in its plans since.

The project still needs a permit from the State Water Commission to use underground water for the refinery. Neighboring landowners are challenging a recommendation from the state engineer to approve the request. A hearing before an administrative law judge is set for October.

The project also needs a permit from the state Health Department to dispose of wastewater underground, a review process that could take up to six months. The company and state have discussed the permit but the company has not yet formally applied, according to the department.

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PRESS RELEASE: Air Permit Issued for Proposed Refinery Near Theodore Roosevelt National Park

FOR IMMEDIATE RELEASE

 

Air Permit Issued for Proposed Refinery Near Theodore Roosevelt National Park

Medora, ND – The North Dakota Department of Health (NDDoH) today announced it has issued a permit allowing construction of Meridian Energy Group’s proposed Davis Refinery to move forward, risking harm to nearby Theodore Roosevelt National Park. More than 10,000 people wrote to the agency about the refinery, the majority raising concerns against the proposal. National Parks Conservation Association, the Environmental Law & Policy Center and the Dakota Resource Council called the health department’s action a failure to protect Theodore Roosevelt National Park.

“We are deeply concerned about the impact of air pollution from the proposed refinery on Theodore Roosevelt National Park,” said Stephanie Kodish, Clean Air Program Director for the National Parks Conservation Association. “The park’s air quality is already hurt by pollution, limiting views, damaging ecosystems and making the air less healthy for visitors to breathe. The question is not whether this new source of pollution will do additional harm to the park – but rather how much.”

The Permit to Construct classifies the industrial refinery as a “minor” rather than “major” source of pollution, allowing it to bypass requirements to evaluate and use the best emission control technologies.

“The Clean Air Act has strict requirements for large new sources of pollution,” said Scott Strand, Senior Attorney at the Environmental Law & Policy Center. “The law requires the states to make sure that facilities with significant potential to pollute our air will have the best available pollution control technology in place.  Unfortunately, the state appears to be willing to let Meridian get by with its bland assurances that its emission controls will be good enough to meet the law’s requirements.”

The permit comes amid controversy over Meridian’s refusal to undergo siting review with the state’s Public Service Commission, which is required for refineries over 50,000 barrels per day. The NDDoH permit sanctions up to 55,000 barrels per day at the refinery.

The failure of the NDDoH to hold Meridian accountable for the company’s stated goal of 55,000 bpd means the North Dakota Public Service Commission’s responsibilities become even more critical. Local members of Badlands Area Resource Council (BARC), an affiliate of the Dakota Resource Council, are now asking the PSC to protect their land, water, air and quality of life by requiring Meridian to apply for a siting permit. Most BARC members live close to the proposed site. Linda Weiss, Chair of BARC said, “The placement of this refinery next to a Class I Air shed not only destroys the air quality today but will continue to destroy air quality for years to come. The cumulative air pollution from the many facilities in the industrial area will jeopardize health and safety of people who live here.”

The groups are carefully evaluating the permit to determine their next steps.

Theodore Roosevelt National Park stands as a testament to America’s conservation legacy and the very president who helped shape it. The park welcomed more than 700,000 visitors in 2017 who spent over $47 million in nearby communities, supporting over 550 local jobs.

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President Trump’s BLM Gutting Methane Standards Move is Wasteful, Misguided, and Unpopular

FOR IMMEDIATE RELEASE

Contact: David Jakubiak

President Trump’s Bureau of Land Management Gutting Methane Standards Move is Wasteful, Misguided, and Unpopular

Statement by Howard A. Learner

Executive Director, Environmental Law & Policy Center

“President Trump’s Bureau of Land Management is gutting the standards designed to reduce wasteful flaring of methane. That misguided action hurts people, wastes a resource and adds pollution. In a poll last year, 60% of North Dakota Republicans and 59% of independents supported strong standards to reduce flaring in federal and tribal lands. That’s common sense. An estimated $76 million in natural gas is flared annually on North Dakota’s public and tribal lands. Instead of wasting that resource, we should be advancing use of innovative technologies to reduce waste, keeping jobs and money in the state.”

ELPC’s Schmitz Represents NDARE at Briefing with Secretary of Energy

ELPC’s North Dakota-based Government Relations Specialist Mindi Schmitz, who also chairs the North Dakota Alliance for Renewable Energy (NDARE), participated in a clean energy business briefing with US Energy Secretary Ernest Moniz on April 26th in Washington, D.C. Schmitz attended the event at the invitation of the Pew Clean Energy Initiative.

Schmitz was one of nearly 40 business and clean energy leaders from 17 states in attendance at the briefing. In addition to the briefing, Schmitz met with staff from the North Dakota congressional delegation to reinforce the importance of renewable energy development in North Dakota and to discuss federal support for clean energy innovation.

Learner Op-Ed in Duluth News Tribune on Falling Oil Prices and Controversial Pipelines

Regional View: Falling Oil Prices A Game Changer for Midwestern Pipelines

By Howard A. Learner

February 29, 2016

Bakken shale oil and Canadian oil sands market prices are low, and oil production is falling. Enbridge Energy Partners just announced it is further delaying construction of both the controversial proposed new Sandpiper oil pipeline and the Line 3 replacement oil pipeline for two more years until 2019. Enbridge blamed the Minnesota Court of Appeals’ decision requiring an Environmental Impact Statement process be completed.

However, that’s likely only part of the story.

Pipeline companies are biting the bullet and deferring new projects because of oil price and production uncertainties. Before Enbridge Energy and its partners spend $2.6 billion to $3 billion on each of the Sandpiper and Line 3 replacement oil pipelines through northern Minnesota, they might pause and see whether oil prices stay low and production declines. Markets matter.

The market price for benchmark West Texas Intermediate crude oil is low at around $33 per barrel, having fallen from the $100 per barrel range in 2011 through mid-2014. JP Morgan forecasts West Texas Intermediate crude oil to average $31.50 per barrel in 2016, and Goldman Sachs pro-jects $40 per barrel. Analyst projections for 2017 through 2018 vary considerably. Low oil prices mean fewer rigs, less oil production, and less need for new pipelines.

Bakken shale oil’s break-even prices are around $40 to $45 per barrel, well above the current market price. Production costs vary depending on how rich the particular oil well is, the efficiency of the company’s operations, financing costs, and how close the rig is to infrastructure. Bakken shale oil must be transported by pipeline or rail to distant Midwestern or Texas refineries.

The number of active drilling rigs in North Dakota is the lowest since July 2009. There are now only 38 active rigs in the Bakken area, down from 204 rigs in February 2012.

According to North Dakota Department of Mineral Resources Director Lynn Helms, Bakken output fell to 1.15 million barrels a day in December 2015, down 6 percent below the all-time high in December 2014. Helms stated that oil production could fall to 1 million barrels per day by late 2016. Oil production and service companies are planning more layoffs, and there could be additional bankruptcies in June 2016 when banks often recalculate their debt limits for oil companies.

Unless and until West Texas Intermediate oil prices reach around $45 per barrel, the rig count and oil production will continue to decline in the Bakken shale oil region, meaning less demand for oil pipelines such as Sandpiper and crude shipping by rail. For example, Whiting Petroleum just announced that it will suspend its Bakken shale oil drilling projects due to low oil prices.

Canadian oil sands’ break-even prices for new production are around $80 per barrel for the “best of the best,” $90 to $100 per barrel for the “rest of the best,” and $100-plus per barrel for the “rest of the rest.” Canadian oil production likely will stagnate until global oil prices reach at least $80 per barrel. Some existing oil sands production operations have enormous sunk costs and might continue to operate as a long-term play as producers wait and hope for higher oil prices.  However, expect production to decline and no new oil sands production to start.

Less oil production means less need for new pipelines. Financing for new North American oil pipelines is drying up until bankers and other investors see oil prices rise, leading to more production. That’s the market situation facing Enbridge for its costly new Sandpiper and Line 3 replacement oil pipelines.

Oil prices have dropped dramatically over the past 15 months. That changed reality has unavoidable market consequences for both oil production and the controversial pipelines.

Howard A. Learner of Chicago is executive director of the Environmental Law & Policy Center, an advocacy organization for environmental and economic development with offices in Chicago, Duluth and other Midwestern cities.

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Getting Real About Oil Prices and Impacts on Oil Pipelines

Bakken shale oil and Canadian oil production is falling, and pipeline companies are now biting the bullet and deferring projects. Here’s an update on oil prices, Bakken shale oil, Canadian tar sands, and the impacts on oil pipelines in the Midwest. Markets matter.

Today, the Nymex market price for West Texas Intermediate (WTI) crude oil is $29.57/bbl. That’s low, and many analysts believe that WTI oil prices will stay below $50 bbl, or go even lower, during the next two years.

Bakken Shale Oil – Fewer Rigs, Less Production, Weakened by Today’s Market Prices: North Dakota’s Bakken shale oil’s break-even prices are WTI $45-$50/bbl for the most efficient producers and WTI $50-$60/bbl for the rest of the producers. That depends on how rich the well is, how costly and efficient the company’s construction and operations are, and how close the rig is to infrastructure. Then, the Bakken shale oil must be transported by pipeline or rail to distant refineries in the Midwest or Texas.

The number of drilling rigs now operating in North Dakota is the lowest since July 2009, and, as production ends at some existing rigs, the rig count will likely decline further. According to the North Dakota Department of Mineral Resources, Bakken output fell to 1.15 million barrels a day in December, down 2.5 percent from the previous month and 6 percent below the all-time high in December 2014. Department of Mineral Resources Director Lynn D. Helms stated that oil production could fall to 1 million barrels a day by the end of 2016. According to Helms, oil production and service companies are planning more layoffs in the first half of 2016, and there could be additional bankruptcies in June 2016 when banks often recalculate their debt limits for oil companies.

Unless and until WTI oil prices reach $50/bbl, the rig count and production will continue to decline in Western North Dakota’s Bakken shale oil region.

Canadian Oil Sands – New Production Not Economical with Today’s Market Prices: Canadian tar sands’ break-even prices for new production are around WTI $80/bbl for the “best of the best,” WTI $90-$100/bbl for the “rest of the best,” and WTI $100+/bbl for the “rest of the rest.” Canadian oil production will stagnate until WTI oil prices reach at least $80/bbl. Some current oil sands drilling and production operations have enormous sunk costs and will continue to operate as a long-term play as producers wait out what they hope will be higher prices in 2-3 years.

Less Oil Production Means Less Need for New Pipelines: Financing for new North American oil pipelines is drying up until bankers and other investors see WTI prices rise and thereby lead to more oil production. For example, Enbridge Energy Partners just announced that its Sandpiper Pipeline Project (running from Bakken shale in Western North Dakota through Grand Forks and Northern Minnesota to the oil refinery in Superior, Wisc.) and the Line 3 Replacement Program (running from Alberta through Eastern North Dakota and Minnesota to the oil refinery in Superior, Wisc.), which were originally scheduled for completion by 2017 and 2018, respectively, will both be held back as construction delays “cause a shift in the in-service dates to early 2019 and increase costs for the [Line 3 Replacement] and Sandpiper projects.”

That’s the market situation. As vehicle fuel efficiency (mpg) for North American cars and trucks continues to improve, that will reduce demand for gasoline, as will longer-term trends of Millennials driving less. We’ll see if low gas pump prices, on the other hand, continue and result in more vehicle miles travelled.

Please let me know if you have any questions or suggestions. Oil prices and markets have changed dramatically in the past 15 months, and the consequences for oil pipelines are significant.

Press Release: New York Times Names Theodore Roosevelt National Park a 2016 Top Travel Destination

FOR IMMEDIATE RELEASE

New York Times Names Theodore Roosevelt National Park a 2016 Top Travel Destination

ELPC Asserts Conservation Must be Priority for Park and Elkhorn Ranch Within

Jamestown, N.D. – The New York Times’ travel editors listed Theodore Roosevelt National Park near the top of its coveted annual list of the best places to visit on the planet in 2016. The park includes Elkhorn Ranch, which President Theodore Roosevelt built in the 1880s and is known as the “cradle of conservation” where he was inspired to establish many national parks, forests and monuments that became the foundation for the National Park Service.

“The Environmental Law & Policy Center is working to protect Theodore Roosevelt National Park’s scenic view and the historic Elkhorn Ranch from new gravel mines and oil well flaring that harms the natural landscape,” says Howard Learner, Executive Director of the Environmental Law & Policy Center, a Chicago-based non-profit. “The New York Times put Theodore Roosevelt National Park around the top of its must-visit travel list because it’s a special place that should be preserved for the 600,000 annual visitors to experience the beauty and quiet of this iconic American landscape.”

ELPC sued the U.S. Forest Service last fall in federal court on behalf of the National Parks Conservation Association for violating the National Environmental Policy Act when it approved a gravel mine within view of Elkhorn Ranch. The gravel pit owner has already begun digging at the site, creating noise and dust, even though the lawsuit is ongoing.

Meanwhile, the development of the Bakken oil fields near the park has led to the wasteful venting and flaring of natural gas in the area. While many have noted the lightening of the park’s night sky due to flaring, the proximity of the pollution coming from the flares also poses threats to the park’s signature plants and animals.

“The flaring and venting of natural gas resources takes needed tax revenue away from North Dakota’s coffers,” said Mindi Schmitz, government relation specialist with ELPC’s North Dakota office. “But flaring and venting in the backyard of Teddy Roosevelt National Park does even more damage — it threatens the experiences highlighted by the New York Times in naming the park one of the world’s must-see destinations.”

Soon the U.S. Bureau of Land Management is expected to release standards for the venting and flaring of natural gas on public lands. Strong standards could help boost North Dakota’s natural resource revenues while also offering additional protection for the park.

The National Park Service turns 100 this year.  In recent years, Elkhorn Ranch was named one of the 11 most endangered historic places in America by the National Trust for Historic Preservation.

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ELPC’s Efforts to Stop Mining at Teddy Roosevelt’s Historic Ranch Featured in the Daily Mail

Environmentalists are on a mission to stop a gravel mining project adjacent to Teddy Roosevelt’s historic Elkhorn Ranch in the Badlands of North Dakota from advancing any further.

Roger Lothspeich, of Miles City, Montana, and his fiancee, Peggy Braunberger, have spent more than six years proving they own the right to remove gravel and other surface minerals at the 5,200-acre ranch and the businessman began mining last month.

The National Parks Conservation Association took its case to federal court in Washington, D.C., on Friday seeking a motion to stop the U.S. Forest Service from allowing the mining project to continue.

Roosevelt, who was president from 1901 to 1909, set aside millions of acres for national forests and wildlife refuges during his administration. He spent more than three years in the North Dakota Badlands in the 1880s.

The Forest Service purchased the ranch next to Roosevelt’s Elkhorn Ranch site in 2007 from the Eberts family. It cost $5.3 million, with $4.8 million coming from the federal government and $500,000 from conservation groups.

The Eberts family had bought the ranch where Roosevelt ran his cattle and half the mineral rights from the Connell family in 1993 for $800,000.

Lothspeich, who grew up near the ranch, bought the other half of the mineral rights from the Connells at an undisclosed price, knowing the government had not obtained them in the Eberts deal.

Lothspeich signed an agreement with the Forest Service more than two years ago to work out an exchange for other federal land or mineral rights at a different location.

But he said the government was too slow in responding, and he decided to mine gravel at the site instead to take advantage of the growing need for roads and other projects in North Dakota’s booming oil patch.

‘There is a big demand for gravel, no question,’ he said.

Lothspeich said he plans to start gravel operations in the spring with about a dozen workers.

The Forest Service last January said it found no significant impact with the project, and last month it gave final approval for the plan and a 4-mile road to the mine. Lothspeich had crews digging at the site a day later.

‘He’s got a valid set of permits, and he went through all the steps,’ said Shannon Boehm, a Forest Service district ranger in nearby Dickinson said last month.

‘We’re holding him to the tenets of the approved operating plan.’

Conversationalists are arguing that the Forest Service violated the National Policy Act in approving the environmental assessment, according to Fox News.

The Chicago-based Environmental Law and Policy Center first filed the lawsuit in September. They want a more thorough environmental analysis of how the gravel pit affects the historic ranch.

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ELPC’s Work to Stop Mining at Elkhorn Ranch Highlighted in Fox News

In the Badlands of North Dakota, on the banks of the bubbling Little Missouri River, the fabled former ranch of Teddy Roosevelt has become a battlefield in the fight between industry and the conservationists who view the 26th president as their patron saint.

Hunters and environmentalists fear the 218-acre Elkhorn Ranch, which once belonged to the man whose passion for conservation changed the nation and helped land his face on nearby Mount Rushmore, could be forever marred by a mining project now under way on adjacent land. The opponents appear to be out of options, but still hope the rugged land that helped shape TR’s wilderness affection can be spared.

“He spent considerable time among the cowboys and ranchers and others in the West, and that gave him an entirely different perspective on what America is all about,” Roosevelt’s great-grandson Tweed Roosevelt told FoxNews.com. “It knocked out of him the East Coast snobbery and elitism approach that he had as a young man and turned him into a much more human person.”

The controversial gravel mining project could eventually span hundreds, if not thousands of acres, bordering the ranch, which became a western refuge for the bespectacled man who grew from sickly child to Harvard-educated war hero and symbol for American machismo.

The U.S. Forest Service purchased 4,400 acres, including the ranch, in 2007 as part of the Theodore Roosevelt National Park. The $5 million acquisition was aided by the Boone and Crockett Club, the venerable conservation organization founded by Roosevelt in 1887.

However, the government did not secure the mineral rights for the property, the majority of which were subsequently acquired by the Montana-based Elkhorn Minerals.

While the site where Roosevelt’s riverbank log cabin once stood lies within Theodore Roosevelt National Park and can’t be developed, the surrounding lands, under the jurisdiction of the U.S. Forest Service, are not similarly protected.

Roger Lothspeich, owner of Elkhorn Minerals, told FoxNews.com that despite opposition, he has no plans to stop the mining project, which began last month.

“There is a lot of gravel to mine,” he said. “I will keep on mining year after year, for years to come, and will not stop until I get all the gravel. That’s the type of individual I am. I just don’t give up.”

Lothspeich said he was willing to exchange land with the Forest
Service if there was a comparable place to mine nearby, but Forest Service officials said in a statement “a reasonable option could not be found.”

Environmentalists and historians still hold out hope the project can be halted by the courts. The National Parks Conservation Association, represented by the Chicago-based public interest law firm, Environmental Law and Policy Center, took its case to federal court in Washington, D.C., on Friday seeking a preliminary injunction stopping the U.S. Forest Service from allowing the mining project to go forward.

The Center argued that the Forest Service violated the National Environmental Policy Act in its approval of the environmental assessment. The judge’s ruling is pending.

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Star Tribune: Gravel Mining Begins Near Elkhorn Ranch as ELPC Works to Put on the Brakes

BISMARCK, N.D. (AP) — A Montana businessman began mining gravel Tuesday near President Theodore Roosevelt’s historic western North Dakota ranch, after an eight-year battle with U.S. regulators and amid an ongoing legal dispute with environmentalists.

“We’re finally good to go,” Roger Lothspeich told The Associated Press. “I am very happy and very, very pleased.”

The 25-acre mine site is about a mile from Roosevelt’s historic ranch cabin, which environmentalists have called “the cradle of conservation.”

The mine is being dug in a 5,201-acre ranch owned by the U.S. Forest Service that is next to Roosevelt’s Elkhorn Ranch site. Although the Forest Service owns the land, Lothspeich of Miles City, Montana, owns the mineral rights.

Lothspeich had been in a dispute with the Forest Service since shortly after Congress approved the government’s purchase in 2007 of the ranch in a deal worth about $5.3 million. More than 50 wildlife and conservation groups, including the Boone and Crockett Club started by Roosevelt himself, pressed Congress to approve the purchase.

Lothspeich spent years proving he owned the mineral rights and offered to sell them back to the government or to environmental groups that opposed his project. Lothspeich signed an agreement with the Forest Service three years ago to work out an exchange for other federal land or mineral rights at a different location. But he said the government was too slow in responding, and he decided to mine gravel at the site instead to take advantage of a growing need for roads and other projects in North Dakota’s oil patch.

The Forest Service in January said it found no significant impact with the project, and on Monday it gave final approval for the plan and a 4-mile road to the mine. Lothspeich had crews digging at the site a day later.

“He’s got a valid set of permits, and he went through all the steps,” said Shannon Boehm, a Forest Service district ranger in nearby Dickinson. “We’re holding him to the tenets of the approved operating plan.”

The Chicago-based Environmental Law and Policy Center in September filed a lawsuit on behalf of the Washington, D.C.-based National Parks Conservation Association challenging the Forest Service’s decision to approve the project, and wants a more thorough environmental analysis of how the gravel pit affects the historic ranch. The lawsuit is pending in federal court.

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