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Feds OK tribal refinery: Work could begin as early as next spring

NEW TOWN -- Plans for an oil refinery on the Fort Berthold Reservation, the first major refinery to be built in the United States in more than 30 years, cleared a milestone Wednesday.

Secretary of the Interior Ken Salazar announced Wednesday approval of an application from the Three Affiliated Tribes of the Fort Berthold Reservation for the refinery.

The tribes requested that the Bureau of Indian Affairs accept a 469-acre piece of property into trust, a key step to let the refinery project move forward.

"This is a historic day," Salazar said from the Mandan, Hidatsa and Arikara tribal headquarters. "It is the manifestation of the president's efforts to make sure that we are respecting and empowering tribal communities across our country."

The tribe can now proceed with financing the project, which will be called Thunder Butte Petroleum Services. It is estimated to cost $350 million to $400 million, said Richard Mayer, CEO of Thunder Butte Petroleum Services.

Construction on the facility could begin as early as next spring and is estimated to take 12 to 18 months, Mayer said.

Project developers of the refinery estimate it could create 800 to 1,000 construction jobs, up to 140 operations jobs, and millions in annual revenue to benefit the Mandan, Hidatsa and Arikara tribes and surrounding communities.

The 13,000 barrel-per-day facility would refine Bakken crude oil into products including diesel fuel and propane.

It eventually would have a capacity of up to 20,000 barrels per day, with the diesel staying in North Dakota, Mayer said.

The proposed refinery would take up about 190 acres of the 469 acres near Makoti, which is about 35 miles east of New Town. The remaining acreage would be used for the production of feed for buffalo, according to a news release.

Tex Hall, chairman of the Three Affiliated Tribes, said steps to build a refinery on the reservation began 10 years ago with the application for some seed money.

The original concept for the refinery was to process Canadian tar sands, Hall said. The plans were later changed to process Bakken crude. The Fort Berthold Reservation has now more than 700 producing wells.

"We didn't know the Bakken was going to be here and to this degree," Hall said.

The permitting process took extensive work, but the proposal cleared another major hurdle in July when the Environmental Protection Agency approved a discharge permit, Hall said.

"I grew up learning to never trust the government and here we are celebrating with the government today," Hall said.

Tribal Economic Development bonds, tax-exempt borrowing created by the Stimulus Act, will fund the project, Hall said.

The last major refinery built in the lower 48 states of the United States began operating in 1977 in Garyville, La., according to the U.S. Energy Information Administration.

North Dakota produces about 700,000 barrels of oil per day.

The Tesoro refinery in Mandan is currently North Dakota's only refinery. It expanded to process 68,000 barrels per day this year.

There are two other refineries being proposed in North Dakota, one near Dickinson and one near Trenton.

Principal Deputy Assistant Secretary for Indian Affairs Del Laverdure and Bureau of Indian Affairs Director Mike Black joined Salazar for the announcement.

Black said he's been involved with the refinery proposal for five years and it's been a lengthy process.

"I'll be honest with you, I didn't know that I'd ever see this day come," Black said. "This is something that's monumental, not only for the tribe, but for the whole North Dakota state."

Amy Dalrymple

Amy Dalrymple is a Forum News Service reporter stationed in the Oil Patch. She can be reached at or (701) 580-6890.