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By Mike Nowatzki, Published November 29 2013

Oil boom means lots of jobs – and lots of flaring – for Three Affiliated Tribes

BISMARCK – The Bakken oil boom has brought jobs and prosperity to the Three Affiliated Tribes in northwestern North Dakota, but also a major challenge: The percentage of natural gas that’s being wasted through flaring is about twice the statewide average.

About 60 percent of the natural gas being produced as a result of oil activity on the Fort Berthold Reservation is being burned off, contributing to a statewide average of 29 percent, said Tex Hall, chairman of the Mandan, Hidatsa and Arikara Nation.

“Our flaring is way too high,” Hall said this week at the Bismarck Civic Center to a mandatory gathering of people from oilfield companies doing business on the reservation.

The Three Affiliated Tribes are studying ways to reducing flaring, including a possible natural gas processing plant, Hall said.

That and other oil-related developments – namely the Thunder Butte Petroleum Services oil refinery under construction near Makoti and a plan to franchise hotels, restaurants and convenience stores using the refinery’s name – will make the reservation even more of a hotbed for job-seekers, he said.

The Tribal Employment Rights Office Seminar & Expo earlier this week was mandatory for oil companies, contractors and subcontractors doing business on tribal land.

It also was a networking event for people looking for work on the reservation, which has hundreds of job openings related to the surge in oil and gas development, from oilfield service workers and truck drivers to accountants and welders, Hall said.

Oil production on the reservation in September accounted for 31 percent of the statewide daily average of 931,940 barrels, according to the most recent figures available from the state Department of Mineral Resources. Fort Berthold had 1,055 active wells in September and has the potential for an additional 2,314 wells, DMR Director Lynn Helms reported this month.

Tribal officials already are anticipating the need to expand the $450 million Thunder Butte refinery, which will have the capacity to process up to 20,000 barrels per day of Bakken crude when it begins operations in two years, Hall said. The first stage of the project, a facility that will load crude onto tanker trains, is expected to be operational next summer.

The refinery is expected to create 300 construction jobs and 75 to 100 full-time positions. Hall said tribal officials also are looking at developing a Thunder Butte franchise, starting with a truck plaza, hotel, restaurant and small casino at the Makoti site and eventually expanding those businesses – except the casino – to locations on and off the reservation. He said they’d like to see 50 to 100 franchise locations within the next five to 10 years.

“All of this is going to be a huge vantage point for more jobs,” he said.

Tribal members from other reservations in the region, including Standing Rock, Spirit Lake and Turtle Mountain in North Dakota, Fort Peck in Montana and Pine Ridge in South Dakota, also have found work at Fort Berthold Reservation, Hall said.

However, as in the rest of the Oil Patch, energy development has brought challenges as well as opportunities to the reservation, and flaring is a top concern.

Hall said the tribes’ management team and civil engineer are assembling a proposal for a natural gas gathering system and processing plant that would help address the problem.

“Obviously, we’ve got to get those numbers down, that 60 percent flaring,” he said.

One of the biggest challenges to curbing flaring, not only on the reservation but for the Oil Patch in general, is the lack of direct access to a natural gas processing plant, said Justin Kringstad, director of the North Dakota Pipeline Authority.

“And so companies are having to build pipelines to access that region, and so that’s where some of that delay is taking place in getting infrastructure built,” he said, adding the reservation’s remoteness and rugged terrain make it more difficult.