ADVERTISEMENT

ADVERTISEMENT

North Dakota hydrogen hub developers enter agreement with MHA Nation for natural gas supply

The two companies behind a $2 billion proposed hydrogen hub in central North Dakota said they plan to source all of the natural gas needed for their project from beneath the Mandan, Hidatsa and Arikara Nation's Fort Berthold Indian Reservation.

0629-n-flaring1.jpg
Natural gas is flared on the Fort Berthold Indian Reservation in North Dakota.
Forum News Service file photo
We are part of The Trust Project.

BISMARCK — Companies seeking to develop a $2 billion hub for hydrogen energy in central North Dakota are planning to draw 100% of the natural gas needed for their project from beneath the reservation of the Mandan, Hidatsa and Arikara Nation. 

Developers Bakken Energy and Mitsubishi Power Americas announced Wednesday, Feb. 9, that they have entered into a memorandum of understanding with the tribe, whose Fort Berthold Indian Reservation in northwest North Dakota accounts for close to a fifth of the state’s oil production, to supply all of the natural gas needed to manufacture their hydrogen energy.

In a statement alongside company executives, Chairman Mark Fox said the tribe is excited to be a part of a “world class clean hydrogen development” and promoted the partnership as a step toward eliminating the reservation's natural gas flaring, a wasteful practice that also drives planet-warming carbon dioxide emissions in the North Dakota oil fields.

“Natural gas from the Fort Berthold Indian Reservation will enable the clean energy we need to save our planet, and in the process will allow us to put in place the infrastructure needed to end the excessive flaring of natural gas on our lands, improving the quality of life of our members,” Fox said.

The hub in development by the Bismarck-based Bakken Energy and Mitsubishi would retrofit a financially troubled synthetic natural gas plant near Beulah to manufacture so-called “clean” hydrogen energy. The project aims to be one of the largest manufacturers of clean hydrogen in the country, with commercial operations slated to begin in early 2027.

ADVERTISEMENT

A relatively untapped energy source in the United States, hydrogen has drawn hype recently as a possible clean fuel for power generation and transportation. Bakken Energy and Mitsubishi are focused on manufacturing hydrogen using natural gas as the primary ingredient and burying carbon dioxide emissions that result. This process is used to create what’s known as “blue hydrogen" — as opposed to “green hydrogen" which is manufactured with renewable energy sources like wind and solar.

Bakken Energy CEO Mike Hopkins said in a statement that previous plans to transport natural gas to the Beulah plant by repurposing the existing Souris Valley carbon dioxide pipeline have not changed, adding that "the plan is to materially mitigate flaring." Hopkins declined to provide specifics on the terms of the agreement with the MHA Nation or its implications for other parties involved in oil and gas production on the reservation.

Plans to repurpose the Souris Valley Pipeline for natural gas delivery could contradict an aim of the North Dakota oil industry, which has expressed hopes of piping carbon dioxide to the oil fields to juice the production of declining wells.

North Dakota Petroleum Council President Ron Ness said the pipeline that Bakken Energy is looking to repurpose is a key piece of that ambition. "If (the pipeline) is part of the discussion, we're gonna have questions, certainly, about that," he said. "That's a critical piece of infrastructure."

While Ness said the Petroleum Council supports efforts to find new uses for natural gas, he added that the implications of Bakken Energy's plans to the North Dakota oil industry should be taken into account, noting significant state funding earmarked for the venture. Bakken Energy was recently awarded $10 million in grants and $80 million in low-interest loans through a newly established state board aimed at curbing energy industry emissions.

Hopkins said Bakken Energy has heard from the Petroleum Council about the pipeline and is open to discussing the project with outside groups after they have had a chance to meet with employees at the Beulah plant.

Justin Kringstad, the director of the North Dakota Pipeline Authority, said plans to locally source the hydrogen hub's feedstock could be an important step for addressing a mounting natural gas challenge in the North Dakota oil fields.

North Dakota oil producers have historically burned off natural gas at higher levels than other oil and gas producing states. Kringstad noted these flaring challenges are only expected to grow in the Bakken as maturing oil wells produce more and more gas.

ADVERTISEMENT

“This, to me, is an encouraging sign as one piece of that bigger picture” needed to find “a local home” for natural gas produced in the North Dakota oil fields, he said.

The hydrogen hub plans to draw around 140 million standard cubic feet of natural gas per day, according an application Bakken Energy submitted for state funding last year, accounting for a volume roughly on par with the amount of gas that North Dakota producers flared in recent months. Flaring is scattered throughout the North Dakota oil fields, meaning that a single project like Bakken Energy’s would not directly offset the state’s diffuse flaring problem, Kringstad noted.

Due to limited natural gas infrastructure on Fort Berthold, flaring has posed a particular challenge on the reservation. Last November, the most recent industry data available, producers on the reservation cleared the state’s goal of capturing 91% of natural gas on average, though some areas of the reservation still fell far below that regulatory standard.

Gov. Doug Burgum endorsed the tribal-company partnership on Wednesday, saying the plans will “add value to North Dakota’s abundant natural gas resources while also advancing our shared goal of reducing flaring.”

Company executives have said they are looking to fund much of the project through a U.S. Department of Energy loan guarantee program. Hopkins said Wednesday that the company expects to submit the first part of an application for federal funding later this month.

Readers can reach Forum reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com.

What to read next
North Dakota now captures 95% of natural gas, the vast amount of which comes from oil wells, but still stands out as a major source of flaring, which releases climate-warming methane.
A North Dakota Department of Transportation employee was seriously hurt last week when he was hit by a car while repairing a cable median barrier.
Review by North Dakota's assistant Attorney General found no wrongdoing
Christopher Thompson is accused of driving under the influence when he crashed into a tree last month. The crash killed Red River Valley Sugarbeet Growers Association Treasurer Jason Schatzke.