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ND tribe to get control of land for oil refinery

Thursday, 11 Oct 2012 | 8:58 AM ET

NEW TOWN, N.D. -- North Dakota's Three Affiliated Tribes will be getting control of land for construction of a proposed new oil refinery, U.S. Interior Secretary Ken Salazar said Wednesday.

Salazar's decision, announced during a news conference at the tribe's headquarters in New Town, means the tribe may begin construction of the $400 million refinery next spring, tribal Chairman Tex Hall said.

"It's the biggest economic project in the history of our tribe," Hall told The Associated Press. "We're really excited about this finally coming to fruition."

The tribe wants to use 469 acres of land near Makoti to build the refinery and produce feed for the tribe's buffalo herd. Makoti is a community near the northeastern corner of the Fort Berthold Indian Reservation, about 30 miles southwest of Minot.

Tribal officials asked the U.S. Interior Department nine years ago to put the land into trust, a process by which the agency will own the land and the tribe will control and manage it.

Salazar said Wednesday the agency had accepted the application and intended to put the land into trust.

As planned, the refinery will process about 20,000 barrels of oil daily into diesel fuel, gasoline, jet fuel, propane and naptha, Hall said. Propane is used for heating and cooking. Naptha is a solvent.

There is voracious demand for diesel fuel in western North Dakota's oil-producing region. Hall said the tribe's refinery should have a supply advantage because transportation costs of the refined diesel fuel will be lower, and the state's normal tax of 23 cents a gallon will not apply, because the fuel is being produced on tribal land.

In a statement, Salazar said the refinery would employ about 140 people. If constructed, it would be the first refinery built in the United States in more than 30 years, the interior secretary said.

"We are supporting infrastructure that will help bring American oil and gas to market while promoting tribal economic development and self-determination regarding land and resource use," Salazar said.