Engineering News

EPA Nearing Decision on ND Refinery
February 12, 2009

A final environmental document for an oil refinery on the Fort Berthold Indian Reservation -- the country's first new oil refinery more than 30 years -- will be released by June.

The Environmental Protection Agency's Region 8 project director says a final Environmental Impact Statement is just three months from being released, and one of the main decisions will be whether to issue a water discharge permit for the facility.

The Fort Berthold Indian Reservation has been working for years to construct a 15,000-barrel-daily refinery on the northeast edge of the reservation, tapping into a tar sand pipeline from Canada.

The EPA issued a draft environmental statement three years ago, and the clock is ticking, since a supplement can be required if three years go by without a final statement.

EPA's Region 8 project director Steve Wharton said the agency will meet the deadline, but the review has been "protracted."

The release of the final document will trigger a 30-day comment period, another review and a record of decision, possibly before the end of the year.

Wharton said the proposed refinery, billed as a clean fuels project because it will use synthetic oil that's already been partly refined in Canada, is a "very novel project."

"It's the first refinery that will be built from the ground up (in decades), and there have been a lot of regulatory changes, particularly in air emissions," Wharton said.

As an example, the agency is looking at the project's impact on climate change and global warming.

"It will have some greenhouse gas, but in the very large scheme of things, it's not possible to predict the local impact of climate change in North Dakota," Wharton said.

Another factor is the location of refinery inside a reservation, requiring a cooperative review with the Bureau of Indian Affairs.

Three Affiliated Tribes' energy director, Fred Fox, says the tribes will proceed with the project if it gets EPA clearance and a BIA decision on whether the land where the refinery would be built can be converted into trust land.

For now, the 470 acres the tribe purchased for construction are fee land, which would be subject to state taxes. It would be tax exempt if the BIA agrees to make it trust land.

The refinery would cost at least $250 million and there's some concern that it's too small -- about one-tenth the capacity of most refineries -- to be economically viable.

Ron Ness, president of the North Dakotas Petroleum Council, says it could work if the tribes can get government fuel contracts for military bases and other government agencies under a federal preference program. Ness says there's no other way a small refinery can be successful in a highly competitive industry.

Source: The Bismarck Tribune, N.D.

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