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JAMES MacPHERSON

Associated Press

Natural gas that’s being burned off and wasted as a byproduct of oil production on an American Indian reservation in North Dakota will be used as a feedstock for a proposed plant to produce carbon-free hydrogen, state and industry officials announced Feb. 9.

Bakken Energy and Mitsubishi Power Americas announced a memorandum of understanding with the Mandan, Hidatsa and Arikara Nation to be the natural gas supplier for its Great Plains Hydrogen Hub in western North Dakota. Terms of the deal were not disclosed.

The $2 billion project was announced in June to produce clean hydrogen, which has a variety of uses including powering vehicles and energy generation. Republican Gov. Doug Burgum has hailed the project a key part of the state’s plan to become carbon neutral by 2030.

Owners of the hydrogen hub are seeking a $1 billion loan from the Department of Energy for the project. North Dakota is already heavily invested in it. The state’s Industrial Commission, headed by Burgum, approved a $10 million state grant and $80 million loan for the project in December.

Gas from Fort Berthold

MHA Nation Chairman Mark Fox said in a statement that using natural gas from the tribes’ Fort Berthold Reservation, which accounts for about a fifth of North Dakota’s oil production “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.”

Flaring is the practice of burning off natural gas at an oil well site, creating carbon dioxide emissions that worsen global warming.

North Dakota’s oil industry has struggled for years and spent billions of dollars to build the infrastructure needed to curb flaring. In 2014, when more than one-third of that gas was being burned off, state regulators began requiring oil companies to limit flaring to no more than 15% by 2016, and to 10% by 2020. The national average for flaring is less than 1%.

Outside of the Fort Berthold Reservation, about 94% of natural gas is being captured at present, state data shows. Gas capture on the reservation is pegged at 93%.

In a statement to The Associated Press, Bakken Energy CEO Mike Hopkins would not estimate how much the reservation’s gas capture might increase.

“The plan is to materially mitigate flaring,” he said.

Blue hydrogen

The hydrogen hub is being built at the site of a long financially troubled synthetic natural gas plant in western North Dakota, and about 30 miles from the Fort Berthold Reservation’s southern boundary.

Officials have said the hub will consist of facilities that produce, store, transport and consume the carbon-free fuel. The hub will focus on the production of blue hydrogen, which is derived from natural gas with the carbon dioxide emissions captured, and sequestered underground or used for enhanced oil recovery.

The hub is expected to go online in 2027 and would initially use natural gas from the synfuels plant, and then switch to the natural gas produced on the reservation, officials said.