North Dakota blue hydrogen hub developers line up tribal natural gas supplier

The developers of a proposed North Dakota hydrogen hub have signed an agreement to source natural gas feedstock from one of the state's Native American reservations, a major producer of shale oil.

The memorandum of understanding positions the Mandan, Hidatsa and Arikara Nation — collectively known as the Three Affiliated Tribes, or MHA Nation — to be the sole gas supplier to the proposed low-carbon hydrogen facility. It also marks another key step for Bakken Energy and Mitsubishi Power Americas, the companies seeking to develop a hydrogen hub that can take advantage of natural gas output associated with North Dakota shale oil production.

The MHA Nation's Fort Berthold Indian Reservation is in the center of the prolific Williston Basin. The MHA Nation drilled the first tribe-owned oil wells in 2015, and the reservation was producing 299,000 b/d by the end of 2020, according to the US Energy Information Administration. Currently, output from the reservation accounts for about 20% of North Dakota production, according to a Feb. 9 email from Bakken Energy.

Reducing flaring

Like many US shale oil-producing regions, the reservation is seeking to utilize associated gas, rather than waste it through flaring, particularly amid closer scrutiny of planet-warming methane emissions.

Bakken Energy was originally formed to develop opportunities to produce value-added gas products in North Dakota and build infrastructure to transport them. It ultimately focused on blue hydrogen, which uses carbon capture technology to mitigate emissions from natural gas-based hydrogen production.

"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," Mark Fox, chairman of the MHA Nation, said in the statement.

North Dakota Gov. Doug Burgum also hailed the partnership's potential to reduce flaring, diversify the state's economy, create jobs and bolster US energy security.

Bakken Energy and Mitsubishi Power announced plans to develop the hydrogen hub in June 2021. Bakken Energy also announced in August 2021 that it had reached a deal to purchase a synthetic fuels plant outfitted with carbon capture technology near Beulah, North Dakota. Bakken Energy plans to convert the plant into the nation's largest low-carbon hydrogen production facility, with gross production capacity of 348,000 mt/year.

The project is slated for completion in 2027 at an estimated capital cost of $2 billion, according to the press release. Bakken Energy said it will endeavor to achieve a 96% carbon capture rate at the facility, an achievement that would make it a top-performing carbon capture facility. It would focus on supplying hydrogen to the upper Midwest, including to the transportation and agriculture sectors.

Bakken Energy CEO Mike Hopkins said the economics of the facility could help the US Department of Energy achieve its goal of reducing the cost of low-carbon hydrogen to $1/kg ahead of DOE's 2030 target. DOE has sought to include Native American tribes in the emerging hydrogen economy.

"The redevelopment gives us an unbeatable cost advantage which will enable the build-out of infrastructure that will benefit additional hydrogen production, including hydrogen from renewables, on our way to becoming the largest and lowest-cost producer of clean hydrogen in the country," Hopkins said.