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North Dakota tribesí oil output rivals US states
AP via Fuel Fix ^ | April 23, 2014 | Josh Wood

Posted on 04/23/2014 6:39:04 AM PDT by thackney

Oil production on the Fort Berthold Indian Reservation in North Dakota has become so large that it would rank among the top 10 oil producing states in the nation, a tribal leader said Tuesday.

Tex Hall, chairman of the Three Affiliated Tribes — Mandan, Hidatsa and Arikara — said the more than 1,000 wells in the Fort Berthold Indian Reservation produce in excess of 180,000 barrels of oil a day. Compared directly with state production, that puts them among the top 10 oil producers in the nation.

“It’s a modern day gold rush. It’s a modern day Deadwood, South Dakota,” he said in a video statement that was broadcast at the tribe’s third annual oil and gas expo at the 4 Bears Casino in New Town, North Dakota.

The tribe’s production levels represent about one-fifth of the total oil output in North Dakota, which is ranked second in oil production, trailing only Texas. North Dakota is poised to hit production levels of one million barrels of oil per day by June.

In January, wells on the Fort Berthold Indian Reservation produced more than 162,000 barrels of oil per day, according to the latest production figures available on the tribes’ website. That figure was higher than production in Kansas, which is the 10th biggest oil-producing state.

Hall did not say how much money the tribes have made from the oil production, but North Dakota state Tax Department records show that the tribe received $131.8 million in fiscal 2013 as its share of revenue under an agreement with the state.

(Excerpt) Read more at fuelfix.com ...


TOPICS: News/Current Events; US: North Dakota
KEYWORDS: bakken; energy; oil
excerpted for AP content
1 posted on 04/23/2014 6:39:05 AM PDT by thackney
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To: thackney

NICE, I think the takeaway is that if you drill for oil, you produce more oil. I think it would follow that increased supply would lower prices.


2 posted on 04/23/2014 6:42:59 AM PDT by 1Old Pro
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related past news:

Ground broken for oil refinery on ND reservation
http://www.freerepublic.com/focus/news/3017797/posts
May 10, 2013

- - - - -

Her opposition to the refinery, which initially proposed to process Canadian oil sands but later changed to Bakken crude, led to an increased awareness of energy impacts as oil activity ramped up in North Dakota.

Bird Bear lives in rural Mandaree along a busy highway for oil and gas development. She bought a digital camera and started carrying it with her to document spills she would observe while driving to and from town.

- See more at: http://oilpatchdispatch.areavoices.com/tag/fort-berthold/#sthash.vudLUcOk.dpuf


3 posted on 04/23/2014 6:44:04 AM PDT by thackney (life is fragile, handle with prayer)
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And not just oil:

Three Affiliated Tribes planning natural gas plant
http://bismarcktribune.com/bakken/three-affiliated-tribes-planning-natural-gas-plant/article_0f1ace66-561b-11e3-a197-001a4bcf887a.html
November 25, 2013

Tribal Chairman Tex Hall said the tribal council is considering potential gas plant locations best for gathering the fuel and determining what size of plant would be needed to serve gas production on the reservation.

The gas plant is among several other changes related to the oil and gas industry on the reservation being discussed at the Mandan, Hidatsa & Arikara Tribal Employment Rights Office Ordinance Seminar & Expo held in Bismarck on Monday and today.

Hall said he expects the project to cost between $200 million and $300 million. He said the council is working on obtaining funding for the plant.

About 55 percent of natural gas produced on the Fort Berthold Indian Reservation is being flared, said Steven Gundersen, president of Tallsalt Advisors, a financial advisory firm contracted by the tribe to audit oil royalties on wells with tribal interests.


4 posted on 04/23/2014 6:46:27 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
The Mandan, Hidatsa and Arikara (or more correctly, what is left of them) were displaced from fertile bottom lands to build the Garrison Dam on the Missouri River in the 1950s. What was once their land is underwater now.

Unlike their Sioux cousins, they've been farming almost ever since they arrived in what is now North Dakota from the Ohio River Valley in the 14th century and, as a result, were not dependent on government money. I wish them well.

5 posted on 04/23/2014 6:47:52 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: thackney

Hmmm, perhaps we need to give more of the Federal land to the tribes? They seem to understand something our Marxist Overlord doesn’t.


6 posted on 04/23/2014 7:21:55 AM PDT by BlueStateRightist (Government is best which governs least.)
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To: thackney
9818 ND wells producing in 2014 https://www.dmr.nd.gov/oilgas/stats/historicaloilprodstats.pdf

the more than 1,000 wells in the Fort Berthold Indian Reservation produce in excess of 180,000 barrels

They have ~10% of the wells and produce ~18% of the oil in North Dakota?

7 posted on 04/23/2014 7:26:04 AM PDT by DUMBGRUNT
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To: DUMBGRUNT

Until Obama sends in the Cavalry


8 posted on 04/23/2014 7:41:56 AM PDT by molson209 (Blank)
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To: Vigilanteman
Unlike their Sioux cousins, they've been farming almost ever since they arrived in what is now North Dakota from the Ohio River Valley in the 14th century and, as a result, were not dependent on government money.

They do everything better than the Sioux to the point that I think it is more racial than anything else.

My opinion, as well as others, is that the three tribes are racially more white (probably French) than Indian.

If you drive from reservation to reservation in ND (they are not that far apart) the difference is stunning.

The Sioux reservations look like well, reservations, with broken down housing and trash strewed everywhere. Fort Berthold mostly looks like any booming small town.

9 posted on 04/23/2014 7:42:14 AM PDT by Last Dakotan
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To: Vigilanteman

If Harry Reid or his family doesn’t own land there, they may be alright.


10 posted on 04/23/2014 7:46:27 AM PDT by morphing libertarian
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To: thackney

This is something I know a little about.

They need $300M. Plant’s going to make money, but there’s a risk it won’t. If the affiliated tribes have a constitution similar to the ones in most tribes, the land the rez is on can’t be sold.

As such, if you are a bank, the loan becomes uncollateralized. There’s no land you can sell or develop to make the bank whole. I checked with BIA, and there are very limited guarantees the USG will give banks making loans on the rez.

Enter Sovereign Immunity.

Say the tribe decides not to pay the bank back, even if the plant is built and making money. Jurisdiction belongs to the tribes court system, not federal court, unless your contract with them stipulates specifically the final arbiter is the feds.

Easy enough, right? Nope. The Nations are INCREASINGLY sensitive to encroachment of their sovereignty by the USG. Their hope is to make their own courts impartial enough to entice corporations to use their courts. Tough sell.

As such, consider the Nations to be foreign countries right here in the US. You’d think, as you consider building new plants in foreign countries, that perhaps the Nations might be the place you look first. This activity is called Foreign Direct Investment (FDI).

There’s the problem of bond holders status and non-tribal members holding stock in tribal corporations. You can do it, hold stock, but there are almost zero tribal corporations that have issued stock, and none have gone ‘Public’.

So, you have this literally perfect fascism that is happening on reservations - the Tribal state owns all corporations. There are companies that lease space and operate on the Nations, but there are no foreign owned companies. The land, you see, and IMPROVEMENTS THEREON, are all owned by the tribe. Unless the tribe builds it, you aren’t going to get your facility. Your builders can work as subs, generally, to tribal general contractors, but in the end the improvements are theirs, not yours.

The Tribes could be kicking the crap out of the rest of the US, and due to treaties and court decisions they have monopoly power over some industries like logging and fishing in some areas. Tribal chairman have secretly admitted that ‘jobs’, as an inducement, is completely ineffective. There’s a job for every tribal member, but they can’t get them to take one.

A direct quote from one chairman, “The worst thing the red man did was accept help from the US Government. It ruined us.” This is a guy with a painting of Obama in a ceremonial headdress in his office.

Harvard Business School, back in the day, used to do some pretty good business case study work. Not anymore, but they used to be pretty good at it.

The Nations, and FDI, would be a CLASSIC case study in how the three-point test of a market economy stands up to the real business world.

To have a market economy (a free one), you need:

1. The ability to enforce your contracts in impartial courts of law, the decisions of which have a credible chance of being enforced.

2. The people have to have the right to own property.

3. The people have to have the ability to speak and assemble freely.

This is like the fire triangle - take one element away and there’s no flame.

It would be instructive to apply these tests to the US at this point. I think we’d fail those tests, unless you have the USG as your number one client (banks, oil, airplanes, cars)


11 posted on 04/23/2014 7:58:46 AM PDT by RinaseaofDs (.)
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To: thackney
US Oil Production last 25 years:


12 posted on 04/23/2014 8:05:40 AM PDT by Wyatt's Torch
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To: DUMBGRUNT

They probably have a higher percentage of the newer wells and a lower percentage of the older.

Keep in mind there are a lot of low producing older wells in North Dakota from before the horizontal drilling advancements.


13 posted on 04/23/2014 8:05:59 AM PDT by thackney (life is fragile, handle with prayer)
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To: RinaseaofDs
North Dakota state Tax Department records show that the tribe received $131.8 million in fiscal 2013 as its share of revenue under an agreement with the state.

I would think a Bank could accept this revenue stream as collateral.

14 posted on 04/23/2014 8:08:34 AM PDT by thackney (life is fragile, handle with prayer)
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To: Wyatt's Torch
For a longer term:

Image and video hosting by TinyPic
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

15 posted on 04/23/2014 8:11:21 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

Yep. Major improvement from the bottom in the mid-2000’s. Long way to go to peak in 1970. But the takeaway is that we have increased production by over 50% in the last 10 years.


16 posted on 04/23/2014 8:18:44 AM PDT by Wyatt's Torch
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To: thackney

It’s the ‘agreement with the state’ part that’s the collateral.

There was an article in the WSJ about a month and a half ago about the epic crash of a casino project in MA. Banks backed the tribes to build the thing on the ‘stream of revenue’ come line. No collateral.

Banks ended up, literally, with nothing. Not many new casinos under construction right now on rez’s as a result.


17 posted on 04/23/2014 8:20:24 AM PDT by RinaseaofDs (.)
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To: Wyatt's Torch

And mostly from just a few states making the change.

Texas producing 36 percent of US crude
http://www.freerepublic.com/focus/f-news/3140043/posts

Five states and the Gulf of Mexico produce more than 80% of U.S. crude oil
http://www.freerepublic.com/focus/f-news/3139399/posts


18 posted on 04/23/2014 8:21:42 AM PDT by thackney (life is fragile, handle with prayer)
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To: RinaseaofDs

But that stream of revenue is not dependent upon the project succeeding. That revenue stream already exist today. It is completely separate from the refinery.


19 posted on 04/23/2014 8:22:50 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney
I'm glad for them, but will the influx of $$$$ improve the villages or just buy more alcohol & heroin? Most villages that we have lived near; all village members were corrupt once they became village leaders; had access to the checkbooks.

They all want to live in the village, traditional lifestyle, but no economic base in the village. The smart ones leave for Fairbanks, training, and good jobs; but lose their culture. Some refuse and live off what the land and river provides, and small few hundred dollar checks from govt & corporation.

Be great if they were able to develop some economic future for the reservation with the wind fall rather than just more social dysfunction from alcohol & drugs. Good bunch of people, going extinct from modern day genocide of booze.

20 posted on 04/23/2014 8:24:29 AM PDT by Eska
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To: Eska; Last Dakotan

From post #9
http://www.freerepublic.com/focus/news/3147639/posts?page=9#9

If you drive from reservation to reservation in ND (they are not that far apart) the difference is stunning.

The Sioux reservations look like well, reservations, with broken down housing and trash strewed everywhere. Fort Berthold mostly looks like any booming small town.

- - - - -

And it sounds like with the building of a small refinery and gas processing plant, they are building for the future as well.


21 posted on 04/23/2014 8:28:20 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

I thought the white man already stole all their land. If not the Obama administration will find some snail to protect in order to prohibit drilling.


22 posted on 04/23/2014 8:29:32 AM PDT by McGruff (You believe what your government tells you. Don't you?)
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To: Eska

Perhaps the Three Affiliated Tribes are more like ASRC than Hän.


23 posted on 04/23/2014 8:30:44 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

It will be interesting to see whether the tribe allows that to be lockboxed. In absence of their agreement with the state, this wouldn’t be a strong enough source of collateral, if the court deciding the disposition of disputes were Tribal.

Their agreement with the state, and their potential to become a party to that agreement, potentially, means whatever dispute resolution clause they’ve agreed to with the state would go for the banks. Doubt seriously that the state agreed to resolve their dispute in Tribal court. Venue is probably federal.

In absence of that agreement, lockboxing the revenue still means that the tribe could just stop sending checks for whatever compelling reason the Tribe could come up with. If your venue is Tribal court, there isn’t much you as a bank could do about that. Whether the revenue in collateral here comes from an existing plant or from a casino, or a lemonade stand for that matter, is immaterial. Dispute resolution has to be such that the banks could actually expect not just a resolution of the dispute, but also enforcement.

That’s the other thing. Getting your judgment in Tribal court is hard enough. Getting it enforced is quite another.

They may be able to finance this on their own. I’ve provided a link to the largest tribally owned bank in the US. To me, you’d think the Tribes would have considered, “Hey, we should be financing our own projects and carrying our own paper. We’d then have more money to stake bigger projects.”

Here’s the link:

http://www.potawatomi.org/enterprises/banking

At this late date, you should be reading about the Tribes just putting up the refinery, telling the EPA that their Air Permits are for the pale face, and just start cranking out Ethanol-free gasoline at a cut rate to compete with US-based producers.

I haven’t seen any of those articles. I should be reading them, but they can’t get out of their own way. Tribes are best thought of like Saudi Arabia - a few families who own everything in that country. However, eventually the Saudi’s figured out how to be at least a global member of the free enterprise system and a reliable supplier of oil to the world. They screwed up early on with their embargo, but proved they could learn from that.

It will be interesting to see if the Nations learn how to do it the ‘Saudi’ way - retain your autocracy but become reliable. They could do as much as anyone to spur economic development in the US, ESPECIALLY for their own selfish reasons.

They need their own banking system, and their own capital facilities - ones that would be able to write performance bonds that would not require land as collateral. They could do it. We’ll see if they do.


24 posted on 04/23/2014 9:05:07 AM PDT by RinaseaofDs (.)
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To: RinaseaofDs
In absence of that agreement, lockboxing the revenue still means that the tribe could just stop sending checks for whatever compelling reason the Tribe could come up with.

I understood that revenue stream was coming from the state. I was guessing (and only guessing) that it could be attached prior to the tribe receiving it. I agree depending upon a Tribal court is the same as losing.

Also this is a "small" and simple type of refinery. The type mostly built on skidded equipment. Much of the dollar value could be disconnected and removed. It would not be worth the total installed cost of the refinery, but it could reasonably be collateral for half.

25 posted on 04/23/2014 9:19:16 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

I actually believe that the Tribes want their courts to be considered legitimate. There are folks in leadership that understand that if you can’t expect your contract to be enforced fairly, then when the gambling thing goes away, it will be over.

Again, an incredibly tough sell for the Tribes. For those that understand how Tribes work, the thumbnail on doing business in a rez is ‘Why?’

The tax benefits are so narrowly defined down to Tribal members and entities, however, feed stocks can be bought without local, state, or federal taxes.

It doesn’t help that Tribes in WA can sell gasoline without paying any taxes at all, but the price difference between rez and non-rez gas is only a nickel.

The lessons come slow for them. It’s only recently that they’ve stopped running to Federal court for everything. They’re still going there, but less.

Politically, they are big D’s. Ideologically, you’d be surprised. In the pecking order on the progressive side, they are the top of the heap - ranking even above blacks and environmentalists as protected classes. They are pro-revenue, and anti-capitalist. They are deeply scarred by the lying done to them in their recent history.

They can’t get out of their own way, and change is glacial.


26 posted on 04/24/2014 7:43:30 AM PDT by RinaseaofDs (.)
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