Business

Lengthy environmental study changes Enbridge deal with Osage Nation

A lengthy Bureau of Indian Affairs environmental review of the Nation’s Pershing property has changed a deal between Enbridge Inc. and the Osage Nation Energy Services, LLC.

Enbridge is still interested in the property, but instead of a pipe yard, which was originally planned, it will be used to store material and equipment, said Jill Jones, ONES LLC chairwoman.

“BIA required an extensive environmental assessment on the 105-acre Pershing property before they would approve it for use as a pipe yard. This process typically takes 90-120 days and would not meet project deadlines when the pipe yard needed to be constructed,” Jones said in an email. “We are still working on the lease agreement for the 105-acre Pershing property. This will be for equipment and material storage, not a pipe yard. The lease agreement is being reviewed by legal counsel. The next step will be for the lease agreement to be signed by Enbridge and Chief Red Eagle, and it will have to be approved by BIA as well.”

Enbridge officials were in Pawhuska the week of April 15 to meet with the Pipe Line Contractors Association, unions and Osage Nation Human Resources department, Jones said.

Enbridge Inc. runs the longest pipeline system in Canada and the U.S. and is interested in doing business with the Nation since its Flanagan South Pipeline Project runs through Oklahoma. The project is a nearly 600-mile crude oil pipeline that originates in Flanagan, Ill., and ends in Cushing, Okla.

According to Enbridge.com, the Flanagan South Pipeline Project will cross Illinois, Missouri, Kansas and Oklahoma. Once finished the initial capacity of the pipeline will be 600,000 barrels per day, according to Enbridge.com.

Cogeneration

The ONES LLC is considering other business proposals as well, including a proposal for a Cogeneration project, which is the use of a heat engine or power station to simultaneously generate electricity and useful heat.

ONES board member Charles Hessert said he has invited Tom Thralls, a partner with Tulsa-based Geo Prospectors, to make a presentation to the board on what a Co-gen project could look like for the Nation. Hessert said Thralls thinks an ideal spot to operate the first co-gen machine would be near the Tulsa Osage Casino.

Hessert said the Nation would not be making the initial capital investment. Details still need to be worked out on how the Nation could sell electricity through the newly created Osage Tribal Utility Authority but Hessert said he would arrange for Thralls to make a presentation to the ONES board.

The ONES board is comprised of Jones (chair), Randy Standridge, Charles Hessert and former Osage congressman Mark Simms.