Who is Navajo Nation Oil & Gas (NNOGC)?
Founded in 1993, NNOGC is a Section 17 entity of the Navajo Nation. The overwhelming majority of our staff are Navajo Nation citizens (more than 93%). Based in St. Michaels, Arizona, NNOGC is a ﬁnancially strong company with millions in reserves to invest in future growth projects. NNOGC’s business is based in oil and gas developments, pipeline operations and convenience stores. The company is managed by an experienced team with an average of 30-plus years in the oil and gas industry. The management team reports to seven Board of Directors who must pass stringent requirements to be eligible for membership. The company also reports to ﬁve Shareholder Representatives who are members of the Navajo Nation Council and are designated by the standing committees to provide oversight to NNOGC. They each receive a small meeting stipend for their efforts to ensure alignment with the Nation.
What is helium?
Helium is a colorless, odorless, tasteless, and non-toxic inert gas which has limited to no reactive capabilities. It is not a fossil fuel and therefore has no carbon footprint. It is found underground and in the air we breathe.
Why does NNOGC want to explore helium on the Navajo Nation?
Helium is considered an exhaustible natural resource for which there are limited or no substitutes. The resource emits from Mother Earth constantly, but is only trapped in large enough quantities in certain areas. The Navajo Nation happens to be one of those areas, with concentrations as high as 7 to 8% of the gas stream. This concentration can yield signiﬁcant economic beneﬁts to the Navajo People without negatively impacting the environment. In addition, helium exploration supports many humanitarian needs such as treating respiratory ailments, medical research and MRI operation, and climate research and forecasting.
What is the process for Operating Agreements with the Navajo Nation Council?
Operating Agreements allow for exploration and development of natural resources. Currently, NNOGC is seeking an operating agreement for the exploration of helium. The process calls for the negotiated agreements to ﬂ ow through the Navajo Nation’s 164 Process and be reviewed for approval by the Navajo Nation Council and Ofﬁce of the President and Vice-President. The 164 Process also allows review by various Navajo Nation departments such as the EPA, Land, Fish &Wildlife, Antiquities, Minerals, and DOJ to provide oversight on potential operations to assess environmental impact.
How will NNOGC explore for helium?
NNOGC’s goal is to target resources where helium is associated with nitrogen. Nitrogen is another colorless, odorless, tasteless, and non-toxic inert gas which we breathe. NNOCG will drill wells to a shallow depth of approximately 6,000 feet. The hole size varies with each site but is typically no larger than16 inches in diameter at the surface and shrinks in size as the hole goes deeper. Various stages of steel casings are added to the hole for safety.
What are the uses of helium?
Most of the helium used today is for medical imaging (e.g., MRI scanners), manufacture of electronics, research using low temperatures, welding, deep sea diving, purging and leak detection, and in commercial lifting and rocket propulsion.
How will NNOGC ensure environmentally responsible exploration?
NNOGC has been and will continue to be very transparent about how exploration will impact the environment. While there will be some surface disruption at the drill site, it will have a relatively small impact. In addition, NNOGC is committed to protecting freshwater supplies through the use of casing and cementing (which are standard industry practices). Once NNOGC brings the gas to the surface, facilities capture and move production to market. The process is similar to water or electricity movement throughout the Navajo Nation. When NNOGC’s activities are complete, the company will return the site to its original status per agreed upon obligations within the operating agreement. NNOGC and its leadership are passionate about environmental protection and will work in partnership with the impacted communities on preservation efforts. It is not in NNOGC’s best interest to pollute or otherwise harm the environment as the company seeks to grow its helium business with other developments on the Navajo Nation. Managing our business with an Environmental –Social – Governance (ESG) focus is one of our core values.
Is this process mining?
No, helium is a gas and therefore cannot be mined like oil. It is not possible to physically mine the earth for helium.
Is NNOGC communicating with Chapter Houses?
Yes, NNOGC has been working with the affected Chapter Houses, listening to their concerns, and discussing proﬁt sharing.
Why is the world short of helium? Isn’t it very common?
Helium is one of the most common elements in the solar system, but it is rare on Earth. It is formed over many hundreds of millions of years through the radioactive decay of elements, but only a small amount is produced annually.
What are the beneﬁts to the Navajo Nation?
NNOGC has negotiated terms to pay royalties and a tax to the Navajo Nation. Additionally, NNOGC has agreed to pay a bonus and scholarship fund upon agreement between all parties. The royalties and tax amount to 25% of the revenue. This royalty and tax rate is almost double the rate found on US Federal Lands, so it is very attractive for the Navajo Nation. The royalties are paid into the Navajo Nation General Fund and used to provide various services on the Navajo Nation. In total, the estimated beneﬁt from the three operating agreements contemplated by the Navajo Nation Council could exceed $115 million over the life of production, which could exceed 10 years.
Will the Chapter Houses in the exploration areas receive anything?
NNOGC and its Board of Directors are working on a formal agreement with two Chapters within the proposed helium exploration area. We expect the amount shared with the two Chapters to be signiﬁcant.