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The state's only oil refinery turned 50 on Saturday, which is a major milestone in a volatile industry that hasn't seen a new refinery since the 1970s.

Company officials marked the 50th birthday of the Tesoro Mandan Refinery with a celebration that included public tours of the facility.

Fifty years might seem like a long time for a refinery to exist, but the Mandan refinery is less than half as old as other refineries in the United States.

Leif Peterson, regional human resources manager for Tesoro, said the refinery will be around for years to come because of investments Tesoro is making into the facility.

"By investing for the future we will be well positioned," Peterson said.

Tesoro's Mandan Refinery can process up to 60,000 barrels of Williston Basin crude oil a day.

In comparison, Tesoro's Golden Eagle Refinery near San Francisco, which is the company's largest, can process up to 168,000 barrels of oil a day.

Although the refinery is small on the grand scheme of the oil refining business, it plays a large role in North Dakota's economy.

Mandan Mayor Ken LaMont said the refinery is second only to the railroad in terms of long term employment it provides in the community.

The refinery employs 212 people with an annual payroll and benefits package of about $18.5 million.

"That's a huge impact on our city," LaMont said. "The jobs they provide are extremely well paying."

The refinery also helps fund local government. In 2003 the refinery paid about $1.9 million in taxes to Morton County.

Peterson views the refinery's work as the kind of economic development North Dakota needs.

"This is a prime example of value-added economic development," Peterson said.

The refinery adds value to crude oil piped in from the Williston Basin to make 15 products.

Gasoline accounts for about 55 percent of the refinery's end product, but diesel, jet fuel, propane, butane and residual fuel also are created.

Most of the end products are sold to customers in the Dakotas, Minnesota and Wisconsin.

The refinery officially opened on Oct. 2, 1954, by Standard Oil Co., just a few years after oil was discovered in North Dakota in 1951. The plant sits on 1,000 acres, of which approximately one-third is used for the refinery process.

A location along the Missouri River was chosen for the refinery because of the massive amounts of water needed. The refinery uses 1.5 million to 2 million gallons of water a day to make steam and cool equipment.

The refinery's long history included some name changes.

In 1973 Standard Oil changed its name to Amoco Oil Co. Amoco later merged with British Petroleum to become BP Amoco. The refinery began using the Tesoro name after the company bought it on Sept. 6, 2001.

Keeping the refinery viable for the future involves a lot of investments that are driven by government regulations.

One of the reasons there haven't been any new refineries built since the 1970s is because it is a very expensive business to get into and keep running.

"It is a very capital-intensive business," Peterson said. "There's a heck of a lot that goes into making a gallon of gas. It's not like turning on the faucet to get water."

Two recent investments into the refinery include the installation of a $25 million distillate desulfurization unit in 1999 to reduce sulfur content in diesel fuel and a new wet gas scrubber this year that will reduce sulfur dioxide and particulate emissions from the refinery's main stack.

The refinery also conducted a complete shutdown in the fall of 2003 for cleaning, maintenance, inspection and upgrades.

LaMont said the company's investment into the refinery is good news for Mandan.

"What it tells us is they like being here," LaMont said.

In addition to investments, the refinery also has to have enough cash flow to keep running.

John Berger, the business manager for the refinery, said Tesoro paid $2.8 million in one day last week for crude oil.

Berger said being close to a major oil source is one advantage the Mandan refinery has over other small refineries.

One of the major technological advances in the plant came in the early 1980s when the plant utilized computers to control and monitor the refining process.

With a few keystrokes, the operators at the refinery can change the octane of fuel being produced, open and close valves and monitor the refinery to make sure there are no problems.

Erv Zinnel, an operator at the refinery, remembers working there before computers were used.

Zinnel said gauges were checked by operators and valves had to be opened and closed by hand.

Zinnel said a computer lockup won't cause major problems at the plant because there are several other computers that can be used, and in case of a major emergency there are emergency shutoff buttons.

In addition to the operators that monitor computers, there also are outside operators who constantly monitor the refinery.

Employees at the plant say that safety is a top priority.

When operator Del Bueligen was asked if his job is to check for problems at the refinery, he quickly responded, "We try to avoid problems by making moves ahead of time."

It takes about five years to become a fully qualified operator. After going to school, operators learn individual parts of plants.

In addition to government regulations and competition with other refineries, another challenge for the future of the refinery will be replacing the large number of workers expected to retire in the next decade.

"Right now we are in our second generation of employees," Peterson said. "Most of the first generation left in the 1980s."

Peterson said many of the refinery's employees receive training from Bismarck State College and some North Dakotans leave college to work at refineries in others states and later return to North Dakota to work at the Mandan refinery.

If the Mandan refinery can overcome all of the challenges that face the industry, more generations of employees will see meaningful employment in a refinery that could outlast many others in the country.

"A lot of people think there never will be another refinery," Berger said.

(Reach reporter Tom Rafferty at 250-8264 or

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