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Four landowners' bills signed into law, other issues will continue to be addressed

The Northwest Landowners Association started the year by submitting eight bills to the 63rd Legislative Assembly. Four of those were defeated, one was absorbed into another bill, and three were amended and ultimately approved by the North Dakota House and Senate.

4/24/13 (Wed)

 

By Caroline Downs

The Northwest Landowners Association started the year by submitting eight bills to the 63rd Legislative Assembly.

Four of those were defeated, one was absorbed into another bill, and three were amended and ultimately approved by the North Dakota House and Senate.

After four months of testimony, negotiating and standing by their organization’s mission of fair and equitable treatment for all landowners, NWLA board vice-chairman Troy Coons and other members of the organization could finally enjoy a sense of accomplishment as Governor Jack Dalrymple signed four bills related to landowners’ issues into law on April 12th and 15th.

Coons worked most often in Bismarck with NWLA board chairman Myron Hanson of Souris and lobbyist Derrick Braaten of Baumstark, Braaten Law Partners in Bismarck. The men spent plenty of time at the table with legislators, other landowners, representatives from various state agencies, and lobbyists from the oil and gas industry as all parties hammered out details in the proposed legislation.

“There were days I drove home and I couldn’t even talk about it,” Coons said as he described his frustration with the process at times.

On the other hand, he noted the relatively new NWLA organization earned support from both chambers and from other special interest groups like the Farm Bureau and Farmers Union.

He also believed the NWLA’s integrity during the session helped keep the discussions flowing. “For us, it was about keeping the lines of communication open,” he said, “and staying honest to our cause.”

Steps forward for landowners
That cause included HB 1348, related to setback distances for oil and gas wells. The final version reflected major compromises made during the legislative session.

“For us, the bill is not what we originally intended,” Coons said. “We wanted the actual well bore to be located 1,320 feet from a permanently occupied dwelling.”

The final version of the bill included a minimum of 500 feet as the setback distance for a permitted oil or gas well. Wells permitted within 500 to 1000 feet of a permanently occupied dwelling must have the flares, tanks and treaters all located at a greater distance from the dwelling than the well bore itself, upon request of the dwelling’s owner.

Coons said the amended version did show progress made on the issue. “Now, we’re keeping the flares, tanks and treaters farther from the residences,” he said, “so we did gain safety measures there. We would have liked to have seen the well bore moved farther away, but it was a negotiating process.”

HB 1350 actually sailed through both chambers with relative ease on its way to the Governor’s desk. The bill established a statute of limitations for any person to notify a mineral developer of damages sustained within two years after an injury occurs, in order to receive compensation.

“This is a nice step forward,” Coons said. “There wasn’t much controversy about this topic. We were making a clarification and making the law more relevant to the current situation.”

HB 1352 established two new sections in North Dakota Century Code related to mediation of disputes between mineral developers and surface owners. Coons said the final version of this bill changed significantly from the original draft, but he was pleased to see the idea of both parties coming to the table for mediation now written into law.

The bill calls for the two parties to use the North Dakota mediation service through the Department of Agriculture, or another civil mediator. “I think it’s a great program,” Coons said about the state’s mediation service. “They told us that during the past 18 months, 25 cases had come before the mediation service, and 88 percent of those cases ended in a favorable result for both parties.”

The bill directs the two parties to share expenses equally for the mediator involved. “The service costs $175 an hour, split between the parties,” Coons said. “This is much more cost-effective than both parties hiring attorneys.”

The NWLA was not originally involved with the pipeline facilities and reclamation bill, HB 1333, but had introduced their own bill, HB 1347, related to liquid gathering transmission lines. That bill was defeated, but some of the ideas were absorbed into HB 1333 and the NWLA was asked to provide support.

The final bill, now signed into law, includes new definitions for “abandoned pipeline,” “pipeline facility,” and “underground gathering pipeline,” along with details about addressing saltwater and oilfield waste disposal, reclamation contracts, and the reclamation fund.

“We think the bill turned out well,” said Coons, “especially the parts about the reclamation fund. We think that was something that was really needed.”

NWLA will work on reclamation,
commencement of drilling issues
The failure of HB 1355, which would have defined the commencement of drilling operations under an oil or gas lease, frustrated the NWLA, although Coons described the version of the bill that reached the Senate floor as unacceptable to the landowners’ organization.

“Through the negotiation process, that bill changed,” he said. “By the time it got to the Senate, it was not the bill we wanted anymore. That version left the definition wide open, and we need something specific.”

According to Coons, the NWLA remains concerned about the issue. “There needs to be a clarification of this,” he said. “Now, some people say that a permit is enough to hold a lease, while other say that driving a pickup with a shovel in it out to the well site is good enough.”

He said the Three Affiliated Tribes require actual oil production to take place as the commencement of drilling operations, while some leases located on state land have been considered active when topsoil is moved.

“And on federal land, there are different rules,” said Coons. “For a private citizen, it’s very concerning. You make an agreement, but there’s no consistency.”

Coons compared the situation to snow removal. “If someone shows up in my yard with a pickup and a shovel, does that mean snow is getting moved?” he said. “Or does that happen when someone is scooping snow with the shovel?”

He continued, “Currently, there is no clear definition of commencement of drilling. It seems simple, but there are different opinions on the other side.”

The NWLA is also concerned about surface owner protection and reclamation of land after oil or gas production ceases. The group introduced HB 1349, which included specific reclamation practices that would be required, but that bill was defeated by the House in February, despite a “Do Pass” recommendation from the Natural Resources Committee.

Coons said the NWLA will not drop the issue. “If you consider old well sites and the way they look today, where will the liability at the end of this [current production] lie?” he asked. “We think the best time to deal with it is now. We’re looking for the land to be returned to par. That’s simple and fair.”

He said the NWLA intends to be involved in the administrative rule process after the current legislative session ends, in order to keep their concerns before the state agencies involved with oil and gas production oversight.

“We want to get certain standards [for reclamation] in place and to make sure they are followed,” he said.

He said the NWLA can also provide education on the topics to both landowners and legislators as these and other concerns are addressed and as the new laws are enacted.

“We will stay in contact with the Governor’s office and the North Dakota Petroleum Council,” he said. “We want to be a constant conduit between their offices and landowners about what is happening and what needs to happen.”

Final radio shows tonight, May 1st
After discussing, arguing and negotiating the landowners’ issues in Bismarck for the past four months, Coons described the business of oil and gas production in North Dakota as a fast-moving, high-dollar development. “Any good development is done with a partnership on both sides,” he said. “The dream here is prosperity for all, but that’s not what’s happening right now. There are so many, many issues that are in front of us, and it’s a matter of trying to get up to speed quickly.”

He acknowledged the NWLA did not achieve everything the organization wanted during this legislative session, but progress was made. “The communication has improved,” he said, “and we are the voice of the landowners [in Bismarck] now.”

He also advised landowners affected by oil and gas development to become educated about the processes and the law. “We have to adapt to something that is completely overwhelming us at times,” he said. “This is an ever-evolving business and you have to evolve with it.”

Coons will be speaking about the successful bills and other landowners’ issues during the April 24th and May 1st radio broadcasts of “Legislature Today,” airing from 7 to 9 pm. The landowners’ segment can be heard live on KFYR 550 AM and KTGO 1090 AM.

“We’re hoping to have Lynn Helms and a representative from Governor Dalrymple’s office join us,” he said.

Podcasts of the segments can be downloaded after the live broadcasts from the website at podcast.flagfamily.com.

More information about the NWLA, including the new legislation, is available online at www.nwlandowners.com.

Coons encouraged landowners with further questions to contact him at 701-482-7865 or Hanson at 701-243-6386.