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Chuck Haga / Forum Communications Co., Published December 26 2010

Oil Patch landowners want Legislature to restrict access

Myron Hanson, whose family has farmed in Bottineau and Williams counties for more than a century, will go to Bismarck next month to lobby the North Dakota Legislature, appealing for tighter regulations on energy companies’ access to and use of their land during development.

“The vast majority of acres around here are held by absentee owners,” said Hanson, 59. “They lease those acres to an energy developer, and that allows them the right to ingress, and I have nothing to say about it.

“I’m not anti-oil,” he said. “My family has benefitted from oil development. But at the same time, I don’t want my farm cut to pieces without adequate compensation.

“The state has fostered a ‘Gold Rush’ atmosphere and has allowed this to get out of control because everybody’s in love with the money.”

On Dec. 15, Hanson and some of his neighbors met in Berthold with landowners in other parts of the Oil Patch and formed the Northwest Landowners Association. He was elected president and will take the group’s proposals to Bismarck.

The proposals would have the state require energy companies to negotiate annual, not one-time, payments to compensate surface owners for disruption and loss of productivity, and require periodic reviews of those agreements.

Hanson said an arbitration board should decide disputes when negotiations fail, and energy companies should be required to publish countywide averages of settlements “so everybody can look at it and say, ‘OK, this is a fair number.’ ”

The North Dakota Petroleum Council says it supports maintaining existing laws.

“There are many issues to resolve as oil production occurs on private and public lands,” the council declared in a summary of “key issues” it expects to come before lawmakers.

But the parties involved should retain the right to negotiate royalties, surface use and lease terms, according to the council’s statement. “Government should refrain from interference without justification. Too many new rules in reaction to a few vocal individuals are a concern.”

Gregory Tank, 58, whose family has farmed and raised cattle near Keene for three generations, said he also wants to see a state mediation board empowered to deal with oil company-landowner disputes and a contingency fund big enough to handle problems into the future.

“I have grown up with it since I was a boy, seeing problems in leasing, reclamation and payment of royalties,” he said. “The landowner gets all the problems and ends up with attorney’s fees and other costs and the lost value of property.

“Things are going to happen next week, next month, 10 years from now and 50 years from now, and we need to have something set up.”

Derrick Braaten, a Bismarck attorney, is working with lawmakers on bill drafts at the request of surface owners.

“We need to ensure that there will be surface-use agreements in place as to how their land is going to be used,” he said. “Surface owners don’t have a lot of power now if they don’t have minerals. One guy said an oil company put a well on his calving pasture. When he asked them to move it, they said no. When he asked them why, they said, ‘We don’t have to.’ ”

Braaten said some landowners who do hold mineral rights “have had wells producing on their land for years and haven’t received royalty checks yet. It may be that there’s so much activity and companies just can’t keep up, but I don’t think it’s the royalty owners who should be suffering.”

Hanson said the Legislature also will be asked to increase safety requirements for spill containment structures and increase well spacing requirements.

“This farm is my 401(k),” he said. “I’ve spent 30 years building this farm, and we’ve had this land in continuous family operation for more than 100 years.

“I take the stewardship aspect of that very seriously. Since I was a kid, all I ever heard was, ‘Take care of the land.’ Well, the state of North Dakota has a stewardship responsibility, too.”


Chuck Haga is a writer for the Grand Forks Herald