Changes in the oil patch sometimes seem to move at a crawl.
Two stories by reporter Amy Dalrymple reflect how long it takes to move through governmental bureaucracy.
Laura and Robert "Bud" Griffin, who live southwest of Dickinson, want their property returned to normal. Abandoned equipment still litters their land five years after an oilfield waste disposal well was shut down due to environmental violations.
The Department of Mineral Resources says it’s waiting for information from the Environmental Protection Agency before it can plug the abandoned well. The state has made a request for the information, but the EPA hasn’t responded.
Under state law, the state must restore the surface of the site at the same time it plugs the well. There are no plans to begin any reclamation work until after a restitution hearing on Feb. 16 in U.S. District Court in Bismarck.
It’s estimated that it will cost $135,000 to plug the well and restore the site. The state is also finalizing the confiscation of equipment at the site and hopes to sell some of it.
Meanwhile, the Griffins wait. While the law must be followed, it’s a long time for the family to put up with the eyesore.
Changing rules related to oil development also takes time.
Royalty owners have been unhappy about deductions taken from their payments. They say the deductions aren’t explained so they don’t know if they are getting the right payments.
On Monday, the North Dakota Industrial Commission adopted a new rule that will require standardized royalty statements that identify the amount and purpose of each deduction. The deductions will be identified under the categories of transportation, processing, compression and administrative costs.
The North Dakota Petroleum Council opposed the rule, arguing it will cost $500,000 to $1 million for each software package, or potentially several million dollars, to make the change.
Lynn Helms, director of the Department of Mineral Resources, countered this argument by pointing out the amount of royalties distributed by the oil industry, which he said was $8 million a day in September.
There’s a catch to the new rule. The commission delayed the effective date of the rule to July 2019 to give the industry time to comply and to allow the Legislature to tackle the issue in the 2019 session if they want.
Gov. Doug Burgum, chairman of the commission, said oil companies could be proactive and comply earlier, but that seems unlikely.
So royalty owners can’t count on the new rule. It’s possible legislators could reject it or rewrite it. Royalty owners will have to wait more than a year to find out the legislative decision.
To be fair, oil companies also spend time getting state approval for drilling. Everyone waits in the oil patch. There are good reasons for the rules in place, but the frustration with the delays is understandable.