The North Dakota Industrial Commission adopted the findings of a Missouri River study that could impact oil and gas mineral ownership, but it’s expected to be challenged in court.
The Industrial Commission voted unanimously to adopt the final recommendations from Wenck Associates, a consultant hired to study the ordinary high water mark of the Missouri River as it existed before the Garrison Dam, which created Lake Sakakawea.
The study, directed by the Legislature, aimed to resolve disputes over oil and gas ownership by investigating the accuracy of the 1950s river survey conducted by the U.S. Army Corps of Engineers.
The Industrial Commission’s action determines the ordinary high water mark of the Missouri River. The final report concludes that North Dakota owns about 9,500 more acres than the corps survey of the river showed. The consultant did reduce the state’s ownership by about 900 acres based on “clear and convincing evidence” received during a public comment period last spring.
Josh Swanson, an attorney who represents several mineral owners, said Thursday he’s disappointed by the Industrial Commission’s decision, which he called sanctioning “a blatant taking of thousands of acres of mineral acres of private landowners.”
While the result is favorable for some mineral owners, Swanson said he expects those who are negatively affected will file new lawsuits in the coming weeks.
“There are several groups of mineral owners here that have a very strong claim for an unconstitutional taking against the state,” Swanson said.
The legislation, known as Senate Bill 2134, requires mineral owners to file cases in district court within two years to challenge the commission's findings. That clock starts now with the commission’s adoption of the report.
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“That provides a light at the end of the tunnel that, if there is going to be litigation over this, it has to begin within a two-year time frame,” said Director of Mineral Resources Lynn Helms.
The legislation also requires the North Dakota Department of Trust Lands to issue refunds or adjustments of bonus or royalty payments that are necessary by the determination of the ordinary high water mark.
However, Land Commissioner Jodi Smith said the Wenck report does not have the level of detail needed to proceed with those payments. The report does not allocate acreage above or below the ordinary high water mark, a concern Smith raised during a June public hearing.
The Industrial Commission concluded that it was outside of the scope of the Wenck study to provide accurate acreage allocations for property transfers.
The Board of University and School Lands will discuss next steps during its Oct. 25 meeting. If additional work is needed, the process could take several more months, Smith said.
In addition, a lawsuit challenging Senate Bill 2134 adds more complexity. In the lawsuit filed by Rep. Marvin Nelson, D-Rolla, former Republican governor candidate Paul Sorum and others, a court injunction prevents the state from distributing oil and gas bonus and rent payments and royalties that the state collected or escrowed prior to April 21, 2017, while the case continues.
The commission’s order is available at www.dmr.nd.gov. Digital coordinates of the ordinary high water mark will published on that website next week, Helms said.