Drilling rig

A drilling rig is pictured near Lake Sakakawea near New Town on Thursday, Sept. 8, 2016. Some fear that uncertainty about who owns the minerals under the lake will deter oil development in the area.

The North Dakota Senate took another step this week to resolve disputes over oil and gas mineral ownership under Lake Sakakawea, approving a second phase of study and extending the time frame for royalty owners to get paid.

In 2017, legislators ordered a study of the historical ordinary high water mark of the Missouri River as it existed before the construction of the Garrison Dam, which created Lake Sakakawea.

The study aimed to resolve uncertainty over the mineral ownership and set up deadlines for royalty and bonus payments to be distributed.

But the Board of University and School Lands said the review didn’t provide enough detail to proceed with those payments. The report, approved by the North Dakota Industrial Commission, does not allocate acreage above or below the ordinary high water mark.

Senate Bill 2211, approved unanimously by the Senate on Thursday, authorizes the Land Board to hire an engineering or surveying firm to do a second phase of study and provide the necessary information.

Sen. Jessica Unruh, R-Beulah, said the additional study is “imperative” so the department can issue accurate refunds. Millions of dollars have been held in escrow or in suspense while disputes over who owns the minerals are resolved.

The board, which has received applications from six firms, estimates the study will cost no more than $2.5 million, said Land Commissioner Jodi Smith.

The bill also extends the time frame for refunds or royalty adjustments to be returned to operators. Smith has said a contract would likely be awarded to a firm in May and the study is expected to take about one year. That means it would be 2020 at the earliest before any payments are distributed.

The bill now moves to the House for consideration.

Meanwhile, a lawsuit  is still pending from Rep. Marvin Nelson, D-Rolla, and others against the state that challenges the legislation approved in 2017. Arguments were heard in the case in January and the parties are awaiting a district judge’s ruling, which is expected to be appealed to the North Dakota Supreme Court.

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(Reach Amy Dalrymple at 701-250-8267 or Amy.Dalrymple@bismarcktribune.com)

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