Pipeline oversight step-up

STANLEY More than 2,000 pipelines used to gather or transfer oil and saltwater have been unregulated in North Dakota, and although the state has proposed a fix, landowners don’t believe it goes far enough.

Lynn Helms, executive director of the state Oil and Gas Division, spoke about proposed rules for currently unregulated pipelines before a three-member legislative panel of the North Dakota Democratic-NPL caucus Wednesday in Stanley. House Minority Leader Kenton Onstad of Parshall chaired a panel that included Sen. John Warner of Ryder and Rep. Marvin Nelson of Rolla to get an update on a large spill near Tioga in September and find out what is being done to prevent future spills in the state.

Statistics from the Oil and Gas Division show 1,253 spills so far this year. More than 75 percent of spilled oil or saltwater has been contained to the site.

“It’s a little concerning to a lot of folks that there’s really no oversight over gathering lines,” Onstad told Helms. “There’s a whole host of gathering lines that are out there.”

Helms explained that there has been no mapping to even determine where these shorter pipelines are located or to determine how many miles of them exist. The 2,125 saltwater pipelines, many running from drilling sites to disposal wells, aren’t regulated like cross-country pipelines. The North Dakota Public Service Commission and U.S. Pipeline Hazardous Materials and Safety Administration have regulatory authority over certain pipelines but not gathering and transfer lines.

The 2013 Legislature gave the Department of Mineral Resources authority to draft rules for the first time over these types of pipelines. Helms called the new regulatory authority a “watershed change.”

“This changes everything,” he said. “There’s going to be some construction requirements in place.”

Because the Legislature didn’t create an inspection program with staffing, the state will only do periodic, unannounced inspections of pipeline construction. The proposed rules require companies to self-certify. Within 180 days of a pipeline going into service, companies must provide the state with mapping and an affidavit stating the pipeline was installed according to the rules. If later determined that rules weren’t followed, companies could be charged with a felony.

Reporting rules would apply to pipelines installed after Aug. 1, 2011. Portions of the rules also would apply to abandoned pipelines, making them subject to certain closure conditions and location disclosures.

The proposed rules are scheduled to get their first review before the North Dakota Industrial Commission in December and are expected to go to the Legislative Rules Committee in March.

Members of the Northwest Area Landowner Association and Dakota Resource Council told the panel that the proposed rules won’t solve the problem of inadequate protection for landowners.

“We cannot put thousands of miles of pipes into the ground, enough to encompass the globe, without better regulatory authority,” said Troy Coons, Donnybrook, vice chairman of the association. “Our organization supports responsible oil and gas development and we are eager to see this problem addressed by our regulatory agencies … We believe it’s crucial to adopt more comprehensive regulations to address the issues related to saltwater spills and we are asking the NDIC to adopt rules to address the problem. We do not agree that the proposed rules address this significant problem.”

“The landowner seems to be trumped all the time by the mineral owner,” added association member Robert Grant, Berthold. “There should be some mechanism where that landowner is involved in all the decisions and has at least some say, if not equal say. Why should one asset be more valuable than the other?”

He said association members are alarmed that about half the spills this year have been larger than 10 barrels.

He noted the oil boom is young. The state has about 10,000 oil wells and many new pipelines, including 2,400 miles of pipeline constructed this past year the distance from Los Angeles to New York City, according to the Oil and Gas Division.

“What’s going to happen as this increases to 40, 50, 60,000 wells, and we are down the road 30, 40, 50 years?” Grant asked. “That’s the main reason we feel there needs to be a lot more oversight in the construction of all these sites.”

Theodora Bird Bear, Mandaree, who chairs Dakota Resource Council’s Oil and Gas Task Force, was unable to attend but sent prepared remarks that spoke of the dangers to residents from potential pipeline incidents. She called for better remote monitoring and alarm systems, citing an evacuation that was necessary near White Earth after a worker happened to be driving by and noticed a leak. She wrote of the negative impact that pipeline spills or the risk of spills has on farmers’ abilities to use their land as loan collateral.

Nelson responded that the Legislature must establish laws that set the foundation, rather than rely on administrative rules.

“I don’t think right now, as the second largest oil-producing state in the nation, that we have really done a good job of setting up the infrastructure for the people of North Dakota,” he said, adding that it’s time “to make things right.”

After the hearing, Grant spoke for the association in urging tougher laws on pipelines. The association had pushed for various bills that would have done that but was not successful in the 2013 session.

“We feel we lost out in the Legislature on a lot of what we proposed, but what came out of it is they are addressing it in some fashion,” he said. “At least, we have a starting point.”

He said the rules can be improved once in place, but the process takes time.

“We have to get the public behind us and get the public to understand what we are after,” he said.