Industrial commission deciding policy for ‘extraordinary’ permitting

The North Dakota Industrial Commission held a special meeting Wednesday morning to discuss proposed rule changes related to oil drilling permit consideration, particularly around sites identified as extraordinarily significant to the state.

On the commission, Gov. Jack Dalrymple and Attorney General Wayne Stenehjem met at the Pioneer Room of the State Capitol in Bismarck, with Agriculture Commissioner Doug Goehring teleconferencing in from a trade mission in Ghana.

The plan as initially proposed last month by Stenehjem would have amended the state code dealing with the drilling permit process to require that an impact mitigation plan be submitted with a permit application. The proposal also identified 18 places around the western half of the state as having “extraordinary significance,” further requiring that permit applications for sites within a set proximity to those locations be publicly announced within five days, and that a 10-business-day period be included for collecting public comments relevant to the proposed project.

Though no actions have been taken as a result of the meeting, in an interview afterward, Stenehjem explained the commission decided not to pursue an amendment to Chapter 43 of the state administrative code. Rather, they will “simply adopt the proposal as a policy.” Staff are currently reworking the draft into a policy to be discussed and decided upon, hopefully at the commission’s monthly meeting Jan. 29.

The process to amend the current code would take a long time. Stenehjem estimated from six to nine months “or even longer.” Additionally, as an adopted policy the commission would have greater flexibility to make changes as necessary.

This would also serve to address concerns received from mineral rights holders and landowners. “We have received quite a bit of feedback,” said Jeff Zent, communications director for the governor’s office. “The vast majority of those have been folks with concerns.”

Outspoken against the proposed changes has been the Royalty Owners & Producers Education Coalition, an Oklahoma-based lobby group primarily sponsored by four oil firms: Apache Corporation, Continental Resources, Devon Energy Corporation and Newfield Exploration Company.

“I think that’s good news,” Jerry Simmons, the group’s executive vice president, said of the Industrial Commission’s decision to forgo a formal rule change. It has been ROPE Coalition’s contention that North Dakota’s drilling permit process is sufficiently regulated, and warned that the amendment, as drafted, would undermine the rights of private mineral holders.

“I guess we’ll have to see how things go, moving forward,” he added of the developing policy.

Stenehjem emphasized that the commission cannot prevent private mineral holders from developing what is their property. However, commissioners want well developers to have an impact plan coming into each project, and for the public to be given an opportunity to weigh in with their concerns before rather than after work begins.

“A lot of these planning proposals are already in existence,” Stenehjem said of the planned provisions. But as the regulation currently stands, Stenehjem explained “it doesn’t provide for a process of public comment.” He cited public outcry surrounding a well situated near to historic Elkhorn Ranch, or a transmission line project crossing the Killdeer Mountain battlefield as examples that the current policy is insufficient.

In the new policy currently being considered, the Industrial Commission identified 18 places in North Dakota as having extraordinary significance:

Black Butte, in Slope County; Bullion Butte, Billings County; Camel’s Hump Butte, Golden Valley County; Dakota National Forest, Slope County; confluence of the Missouri and Yellowstone rivers; Elkhorn Ranch; Killdeer Mountain Battlefield State Historic Site; Lake Sakakawea; Little Missouri River; Little Missouri River National Grasslands; Little Missouri State Park; Pretty Butte, Slope County; Sentinel Butte, Golden Valley County; Theodore Roosevelt National Park; Tracy Mountain, Billings County; West Twin Butte, Golden Valley County; White Butte, Slope County; and all wildlife management areas.

“They are kind of the obvious, extraordinary places,” said Stenehjem.

The policy would also establish buffer zones for each site that range from a half to two miles, and would require the inclusion of an impact mitigation plan with the submitted application for each drilling project. The impact mitigation plan would have to provide a timetable for project completion and subsequent reclamation of the well site “to natural conditions,” plan to mitigate noise and traffic from well operations, protect the “view shed” at those protected sites, as well as determine the feasability of avoiding the flaring of gas and trucking of fluid from the site.

On the administrative side, the director of Mineral Resources would be required to post applications for a drilling permit at any of these sites to the departmental website within five days of receiving them, at (www.dmr.nd.gov/oilgas/). Ten business days would then be allotted after that notice for public comments regarding the project to be received.