Energy bill is a win-win for landowners

Finally, the U.S. House of Representatives has passed meaningful energy legislation. The Energy Policy Reform and Revitalization Act protects land owners and water resources and updates reclamation bonding, among other things. The U.S. Senate should follow suit.

My family and I are split estate landowners, one of many, in the Little Missouri National Grasslands of North Dakota. Split estate landowners do not own the rights to minerals beneath the surface of their lands. Our family has farmed and ranched since the early 1900’s when my grandparents on both sides homesteaded here. We have had oil and gas development on our farm/ranch since the mid 1950’s. There is not a time that I can remember not having to deal with the oil and gas industry.

Surface owners often have no idea who owns the minerals under their lands. That someone, especially in the Little Missouri National Grasslands, is often the federal government. This legislation requires notification of split estate surface owners when the minerals beneath their land, if owned federally, are about to be leased. If landowners have a voice in the process, both sides win.

I know from experience that surface owners need a say in each step of the process, from lease sale stage to the point when the rigs and tanks are gone and reclamation work is finished. After all, the land belongs to the surface owner and it is going to be there long after the oil is gone.

This act will also require replacement of any water that is damaged or disrupted. This is particularly important in western North Dakota where oil companies are fast becoming corporate owners of water for use in the production phase of oil drilling. Water management plans are necessary to protect western North Dakota’s valuable and scarce water supplies.

This act improves reclamation bonding for the surface land. The current federal bonding amounts were set under a 1960s rules and are grossly inadequate. The bill sets reclamation bonds at a level reflecting the actual costs of returning disturbed land to its pre-drilling condition. Without these improvements, reclamation of hundreds of thousands of acres disturbed by oil and gas development reclamation may take place at the expense of the taxpayer instead of the industry.

North Dakota took a big step in changing bonding during the 2007 Legislative Session. Now, for any well that sits idle for a year or more, a common occurrence in North Dakota, the operator will post a separate bond that is equal to the actual costs of plugging and reclamation. Those costs have nearly doubled in recent years and now, depending on the location, can be over $50,000 per well. Now we need to make significant change at the federal level.

The oil and gas industry is attempting to misrepresent this bill, suggesting that the reforms will cause oil prices to rise. In reality, oil prices respond to global market forces of supply and demand, not to whether operators on private and public lands pay a small administrative fee to obtain drilling permits, or post bonds that are usually only 1-2% actual face value of the bond to repair the damage done by development, or make sure private property owners are treated fairly.

Enactment of these important provisions of the Energy Policy Reform and Revitalization Act will help ensure that oil and gas development takes place responsibly, in appropriate places with the proper safeguards, and in a way that balances our need for oil and gas with the need to protect the rights of property owners. This bill deserves the support of all who value the quality of life in western North Dakota and throughout the West.

Contact your senators at the Capitol switchboard: 202-224-3121 and tell them that you support surface owners who have oil and gas development on their lands. Tell them that surface owners are struggling for the right to co-exist with the oil and gas industry and this bill will level the playing field. There is a process for doing it right and their support of this legislation will make a difference.

Don Nelson, from Keene, North Dakota, is a former WORC chair and is on Dakota Resource Council’s Oil and Gas Task Force.