Group urges greater N.D. oil oversight

Two oil-related spills in recent months and a continuing risk of spills and other accidents that could endanger soils and groundwater require a strengthening of state regulatory agencies and rules covering the oil boom in western North Dakota, according to a report released Thursday by the Dakota Resource Council.

The environmental watchdog and advocacy organization, based in Dickinson, N.D., cites potential threats posed by the rapidly expanding development of the Bakken oil formation and offers several recommendations for action by the North Dakota Legislature, which convenes in Bismarck next month.

A 2006 saltwater spill and four well failures involving fracking, the use of high-pressure chemical solutions pumped into wells to increase oil production, raise concerns "about the sufficiency of state regulations and enforcement," DRC Chairwoman Marie Hoff said.

State regulators have said they intend to review drilling policies in light of recent incidents, according to Carrie La Seur, president of Plains Justice, an environmental legal organization also part of the resource consortium. "Clearly, the Department of Mineral Resources realizes there are major problems."

But Lynn Helms, director of the state Department of Mineral Resources, said the DRC's proposal inaccurately portrays oversight as lacking stringent rules and applying lax enforcement.

"They seem to characterize our rules and regulations in water handling as lax and unenforced," said Helms, whose agency regulates the state's oil and gas industry. "I want to correct that."

Inside the report

The report will be distributed this week "to key legislators and some key agencies," said Ashley Lauth, a spokeswoman for the council, which is part of the Western Organization of Resource Councils in Billings, Mont.

The report includes a renewed call for industry release of detailed information concerning chemical components of fracking fluids, without which "there is virtually no ability to enforce safe drinking water regulations."

The unprecedented oil boom in western North Dakota has boosted state tax revenues and provided leasing bonuses and royalties for owners of mineral rights, the report notes, but it "has also brought new problems for the state to confront, including housing shortages, widespread road damages ... (and) the risk of spills and other oil-related accidents that endanger soils and groundwater and present a difficult challenge to our overworked state agencies."

Helms said the report failed to fully list the state's regulations for handling and monitoring saltwater disposal from oil wells, among other things. Rules were stiffened following a 2006 spill contaminating Charboneau Creek in McKenzie County, including requirements for well guages and continous remote monitoring, he said.

"We have in our rules strict requirements," Helms said. State officials are monitoring what other states are doing to regulate hydraulic fracturing, or "fracking," and likely will beef up those requirements by amending the department's administrative rules, he said.

"We are in the midst of a review," Helms said. "I think as a result of that we will be looking at rule changes in the future."

N.D. oversight

Although he has not had time to study the DRC proposals in detail, a North Dakota petroleum industry leader said current regulations do a good job of protecting the environment.

"The reality is, in North Dakota, I think we have what's considered the best regulatory model and best regulatory agencies in the country," said Ron Ness, president of the North Dakota Petroleum Council. "They're doing their job well."

Several highly publicized spills in recent months, and the ongoing cleanup of a saltwater spill four years ago, have focused greater public attention on oil and gas activity in North Dakota's oil patch, Ness said. But he maintained that the spills actually serve as an example that state officials are doing a good job in protecting the environment from permanent damage.

"You're not going to have a fail-safe process," Ness said. North Dakota's laws are based in large part on models from the Interstate Oil and Gas Compact Commission, a body of state regulators.

However, North Dakota's oil and gas oversight is unique, he added, because it falls under the state Industrial Commission, comprised of the governor, attorney general and agriculture commissioner, all elected and accountable to voters.

Disclosure

As to calls for public disclosure of the chemicals used in fracking, industry representatives contend the additives are common household chemicals.

Also, "when there is an incident, they do have to disclose," Ness said. "That information is available."

Much of the industry has resisted disclosure, contending the precise mix of chemicals is proprietary. "If you tell everybody what's in your apple pie, everybody can make your apple pie," Ness said. But he noted that Halliburton recently revised its policy and predicted that disclosure is coming.

The Dakota Resource Council calls for continuous remote monitoring of facilities, including pipelines, so spills are detected promptly, minimizing spills.

Ness said monitoring now is required of saltwater facilities as a result of a 2006 spill of Charboneau Creek, a tributary of the Yellowstone River.

Ness said the North Dakota Petroleum Council is working on its own legislative proposals, including input on infrastructure improvements, such as roads, and changes in taxes for the industry. To keep up with the boom, oil and gas regulators need more staff, he said, noting companies need permits before they can drill.

"They need more resources, there's no question," Ness said. "That benefits everyone."

Online:

- The full Dakota Resource Council report, titled "Clean Water Act Issues Raised by Saltwater and Oil Pipeline Spills," can be found at drcinfo.com.

- Forum Communications' eight-day special project on the North Dakota oil boom, including reports on spills and regulatory agency responses, can be found at runningwithoil.com.

Springer writes for The Forum in Fargo-Moorhead. The Forum and Herald are both owned by Forum Communications Co.

Reach Haga at (701) 780-1102; (800) 477-6572, ext. 102; or send e-mail to chaga@gfherald.com .