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$7,500 fine issued to oil company that couldn't locate pipelines in ND

BISMARCK — Continental Resources has agreed to pay a $7,500 fine to settle a complaint that the oil company couldn't locate underground pipelines in southwest North Dakota, one of three fines issued Wednesday, Jan. 4, by the Public Service Commission.

Commissioner Brian Kalk said the fine should serve as a signal to the industry that operators need to be able to locate underground facilities or face violations of the North Dakota One-Call law.

"Third-party damage is the biggest reason why pipelines fail or power lines fail," Kalk said. "The goal here has never been to fine people. It's to protect the facilities."

Many One-Call violations result when excavators fail to follow the call-before-you-dig law and then cause damage to underground utilities. But in this case, the reverse occurred with an excavator who complained about the pipeline owner, Kalk said.

Keith Ernst, president of Ernst Trenching of Fargo, complained in October 2015 that Continental Resources could not locate pipelines near Rhame in southwest North Dakota's Bowman County.

"They have little idea of where their lines are at and they literally just take a guess," Ernst wrote in the complaint to the commission.

Ernst wrote that he was worried one of his workers would strike a pressurized air pipeline owned by Continental Resources and be seriously hurt. High-pressure air pipelines have been used for enhanced oil recovery projects in Bowman County.

Staff for the Public Service Commission alleged in a complaint that Continental Resources failed to locate and mark the pipelines within 48 hours of a One-Call request, as required by North Dakota law.

Continental Resources agreed to pay a $7,500 fine as part of a consent agreement in which the company neither admits nor denies the allegations.

Ernst's company decided not to do the excavation due to safety concerns. In an interview Wednesday, Ernst said he was glad the matter was resolved, though he wished the resolution happened sooner.

"At least it will get their attention," Ernst said. "I didn't want to not do anything and read about someone getting killed someday."

Continental Resources declined to comment Wednesday.

With the fines approved Wednesday, the Public Service Commission has now issued more than $150,000 in fines for One-Call violations since taking over enforcement of the law in 2009. The fines go into North Dakota's general fund.

Also Wednesday, the PSC issued its first default order against a company that failed to respond to the agency's complaint regarding a One-Call violation. In that case, the PSC alleges that Big Horn Underground broke the law last June when it struck a natural gas pipeline in a subdivision under construction in Jamestown.

The PSC ordered a $1,100 fine. If the company doesn't pay, it will be turned over to a collection agency and regulators will notify the Secretary of State's Office the company should no longer be considered in good standing, Kalk said.

In addition, the PSC approved a $2,000 fine in a consent agreement with Plote Construction, which struck a natural gas pipeline in Williston in 2014.

The maximum fine is $25,000, which increased in 2013 from $5,000. The level of fine is determined by factors such as whether anyone was hurt, the amount of damages, if customers were affected and if it's a first-time or repeat offense, Kalk said.

Carlee McLeod, president of Utility Shareholders of North Dakota, said the increased fine potential and the enforcement by the PSC are improving safety.

"I think it is deterring people from disregarding the law, and that's really the goal," McLeod said.

Also Wednesday, a bill to strengthen the state's One-Call law got its first hearing in a House committee.

House Bill 1026 includes language clarifications in several areas of the law with the goals of protecting underground facilities and the people who work around them, as well as protecting the environment, McLeod said.

The PSC supports the bill, which had no opposition during the hearing.

"We want to prevent the next pipeline spill or the next community getting cut off from 911 access or the Internet," McLeod said.