BISMARCK – During a contentious hearing about drilling for oil in the Killdeer Mountains, a critic of Lynn Helms, North Dakota’s top oil and gas regulator, inadvertently called him “Mr. Hess.”
The comment didn’t seem intentional, but it reflected an underlying question some people have about Helms and potential conflicts of interest involving Hess Corp. and others in the oil industry he once worked for.
Helms worked for Texaco and later what is now Hess Corp. before becoming director of the North Dakota Industrial Commission Oil and Gas Division in 1998. He’s served as director of the Department of Mineral Resources since 2005.
Helms said he takes his independence as a regulator seriously and works hard to avoid the appearance of conflicts of interest.
“We do have a very, very strict ethics policy,” Helms said. “For myself, I hold myself to an even stricter policy.”
The North Dakota Industrial Commission had an ethics policy in place when Helms assumed his role, but he added additional guidelines to prevent possible conflicts for employees of the Oil and Gas Division.
For example, employees are not allowed to acquire mineral rights unless they inherit them or marry someone who has them, Helms said.
Helms and his family own minerals at their family ranch in South Dakota, but his family does not own minerals in North Dakota, he said.
Employees are not allowed to have more than $5,000 in stock of an oil and gas company.
Helms said he used to have a significant amount of Hess and Texaco stock, but he divested himself of that and does not own any oil and gas stock under the $5,000 limit the policy allows.
“I refuse to own any,” Helms said. “I think it would, if nothing else, create the appearance of a conflict of interest.”
Even his retirement plan is immune, Helms said.
“My pension benefits from Hess are completely independent of any decision I would make,” Helms said.
Anne Marguerite Coyle, a Jamestown College biology professor who opposed the Hess plan to drill in the Killdeer Mountains, referred to Helms as Mr. Hess during the hearing. Coyle said Helms should have at least stepped back and let someone else handle the issue that had widespread opposition.
“It was a direct conflict of interest,” Coyle said. “He had worked for Hess for 18 years.”
Helms recommended in favor of the drilling plan, which the Industrial Commission unanimously approved, with some stipulations to try to address some of the concerns.
Coyle said Helms misrepresented data she had gathered about eagle habitat in the Killdeer area and downplayed the significance of cultural artifacts.
“He is very good at promoting oil,” Coyle said. “With his industry experience, I think that’s a perfect position for him.”
Helms said his industry experience gives him the knowledge that he needs to regulate the industry.
“I spent a decade sitting on the other side of the table testifying to the Industrial Commission with regard to things that Hess wanted to do in the state,” Helms said. “I really do understand what’s going on with that expert witness and what they may or may not be telling us that we need to know.”
His background working for industry can sometimes be an easy target for critics, Helms said.
“When a discussion of the issues fails or the science isn’t there for somebody who’s passionate about what they believe in or feel, it makes it an easy target to criticize me or bring it up as a criticism,” Helms said. “It’s painful, it always is. But part of this job is developing a thick skin so that when you have to do something that one of your former co-workers in industry doesn’t like, you can go ahead and do it.”
Carol Booth, communications manager for the Interstate Oil and Gas Compact Commission, which consists of the oil- and gas-producing states, said it’s common for oil and gas regulators to have industry experience.
“You’ll be hard pressed to find a state regulator who has not worked for industry,” Booth said.
In Colorado, three of seven appointed members who serve on the Colorado Oil and Gas Conservation Commission are on the payroll of companies the group regulates, said Peg Perl, attorney for Colorado Ethics Watch, a government watchdog group. Perl said she testified against that process last week to Colorado legislators.
Booth said some regulators have it written into their contracts that they will step aside and let someone else handle a particular issue if there is a conflict of interest.
Helms said he once recused himself from an issue that involved a former classmate from the South Dakota School of Mines and had someone else in his department handle the matter.
Helms said he gets frustrated when people confuse him with Ron Ness, who leads the North Dakota Petroleum Council, which is an industry group. Although the Department of Mineral Resources is involved with promoting oil and gas development, it devotes more attention to regulating the industry, Helms said.
Helms also objects to being called a cheerleader for the oil industry. He points to 12 strict rules the commission implemented about a year ago, some involving the regulation of hydraulic fracturing, that met strong opposition from the industry and other groups.
“I am not a cheerleader for the industry. I am a proponent of the industry because I recognize what it does for North Dakota’s economy and all for the government and private investment and jobs that it can create,” Helms said.