Legislature Gives Final Approval To Lake Sakakawea Mineral Bill

BISMARCK — The North Dakota Legislature has approved a bill clarifying that the state does not own minerals under Lake Sakakawea, setting up a process to return an estimated $187 million in bonus, rent and royalty payments.

Supporters of Senate Bill 2134 say it’s about doing the “right thing” for citizens who retained their minerals when they lost land for the construction of the Garrison Dam, which created Lake Sakakawea.

“We need to make sure that we get the mineral ownership back to the rightful owner,” said Sen. Jessica Unruh, R-Beulah. “We need to clarify what the state owns and provide clarity and certainty for our judicial system.”

But opponents of the bill say the primary beneficiaries are likely the federal government and the oil industry, which was heavily involved with developing the legislation.

Rep. Marvin Nelson, D-Rolla, argues the minerals under Lake Sakakawea belong to the state of North Dakota. He points to a ruling from a district court judge that said the Missouri River is not distinguishable from Lake Sakakawea, a case that is now on appeal to the state Supreme Court.

“Basically people are trying to give away property that belongs to the state of North Dakota that’s worth billions of dollars,” said Nelson, who urged legislators to let the courts resolve the matter.

The House voted 75-15 on the final version of the bill Wednesday, April 19, after the Senate approved it late Tuesday in a 34-8 vote.

Gov. Doug Burgum has not publicly taken a position on the bill. Burgum also leads the Board of University and School Lands, which manages state-owned minerals and school trust lands.

Uncertainty over mineral ownership under Lake Sakakawea and the Missouri River has led to multiple parties claiming ownership of the same minerals, in some cases leading to lawsuits. The oil industry says the uncertainty deters development around the lake, which is in the heart of the Bakken.

The bill sets up a process to define the ordinary high water mark of the historic Missouri River channel as it existed before the Garrison Dam, starting with the 1950s survey of the river by the U.S. Army Corps of Engineers.

The bill includes $800,000 for the Department of Mineral Resources to hire a consultant to review that survey and recommend corrections when necessary. The public will have an opportunity for input and the North Dakota Industrial Commission will take action on the findings.

The fiscal impact of the bill is estimated to be $187 million, with up to $100 million coming from the Strategic Investment and Improvement Fund in 2017-19 and $87 million available through a line of credit from the Bank of North Dakota.

The bill also is projected to cost the state about $29 million in royalty payments for 2019-21.

The amended version of the bill removes $750,000 to reimburse individuals for legal fees incurred for suing the state over mineral title disputes.

An oil well is pictured along the shoreline of Lake Sakakawea in Williams County, N.D., on Wednesday, April 11, 2017. Amy Dalrymple/Forum News Service

Ron Ness, president of the North Dakota Petroleum Council, said the bill provides certainty for the oil industry.

“It is a path forward,” Ness said. “Without this bill, this is going on indefinitely.”

Josh Swanson, a Fargo attorney representing mineral owners who have ongoing disputes, said he thinks the bill is a good solution.

“Many mineral owners likely stand to benefit,” Swanson said.

Gary Hagen, a private mineral owner from Arizona who has been following the discussion, called the bill a “smokescreen.”

“The bill primarily benefits the federal government, the oil companies and the state, with a low probability that the mineral owners will actually get their stolen property back,” Hagen said.