May oil production up as companies become more efficient

WILLISTON, N.D. – Oil companies are drilling faster and focusing on core areas of the Bakken, leading to a surprise increase in North Dakota oil production in May, the state’s top regulator said Friday.

The state produced 1.2 million barrels of oil per day in May, a 2.7 percent increase despite a continued slowdown in oil activity, preliminary figures show.

Director of Mineral Resources Lynn Helms said although the number of drilling rigs operating in the state – 73 on Friday – is the lowest since November 2009, the rigs that remain are twice as efficient as they were two years ago.

In addition, operators are focusing on the core areas of the Bakken and Three Forks, which is boosting the initial production rates of new wells, Helms said.

While the rig count has dropped 67 percent, the drop in applications for drilling permits has dropped 48 percent, Helms said.

“Companies are still really optimistic about Bakken drilling, it’s just more a matter of when, not if,” Helms said.

At the end of May, North Dakota had an estimated 925 wells waiting on hydraulic fracturing crews, the same as the end of April.

Helms anticipates companies will continue to hold off fracking most wells until the West Texas Intermediate oil price is at $65 a barrel, or possibly $60 if fracking costs continue to decrease.

Drilling rigs are expected to return in a significant way when the price hits $70 a barrel, Helms said.

The price for WTI crude was $52.80 a barrel on Friday, according to Bloomberg.

Oil production stayed flat on the Fort Berthold Indian Reservation in May. Helms said the reservation has seen a more significant drop in rig count and well completions due to uncertainty about changes going on with the tribe’s oil regulations.

Natural gas production increased 6.4 percent to an average of 1.6 billion cubic feet per day, a new all-time high, according to the preliminary figures.

The percentage of natural gas flared remained unchanged since April at 18 percent.

However, the volume of natural gas flared increased 23.5 million cubic feet per day since April to 293 million cubic feet per day, Helms said.

About 52 percent of North Dakota oil was transported by rail in May, a drop of 2 percent since April, said Justin Kringstad, director of the North Dakota Pipeline Authority.

Judge will decide illegal dumping case


BISMARCK – A North Dakota Industrial Commission case against Black Hills Trucking seeking fines for illegal dumping allegations is heading to an administrative law judge.

The Industrial Commission filed a complaint last year against Black Hills Trucking, part of True Companies of Wyoming, for charges that the company improperly disposed of produced water, a byproduct of oil production.

Surveillance equipment recorded the company’s trucks dumping produced water on a Williams County gravel road in February and March of 2014, according to the complaint. A Department of Mineral Resources inspector also observed one incident, which led to a criminal charge against the driver.

The Industrial Commission proposed fines of $950,000 plus $1,526 in fees for the violations.

In a written response to the Industrial Commission, Black Hills Trucking denied the illegal dumping allegations. The company admitted that in one instance, a former employee improperly opened the drain valves on a truck and trailer that may have resulted in the discharge of a small volume of produced water on a gravel road.

Black Hills Trucking argued in its response that the complaint falls outside of the Industrial Commission’s jurisdiction and the fines are disproportionate to the gravity of the offense.

Because Black Hills Trucking did not agree to terms of a settlement with the Industrial Commission, the matter will be decided by an administrative law judge, said Department of Mineral Resources spokeswoman Alison Ritter. A hearing has not been set.

The North Dakota Department of Health also took enforcement action against Black Hills Trucking for violations including operating without a waste transporter’s permit. The company was ordered to pay $200,000 in fines with $259,000 suspended if it followed the terms of the agreement.

Leo Slemin, the driver who was charged in criminal court, pleaded guilty last year to violating the Industrial Commission’s rules. He was fined $3,000 and received a suspended jail sentence.

A coalition of labor unions who oppose a pipeline proposed by Bridger Pipeline LLC, also part of True Companies, points to the Black Hills Trucking violations in its criticism of the company’s track record.

Union calls company’s pipelines unsafe

BELFIELD, N.D. – A company proposing a new crude oil pipeline in southwest North Dakota has a poor track record of spills and can’t be trusted to build and operate the project safely, a coalition of labor unions says.

The Laborers International Union of North America plans to urge North Dakota regulators to reject a pipeline from Bridger Pipeline LLC, the same company responsible for an oil spill in the Yellowstone River this year.

“We support pipelines because they’re the safest, most efficient way to move oil, but only if they’re built, maintained and operated right,” said Evan Whiteford, a career pipeliner from Ray. “Unfortunately, when companies like Bridger hire contractors that apparently do low-quality work, and then fail to properly inspect and maintain the lines, accidents are more likely, the public is endangered, and our industry takes the blame.”

Tad True, vice president of Bridger, which is part of True Companies of Wyoming, said Wednesday he was surprised to hear about the protest from the labor unions and said their comments don’t paint an accurate picture of the company.

“The Yellowstone spill was a terrible accident and we sincerely regret that,” True said. “We have a very simple goal and that’s zero spills, zero injuries, zero lost time. That’s our goal, and we track that stuff very carefully and we take that extremely seriously.”

The Jan. 17 rupture of a Bridger pipeline caused an estimated 30,000 gallons of crude oil to spill into the Yellowstone River and temporarily contaminated the drinking water in Glendive, Mont.

Now Bridger proposes to construct a 15-mile crude oil pipeline in Billings and Stark counties that would run parallel to an existing Bridger pipeline and increase capacity by 125,000 barrels per day.

The 16-inch pipeline would allow more oil to be transported by pipeline and take trucks off the road, True said.

Representatives of labor unions whose members build pipelines in the U.S. and Canada plan to speak out against the project today during a North Dakota Public Service Commission hearing in Belfield.

The concerns about Bridger and its affiliated companies are much broader than the Yellowstone spill, Whiteford said. True Companies, which includes Bridger, Belle Fourche Pipeline Co., Black Hills Trucking and other companies, has a record of spills, safety incidents and law violations, the union representatives say.

“We want to raise the awareness that if we want this industry to keep going strong and smooth, we need to step up to the plate and make sure that these companies are held accountable for their actions,” Whiteford said.

The same union organization recently showed support for a different crude oil pipeline proposed by Dakota Access LLC.

Black Hills Trucking has been cited by North Dakota regulators for improperly dumping produced water and for operating without a permit.

Another example the labor representatives point to occurred in Wyoming. There, Bridger operated a crude oil pipeline after telling the Bureau of Land Management that the pipeline was no longer in use, said Christian Venhuizen, a BLM spokesman.

The BLM discovered the pipeline was being used last year when the pipeline spilled more than 25,000 gallons of crude oil, Venhuizen said. The BLM assessed Bridger $27,000.

True said that situation arose from turnover in the company’s land department and a permit that didn’t get handled properly.

In response to the comments about the company’s track record, True said the company goes above and beyond what is required by the federal Pipeline and Hazardous Materials Safety Administration. He pointed to the company’s largest pipeline system, the Butte Pipeline, which he said has an incident rate that’s 40 percent better than the industry average.

“Since 2008, we have effectively doubled our effort in terms of inspecting our pipelines, in terms of monitoring our pipelines, and we’ve done a tremendous amount of effort in terms of maintaining the integrity of our pipelines,” True said.

Public Service Commission Chairwoman Julie Fedorchak said Wednesday commissioners will ask Bridger about the recent Yellowstone River spill, including what the company learned from the incident and what steps are being taken to prevent future spills.

Commissioners also will review information they received from the labor unions regarding Bridger, Fedorchak said.

“We’ll talk thoroughly, like we do in all our hearings, about their construction techniques, monitoring systems they will have in place and their response plans in the event of a spill occurring,” Fedorchak said.

The hearing is at 9 a.m. MDT today at Belfield City Hall, 107 2nd Ave. N.E. For more information, contact the Public Service Commission at (701) 328-2400 or

OSHA turns an eye to safety incentive programs

WILLISTON, N.D. – Investigations into workplace injuries and deaths in North Dakota will now include a look at whether the employer had an incentive program that compromised safety.

The Occupational Safety and Health Administration plans to compile information about an employer’s safety incentive and whether it factored into an incident, said Eric Brooks, director of the Bismarck OSHA office.

Programs that give workers a bonus for working a certain length of time without a safety incident may actually compromise safety, Brooks said.

“It puts a lot of pressure on that employee that did suffer an injury to not report it,” Brooks said.

The Bismarck and Billings, Mont., OSHA offices plan to include companies’ incentive programs in their investigations through the end of the fiscal year, which ends in September, Brooks said.

The effort will focus on all industries in North Dakota, South Dakota and Montana, but in North Dakota, the oil and gas industry accounts for half of the state’s workplace fatalities.

“It’s not a violation to have an incentive program, we just want to make sure that it’s not compromising safety in and of itself,” Brooks said.

Once OSHA has gathered the information, officials can communicate with employers about incentive programs that are working and programs that may have the potential to create a problem, Brooks said.

“For those, we prefer to nip those in the bud before someone has to pay the ultimate price,” Brooks said.

Kari Cutting, vice president of the North Dakota Petroleum Council, said safety is No. 1 for the oil and gas industry, and companies have safety personnel who monitor incentive programs.

Cutting said it’s long been debated whether rewarding workers for reaching safety milestones will discourage them from reporting an incident, but she doesn’t think bonuses have that effect.

“If someone needs first aid or if they need stitches or if they break a bone, somebody will have witnessed it,” Cutting said. “It’s pretty difficult to fly under the radar.”

Jack Kolberg, safety consultant for the Associated General Contractors of North Dakota, said some employers are moving away from rewarding workers for not having safety incidents.

“People were actually encouraged not to do the right thing, not to report the hazards or injuries, because they were afraid of losing something,” Kolberg said.

Instead, some employers are adopting programs that incentivize turning in near-miss reports or identifying hazards to take corrective action before an incident occurs, Kolberg said.

“I think they’re way more effective than the old-style incentive programs,” Kolberg said.

North Dakota has had 11 workplace fatalities in the fiscal year that began Oct. 1. Six of those were from the oil and gas industry.

Williston wastewater deluge takes its toll

Randy Miller, a licensed North Dakota bait vendor, visits a marsh on Wednesday, June 24, 2015, in Williston, N.D., where he has reported fish kills. He no longer plans to trap minnows in the area as long as Williston continues discharging waste water into the marsh. Amy Dalrymple/Forum News Service

Randy Miller, a licensed North Dakota bait vendor, visits a marsh on Wednesday, June 24, 2015, in Williston, N.D., where he has reported fish kills. He no longer plans to trap minnows in the area as long as Williston continues discharging waste water into the marsh. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – Williston’s sewage lagoon system can’t handle the city’s expanding population and concerns are growing about the impact it’s having on the backwaters of the Missouri River and headwaters of Lake Sakakawea.

Six fish kills have been reported this year in or near a marsh where Williston discharges 19 million gallons of treated wastewater each week.

Stakeholders differ in how much blame they assign the city for the fish die-offs, or whether other factors contributed to their deaths. But water quality tests confirm that levels of ammonia where wastewater empties into the marsh have been toxic to fish.

Before the city’s population exploded, the city discharged wastewater from the lagoons into the marsh twice a year – once in the fall, and once in the spring, allowing a longer timespan for treatment to occur.

Now the lagoons are always full, forcing the city to empty wastewater into the marsh Monday through Friday.

City Public Works Director David Tuan says Williston can’t slow down the amount of wastewater it receives, and the best solution is fast-tracking a $105 million wastewater treatment plant it is building.

The city is spending more than $1 million extra to get a portion of the plant operational this fall, with it expected to be fully complete in 2017, Tuan said.

Until the new facility is operational, North Dakota Game and Fish Department Northwest Fisheries District Supervisor Fred Ryckman said he expects more fish kills in the marsh, and he worries about the long-term impact to the environment.

“This marsh is going to be so full of sewage and wastewater contamination and nutrients,” Ryckman said. “That marsh will be affected long after the city’s not discharging nearly as much stuff into it anymore.”

The situation is a side-effect of the Bakken oil boom in Williston, where rapid growth has forced the city to undertake multiple infrastructure projects at once and take on more than $200 million in debt.

Williston Mayor Howard Klug said if the state had returned oil tax revenue to Oil Patch communities sooner, the city could have addressed major infrastructure projects earlier.

“We’d already be done with all these projects,” Klug said.

Randy Miller of Williston, a licensed bait vendor who traps minnows and has worked around the marsh for 20 years, has tried to draw attention to the conditions in the marsh he sees steadily worsening.

Miller wrote a letter this spring to a U.S. Army Corps of Engineers official and the Friends of Lake Sakakawea after repeated fish kills prompted him to stop trapping minnows in the marsh.

“My biggest concern is what is being pumped across the levee and into the Missouri River and Lake Sakakawea. … The oil boom in North Dakota is starting to take its toll on our water environment and our wildlife,” Miller wrote.

City wastewater discharges into a marsh on Wednesday, June 24, 2015, in Williston, N.D. The city empties an average of 3.85 million gallons of wastewater into the marsh every weekday. Amy Dalrymple/Forum News Service

City wastewater discharges into a marsh on Wednesday, June 24, 2015, in Williston, N.D. The city empties an average of 3.85 million gallons of wastewater into the marsh every weekday. Amy Dalrymple/Forum News Service

Responding to rapid growth

Williston’s wastewater treatment system, which dates back to the 1970s, is a lagoon system designed for a population of 10,000 to 15,000 people, Tuan said.

“Lagoons are great for smaller towns where there isn’t a lot of growth,” Tuan said. “But as the city has grown very rapidly, it’s quickly overtaken our ability to treat all of that waste.”

North Dakota’s rapid oil development has pushed Williston to the top of a U.S. Census ranking as the fastest-growing city of its size in the nation for each of the past four years.

The 2010 Census put Williston’s population at just under 15,000. But by 2014, an estimated 31,000 people were living and working in the city, according to a North Dakota State University analysis of Williston’s service population.

The city’s service population is projected to be 49,000 by 2019.

Instead of discharging twice a year, the city now needs to discharge about 3.85 million gallons of wastewater each weekday, with a target of not exceeding 19 million gallons per week, said Gina Mottl, wastewater treatment superintendent.

In addition to handling more wastewater, the city has seen more industries dumping chemicals and new restaurants and other businesses disposing of fats, oils and greases into the system.

“All that kind of stuff that taxes your system quite a bit,” Tuan said.

Williston used to accept waste from crew camps, rural subdivisions and other portable toilets, but quit that in 2013 because it was an extra burden on the system, Tuan said.

Williston (N.D.) Public Works Director David Tuan explains the city's aeration ponds that treat waste water on Wednesday, June 24, 2015. Amy Dalrymple/Forum News Service

Williston (N.D.) Public Works Director David Tuan explains the city’s aeration ponds that treat waste water on Wednesday, June 24, 2015. Amy Dalrymple/Forum News Service

Temporary steps

Other steps the city has taken in response to the demand include adding chemicals to the water and more aeration equipment to speed up the treatment process, Tuan said.

The city also spent $7.5 million on a temporary plant while the new wastewater treatment plant was being developed, he said. But the temporary plant has not worked out as intended.

That facility includes a pipeline allowing the city to release treated wastewater directly into the backwaters of the Missouri without having an impact on the marsh.

The pipeline was used for a short time but has been offline since May 2014 after a fish kill in the discharge area.

The Corps of Engineers, which owns and operates the marsh for flood control, identified hundreds of dead game fish, including northern pike and walleye, over a span of a few days.

The North Dakota Department of Health, which regulates the city’s wastewater discharges, issued Williston a notice of apparent noncompliance and attributed the fish kill to a lack of ammonia treatment in the city’s wastewater.

“We feel that was definitely related to their wastewater discharge,” said Karl Rockeman, director of the Division of Water Quality.

After that incident, the city and the state health department decided together that the temporary plant was providing even less ammonia treatment and discharging through the marsh was the “least damaging option,” Rockeman said.

The equipment in the plant is still being used but not to the level it was intended, Tuan said, and it will be incorporated into the permanent wastewater plant.

Dead fish float belly up after a fish kill from May 17-19, 2014, in the backwaters of the Missouri River where wastewater was discharged from the Williston, N.D., treatment plant. (Photo courtesy of U.S. Army Corps of Engineers)

Dead fish float belly up after a fish kill from May 17-19, 2014, in the backwaters of the Missouri River where wastewater was discharged from the Williston, N.D., treatment plant. (Photo courtesy of U.S. Army Corps of Engineers)

Cause of fish kills debated

One other fish kill was reported in 2014 and six fish kills have been reported between March and the end of May in that area, Rockeman said. Most incidents involved dead minnows reported in the marsh, but one other incident involved game fish in the Missouri River backwaters.

On March 16, the Corps documented the dead fish as primarily carp, as well as northern pike, sucker and channel catfish.

The U.S. Fish and Wildlife Service documented 31 dead fish and captured 12 live fathead minnows for analysis, said Ryan Moehring, public affairs specialist.

“What we learned is fluid changes in the gills, kidneys and livers indicated that there’s likely some sort of acute water quality issue causing fish mortality,” Moehring said.

City and state health department officials say there are no tests that conclusively attribute the other fish kills to the city’s wastewater. Naturally occurring factors, such as the amount of of oxygen in the marsh, could contribute to the deaths, Rockeman said.

The marsh also is where a majority of Williston’s stormwater runoff ends up, and that could contain pollutants, fertilizers or other chemicals, Tuan said.

“I think there are a lot of other impacts that people aren’t giving enough credit to,” Tuan said. “They’re inclined to point the finger at us. But there are a lot of other things that are happening that I don’t think people are looking closely enough at.”

Both Ryckman, with Game and Fish, and Corps officials attribute the fish kills to high ammonia concentrations from the city’s wastewater.

“We’re not saying fish don’t die or wildlife don’t die because of natural reasons,” said Tim Gouger, contingency program manager for the Corps. “That does happen. But it’s also hard to ignore that there are acute toxic levels of ammonia in the marsh and sometimes in other areas, and there’s fish kills in proximity to those things.”

During this past year, North Dakota had virtually no other fish kills in the winter or during spring conditions when ice melted, Ryckman said.

“We haven’t had any problems with fish kills other than the situation in Williston,” Ryckman said. “It’s not something that’s widespread. It’s somewhat unique to that area.”

At times, the fish kills have occurred when the city was not discharging its wastewater, Mottl said. Also, city staff take water quality samples each time a fish kill is reported and have found that the ammonia concentrations were not toxic in the areas where the fish died, she said.

However, tests submitted to the health department shows that ammonia concentrations in the marsh have exceeded toxicity levels several times this year, and since March those instances have increased, Rockeman said.

While the marsh is primarily home to minnows, the backwaters of the Missouri River used to have large concentrations of northern pike and walleye, Ryckman said.

“Up until these last few years, that was a tremendously popular place to fish,” Ryckman said. “All that has basically been lost now because of the toxic and poor quality flows. The fishermen have been seriously impacted there as well.”

Miller said he would no longer fish in the Missouri River backwaters.

“I want to eat the fish I catch,” he said.

While the backchannel of the Missouri River is hurt by the wastewater, the effects decrease in the main river channels, Ryckman said.

“It’s still not a good thing to put in the river,” Ryckman said. “But it’s a small volume compared to the flow of the river.”

A man fishes Wednesday, June 24, 2015, in the backwaters of the Missouri River in Williston, N.D., as the U.S. Army Corps of Engineers pumps water from the Williston marsh over the levee. A May 2014 fish kill in this area was attributed to the city of Williston's waste water, according to the North Dakota Department of Health. Amy Dalrymple/Forum News Service

A man fishes Wednesday, June 24, 2015, in the backwaters of the Missouri River in Williston, N.D., as the U.S. Army Corps of Engineers pumps water from the Williston marsh over the levee. A May 2014 fish kill in this area was attributed to the city of Williston’s waste water, according to the North Dakota Department of Health. Amy Dalrymple/Forum News Service

Out of options

Although Williston is not currently able to treat for ammonia, the city is meeting other health department standards, Rockeman said.

To be in compliance with its health department permit, Williston must meet certain milestones with the construction of a new plant. So far, the city is ahead of schedule, and the permit requires the plant to be complete by Nov. 1, 2016, Rockeman said.

Construction on the new facility began last fall, with crews working from 3:30 a.m. to 9 p.m. six or seven days a week to meet an expedited schedule, said Darrell Schneider Jr., construction services manager with AE2S, which designed the facility.

When it’s complete, the new facility will be able to accommodate a population of 60,000, with the ability to expand up to 100,000 if the population grows, Tuan said.

A portion of the plant is expected to be operational by this fall that could treat 2 million gallons of wastewater per day and remove the ammonia, Schneider said. The remaining 500,000 gallons of wastewater the system handles each day would go through the existing lagoon system until the plant is complete.

The Army Corps of Engineers owns and operates the marsh for flood control and pumps water over a levee five days a week into the Missouri River.

While Corps officials are also eager to see the plant begin to operate this fall, they warn that the situation could hit a critical stage soon as the elevation of the marsh drops to a point where they’re no longer able to pump, Gouger said.

The Corps can no longer pump from the marsh once it hits a target elevation, and the water was about 6 inches above that level last week, Gouger said.

“It’s better for the aquatic habitat if we keep pumping, but we cannot do it for their wastewater treatment plant purposes,” he said.

He worries that the scenario will cause more toxic levels of ammonia to build up in the marsh.

“And then when we do start pumping, you could pump that acutely toxic level of ammonia over the levee and create impacts to the aquatic habitat,” Gouger said.

Ryckman also anticipates that the issues will worsen this summer.

“The poor water quality will lend itself to more fish kills and more water quality problems this summer,” he said.

City officials say the concern about the Corps no longer being able to pump has been on their radar since April and they’ve discussed it with health officials.

“At this time, we just don’t have any other options,” Mottl said.

The health department’s stance is the city should focus all efforts and resources on completing the new plant, Rockeman said.

Williston officials, who coordinate weekly with the health department, the Corps and other interested agencies, are trying to do everything they can to protect the Missouri River, which is also the water source for Williston and surrounding communities, Tuan said.

“The water quality in general is one of the biggest priorities for us, not just on the wastewater end but on the water treatment end,” Tuan said. “Protection of the Missouri River ecosystem is No. 1 in terms of our priority.”

The other stakeholders acknowledge that the rapid population growth has put Williston and the health department in a tough spot.

“There’s just lot of things about this whole Oil Patch and oil development now,” Ryckman said. “Everything happened way too fast. There’s a lot of people that said it should have been slowed down and it wasn’t.”

Tribal non-profit tackles oil regulation

John Zeller, right, a truck driver who hauls water for the oil industry, gets his photo taken Tuesday, June 30, 2015, in Mandaree, N.D., for a new photo ID required by the West Segment Regulatory Commission to monitor businesses who operate on the Fort Berthold Indian Reservation. Amy Dalrymple/Forum News Service

John Zeller, right, a truck driver who hauls water for the oil industry, gets his photo taken Tuesday, June 30, 2015, in Mandaree, N.D., for a new photo ID required by the West Segment Regulatory Commission to monitor businesses who operate on the Fort Berthold Indian Reservation. Amy Dalrymple/Forum News Service

MANDAREE, N.D. – A newly formed commission to regulate oil and gas activity for a segment of the Fort Berthold Indian Reservation launched this week, but questions remain about how it will work with existing tribal agencies.

Hundreds of oilfield workers attended mandatory meetings in Mandaree Tuesday and Wednesday for the West Segment Regulatory Commission, a new group that aims to monitor and regulate businesses operating in the Mandaree area of the reservation.

Fort Berthold accounts for about 30 percent of North Dakota’s oil production, with much of it concentrated in the Mandaree area. That area also has experienced recent spills and environmental incidents, including the pipeline break a year ago that spilled 1 million gallons of brine near Lake Sakakawea.

The group is still developing its rules, but it aims to address issues related to environmental impacts from oil development as well as reduce drug trafficking, human trafficking and other crimes that have increased along with the jump in population.

Elton Spotted Eagle, the commission’s chief compliance officer, told attendees at a meeting this week that the goal is not to chase away companies, but to have more people monitoring the activity.

“We want to make sure we have our land for our children, our grandchildren,” said Spotted Eagle, who is one of six compliance officers. “We want to hang on dearly to what we have.”

The Three Affiliated Tribes Tribal Business Council approved the charter for the new nonprofit organization, but Chairman Mark Fox opposed it.

Fox said Wednesday he supports the intentions of the group and believes regulations ought to be strengthened to protect the land, but he thinks it should be the tribal government’s job to do that.

“My biggest concern is where does that put our other regulatory agencies?” Fox said. “I want to see how that plays out.”

The West Segment Regulatory Commission’s charter says it will work with state and tribal law enforcement and regulatory agencies.

Initially, all workers and companies that do business in the West Segment will need to register with the commission, get photo ID cards and radio-frequency identification tags to allow for vehicle tracking.

Vincent Wright, a truck driver who hauls water for the oil industry in the Mandaree area, was among the workers who filled out paperwork and got his photo taken for a new identification card this week. Wright said he didn’t have any objections to the new requirements.

“It’s for the safety of the people who live here and are going to be here,” Wright said.

Several who attended the meetings objected to the price of the vehicle monitoring system – about $1,400 – that will be required for every semi that operates in the West Segment.

Cameron Keluche, vice president of Native Resource Management, hired by the West Segment to develop the monitoring system, said the specific technology vendor was chosen because it will allow compliance officers to track illegal dumping. The commission will work in conjunction with other tribal agencies that will have access to the tracking information, Keluche said.

The group also says it will conduct background checks and drugs tests on workers, enforce safe driving rules, test soil and water quality and monitor development such as man camps.

Ron Ness, president of the North Dakota Petroleum Council, said the industry group has been meeting with the West Segment and Tribal Business Council to seek clarification about the new commission. The industry is concerned about duplication of rules and additional fees piled on top of a regulatory process that already involves federal, state and tribal agencies, Ness said.

“We support the goal of increased safety but would rather see the tribal government allocate more resources to police, oversight and other existing regulatory authorities than create a new regulatory entity,” Ness said.


Hearings conclude for Dakota Access, but N.D. regulators say more work to do

WILLISTON, N.D. – Many unresolved issues remained Friday after the Public Service Commission concluded its final public hearing on what would be the largest crude oil pipeline in North Dakota.

Dakota Access LLC is still negotiating with landowners for more than 40 percent of the 358-mile pipeline route proposed in North Dakota.

The company, a subsidiary of Energy Transfer Partners, also has yet to reach an agreement with Enbridge about concerns the competitor has about areas where major crude oil pipelines will be close together and in some cases cross.

“It’s pretty clear after today that there’s more work to be done on this project,” Commissioner Randy Christmann said following a nearly 10-hour hearing in Williston.

Commission Chairwoman Julie Fedorchak said while commissioners received a lot of input from concerned landowners, fewer than a handful of people said they flat-out oppose it.

“I continue to be hopeful that the company will reach a voluntary agreement with a vast majority of landowners along this line,” Fedorchak said

Dakota Access proposes a 1,134-mile pipeline that would start near Stanley and carry crude oil to Patoka, Ill. The pipeline would initially carry 450,000 barrels per day and could be expanded to 570,000 barrels per day.

Dakota Access has acquired easements for 58 percent of the route mileage in North Dakota, said Micah Rorie, senior manager of land and right of way. That figure has not changed much since the PSC held similar public hearings in Mandan and Killdeer.

“At that rate, it’s going to be a long time before you get these easements acquired,” Christmann said.

While the level of voluntary participation is not a requirement for a PSC permit, it signals how acceptable a project is to the public, said Commissioner Brian Kalk.

Rorie said most negotiations are tied up with attorneys who represent about two-thirds of the remaining landowners, and he’s confident they’ll be finalizing more agreements soon.

Most landowners who testified Friday said they support the overall pipeline project, but they voiced strong objections to the way the company has handled negotiations.

“The company came into North Dakota and probably didn’t understand the culture that exists here,” said Vawnita Best, who testified on behalf of a grassroots group called the Greater McKenzie County Stewardship Group.

Best, who also is a McKenzie County commissioner, said she’s heard from many landowners who felt strong-armed or threatened with eminent domain by Dakota Access representatives.

Rorie testified that right-of-way agents go through an extensive code of conduct training and are instructed to refer questions about eminent domain to managers.

Some landowners have grown accustomed to getting route changes for small gathering pipelines, but changing the route is more difficult with such a large project, Rorie said. That is being interpreted by some as an unwillingness to work with landowners, he said.

Commissioners also pressed Dakota Access to seriously consider suggestions from private landowners when they have a strong case for route changes, including one alternative proposed to avoid rugged terrain near the Heart River.

Enbridge, a majority owner and operator of North Dakota Pipeline Co., intervened in the PSC hearing to voice concerns about areas where Enbridge pipelines will be in close proximity to the Dakota Access.

Robert Steede, regional director of operations, testified that Enbridge does not oppose the Dakota Access project, but wants to ensure the safety of its own operations.

About 13 miles of existing Enbridge pipelines between Stanley and Tioga are near the proposed Dakota Access route, and the two pipelines would cross seven times, Steede said. In addition, the construction timeline for Enbridge’s Sandpiper project could overlap with the construction of the Dakota Access project.

Enbridge asked the PSC to require that Dakota Access install its pipeline 50 feet away from existing Enbridge pipelines. Steede said that would ensure that construction equipment would not accidentally damage the existing Enbridge line and the separation would prevent confusion for landowners over which company was responsible for reclamation.

Enbridge also wants to ensure that the two companies will operate separate construction areas for its upcoming projects, Steede said.

Christmann said while he appreciates Enbridge’s concern for safety, he fears requiring all pipelines to be 50 feet apart would add more burden on landowners who already have multiple pipelines.

“Aren’t we just enhancing that landowner fatigue when two companies can’t come together and work together on a project?” Christmann said.

The issue of landowner fatigue was a common theme Friday, including testimony from Mountrail County landowner Brian Rice whose land would have the Dakota Access and Sandpiper in addition to existing pipelines.

“The question becomes, how much do you want us to give?” Rice asked.

Several members of area labor unions voiced support for their project and assured landowners that they work hard to protect the environment.

“We’re trained to take care of the right-of-way like it’s our own backyard,” said Matt Duncombe of East Grand Forks, Minn., a Laborers International Union of America union steward who has led environmental crews.

The Midwest Alliance of Infrastructure Now, a coalition that includes labor unions, the Greater North Dakota Chamber and others, also voiced support for the pipeline.

Kalk said the Dakota Access proposal is the most complex pipeline case he’s handled, and he wouldn’t venture a guess on when the utility regulators would make a decision on a permit.

“I’ve never come out of a hearing with this many variables,” Kalk said.

Royalty owners group to gather in Minot for conference

MINOT, N.D. – With North Dakota’s oil industry producing billions of dollars each year for private mineral owners, a group that aims to educate those royalty owners is growing in numbers.

The North Dakota chapter of the National Association of Royalty Owners expects more than 100 people will attend its annual conference this week in Minot, with about half coming from out of state.

Chapter president Dean Zaderaka said the conference has grown each year since the North Dakota chapter formed three years ago to represent private mineral owners. The group now has between 200 and 300 members, he estimates.

“It’s mainly about education of mineral owners so they can understand how to negotiate a lease and the things to be aware of so they have a fair lease with the oil company,” Zaderaka said.

Private royalties from North Dakota oil and gas production were estimated to be more than $4 billion in 2013, according to a North Dakota State University economic impact study.

About 40 percent of private mineral owners live in North Dakota, according to the study.

With so many mineral owners living out of state, that makes it extra challenging for royalty owners to stay up to date on factors in the oil industry that will affect their royalty checks, Zaderaka said.

First International Bank and Trust, where Zaderaka works as a senior trust officer, works with North Dakota mineral owners who live in 25 different states.

Mineral owners who are North Dakota residents also have a lot of questions about negotiating leases and other issues, said Sue Satterthwaite of New Town, who is chapter secretary.

Satterthwaite and her husband, Gary, the chapter treasurer, own minerals and have found the organization to be a good educational resource.

“There’s not a standard lease ever, everything is negotiable, and a lot of people misunderstand that,” Satterthwaite said.

The conference, Thursday and Friday at the Grand Hotel in Minot, covers topics including rail safety, a North Dakota legislative update, state tax policy, mineral appraisals, pipelines and legal issues. A bus tour of the Bakken is scheduled for Thursday morning. Lisa Westberg Peters, author of “Fractured Land: The Price of Inheriting Oil,” is the keynote speaker on Friday.

Registration is $125 for members and $150 for non-members. For more information about the conference, visit or call toll-free (855) 622-7126.


Fewer well completions behind dip in oil production

WILLISTON, N.D. – Oil well completions dropped sharply in April, contributing to the slight decrease in North Dakota’s monthly oil production.

Lynn Helms, director of the Department of Mineral Resources, said in his monthly update on oil production released Friday that operators added 94 new oil wells in April, compared with 244 that were completed the previous month.

North Dakota oil production fell 1.8 percent in April to less than 1.2 million barrels per day, according to preliminary figures.

To maintain production near 1.2 million barrels per day, companies need to complete 110 to 120 wells each month, Helms said.

The number of drilling rigs operating in North Dakota was 77 on Friday afternoon, compared with 83 that were operating in mid-May.

“Operators have each been experimenting with running one to two fewer rigs than their planned 2015 minimum to see if drill times and efficiencies will continue to improve,” Helms wrote, adding that weak low oil prices are driving the slowdown.

Ron Ness, president of the North Dakota Petroleum Council, said he doesn’t expect the rig count to go much lower if current conditions continue. The state had 186 rigs operating in mid-December when oil prices started to fall, he noted.

“It seems to me that we’re fairly near bottom,” Ness said.

At the end of April, there were an estimated 925 wells that had been drilled but waiting on hydraulic fracturing crews, an increase of 45 from March, according to Helms.

Ness said he expects the number of well completions to remain flat while companies complete enough to maintain cash flow and hold off on others until prices recover.

“I expect companies to continue to use that inventory of uncompleted wells as kind of their grain bin,” Ness said.


Vital Oil Patch water project celebrated

WILLISTON, N.D. – An expanded water treatment plant in Williston is making it possible for the entire region to grow.

Officials gathered in Williston on Wednesday to celebrate the expansion of the Williston Regional Treatment Plant, which treats water from the Missouri River that is piped to rapidly growing communities in the Oil Patch.

The Western Area Water Supply Project, a response to the needs of the booming population, provides high-quality drinking water to 70,000 people.

“Without water, there’s no growth,” said Jaret Wirtz, executive director of the Western Area Water Supply Authority. “Housing developments cannot be built. Businesses cannot open.”

The recently completed expansion of the treatment plant brings the capacity to 21 million gallons per day, allowing it to serve an additional estimated 20,000 people.

Gene Veeder, McKenzie County economic development director, said the water treated in Williston is playing a major role in housing developments in Watford City.

“This is without a doubt the most significant economic development project this area has ever seen, and likely will ever see,” Veeder said.

Gov. Jack Dalrymple participated in the celebration, noting that the state has committed about $290 million in funding for the Western Area Water Supply Project.

“Anything short of this project would not have been adequate to keep up with the growth and industry development we’ve seen,” Dalrymple said.

About 540 miles of pipelines have been installed for the project, with another 570 miles under construction and an additional 65 miles under final design.

The water project serves 11 cities in Burke, Divide, McKenzie, Mountrail and Williams counties. It’s projected to reach 160,000 water users by 2038.