Oil tax trigger takes effect, but impact minor

BISMARCK – Low oil prices triggered a state tax incentive to take effect Tuesday, but its impact to state revenues will be minor.

The tax incentive known as the large trigger could have cost North Dakota $30 million a month or about $1 million a day in oil tax revenues, but lawmakers last session repealed the incentive for most new oil wells, Tax Commissioner Ryan Rauschenberger has said.

Instead, the large trigger will only apply to some older and lower-producing wells and will not affect new oil production from Bakken and Three Forks wells.

The large trigger took effect Tuesday because the price of West Texas Intermediate oil averaged below $55.09 for five consecutive months.

The incentive expires Dec. 31. Starting Jan. 1, the state’s oil extraction tax will be reduced from 6.5 percent to 5 percent, for an overall oil taxation rate of 10 percent.

The new law creates a “high price trigger” which boosts the tax rate to 6 percent if the price of West Texas Intermediate oil averages above $90 for three consecutive months.

UPDATED: SD OKs major pipeline but official calls company ‘abusive’

PIERRE, S.D. – The South Dakota Public Utilities Commission voted 2-1 Monday to approve the Dakota Access Pipeline, with the dissenting commissioner blasting the company for “trampling” on the property rights of citizens.

South Dakota is the first state to approve the 1,134-mile pipeline proposed by Energy Transfer Partners that would carry Bakken crude from North Dakota to Patoka, Ill.

Commissioner Gary Hanson, who voted to deny the permit, said the Texas company was “abusive” when it filed lawsuits against landowners to survey their property, a practice the company also did in North Dakota.

“Bringing lawsuits against the citizens of South Dakota before receiving a siting permit is reprehensible. … This makes me suspect of the willingness to negotiate with our landowners long-term,” Hanson said.

Hanson said he thinks Dakota Access ought to apologize to those South Dakota landowners and reimburse them for legal expenses, but added he doesn’t have the authority to order the company to do so.

The proposed $3.7 billion pipeline would initially carry 450,000 barrels of crude oil per day and could be expanded to 570,000 barrels per day, making it the largest oil pipeline that would originate in North Dakota.

In South Dakota, the pipeline travels more than 270 miles and extends through 13 counties. The pipeline route enters South Dakota just east of the Missouri River in Campbell County and extends southeast to the Sioux Falls area, exiting at the South Dakota-Iowa border in Lincoln County.

The commission’s approval of the permit is contingent on several conditions that aim to protect landowners along the route, such as requirements for construction and reclamation.

“It is crucial that we do this right so that our farmers and ranchers can get back to doing what they do best, producing food for the world,” Chairman Chris Nelson said.

Commissioners said they heard passionate opposition from landowners during their review of the pipeline route, including at a hearing in Sioux Falls attended by 400 people. Nelson, who owns land in Aurora County, said he’s asked himself 100 times how he would feel if he received a notice that Dakota Access would cross his land.

“Frankly, I say to the landowners, I wouldn’t be any happier than any of you all are or have been,” Nelson said.

But commissioners had to base their decision on a standard set by state law, and Nelson and acting commissioner Rich Sattgast said they think the company met its burden of proof.

“Quite simply, I find that throughout this process Dakota Access has demonstrated that they have a legal right to have this permit issued to them,” Nelson said.

Hanson, however, argued that the pipeline route would unduly harm future development for the communities of Harrisburg and Tea in the Sioux Falls area.

“It’s the highest growth area, economic and population growth area of this state,” Hanson said. “From that standpoint, it just needs to be moved a distance away.”

Hanson said he suspects the decision to grant the permit will be appealed to the South Dakota court system.

“I know that my remarks will be a part of that process,” Hanson said. “I hope that somehow along the line the shortcomings of this project will be corrected so we don’t live to regret our actions here.”

Peggy Hoogestraat, a member of Dakota Rural Action who owns land along the route west of Sioux Falls, said she was disappointed in the decision, but thought the commissioners did attempt to address many issues the grassroots conservation group raised.

“I know that they heard our voices, and that was a good thing,” Hoogestraat said.

The group still needs to review several pages of new information from the hearing before deciding whether to appeal, she said.

Energy Transfer Partners said in a statement Monday the company was pleased with the decision and anticipates beginning construction in South Dakota early next year. The company has negotiated voluntary easements from 91 percent of the 743 routes along the South Dakota route.

“This is an important infrastructure project that will provide a more direct, cost-effective, safer and environmentally responsible manner to transport this crude oil,” the company said.

The Midwest Alliance for Infrastructure Now, a coalition with members in North Dakota, South Dakota, Iowa and Illinois, applauded the commission’s decision.

“Projects like Dakota Access help to build on America’s energy security, deliver energy products in a safe and efficient manner, and create new economic opportunities for South Dakota and the Midwest,” said Ed Wiederstein, MAIN Coalition chairman.

The pipeline route is still under review in other states, including by the North Dakota Public Service Commission.

Compromise possible for Williston crew camps

This housing facility for Rockwater Energy Services in Williston, N.D., pictured Tuesday, Nov., 24, 2015, would close in 2016 under an ordinance adopted by the Williston City Commission unless officials reach a compromise. Amy Dalrymple/Forum News Service

This housing facility for Rockwater Energy Services in Williston, N.D., pictured Tuesday, Nov., 24, 2015, would close in 2016 under an ordinance adopted by the Williston City Commission unless officials reach a compromise. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – Williston city commissioners voted 3-2 Tuesday in favor of an ordinance that eliminates crew camps next year, but signaled they want to work on a compromise to keep some workforce housing open.

The Williston City Commission approved the second reading of an ordinance that allows camps in city limits and the one-mile extraterritorial area to continue operating through June 30.

If the commission did not approve the ordinance Tuesday, the temporary housing permits for crew camps would have expired Dec. 31.

Commissioner Deanette Piesik was one of two commissioners who opposed the ordinance, which requires all camps to be removed by Sept. 1.

“I think the timeline in this ordinance has not been set fairly,” Piesik said. “I am concerned about the industry and losing any of our industry.”

Supporters of eliminating crew camps say it’s time for temporary housing to be phased out now that permanent housing has caught up with the population growth. Developers of apartment complexes warned at the city’s Nov. 10 meeting about consequences to long-term investments if crew camps continue to operate.

But oil company representatives say they continue to need temporary housing for rotational workers.

Piesik proposed an amendment that would have eliminated all but about 1,000 of the 3,600 workforce housing beds in the city. Piesik’s proposal, which also raised fees for the camps, had a final sunset date of 2019 for those camps that continued to operate.

While several commissioners said they were willing to consider a compromise, Piesik’s motion failed 1-4 because commissioners thought such a substantial change should go through the Planning and Zoning Commission.

Mayor Howard Klug said commissioners could approve the ordinance with the June 30 sunset date, but immediately start working on a compromise and have it back before the commission in January.

Commissioner Brad Bekkedahl said he favors an approach that ramps down on the number of crew camp beds rather than eliminate them all at once.

Bekkedahl, also a state legislator, said the city loses state tax dollars through the oil and gas formula when it loses employees in the industry. He pointed out that Williams County decreased its workforce housing beds by 2,400 beds in June.

“I think there’s a lot of factors that are involved in this decision versus just simply closing every crew camp facility,” Bekkedahl said.

At the start of Tuesday night’s discussion, Klug said the commission had been asked whether anyone had a personal interest in the temporary housing issue.

Klug polled the commissioners and all said they did not own crew camps, hotels or apartment buildings, including Klug who said he sold his interest in the El Rancho Hotel last December.

Commissioners also had a lengthy discussion with their lawyer about a protest submitted by Dickinson attorney Randall Sickler on behalf of Target Logistics and Lodging Solutions. Under the city’s code, a protest to a zoning ordinance made by 20 percent of affected owners requires a supermajority to approve it.

But after discussion about how the legality of the protest needed to be analyzed, Sickler withdrew the protest.

“We have a fear that this is turning this upside down,” Sickler said.

Operators of temporary housing facilities who attended the meeting said they’re encouraged that city commissioners plan to continue working on a solution.

“It’s nice to hear they at least have a tone of compromise,” said James Morken of West Fargo, who constructed three housing facilities that would be affected by the ordinance.

Piesik cautioned about the impact to the industry if commissioners delay too long in adopting a compromise.

“If we don’t have a firmer timeline, what is the incentive for them to stay?” Piesik said. “They might as well start looking and shopping now.”

Hess finishes work to ease excess flaring

Natural gas is flared at a compressor station south of Ross, N.D., on Friday, Nov. 20, 2015, due to maintenance that was ongoing at the Hess Tioga Gas Plant. Amy Dalrymple/Forum News Service

Natural gas is flared at a compressor station south of Ross, N.D., on Friday, Nov. 20, 2015, due to maintenance that was ongoing at the Hess Tioga Gas Plant. Amy Dalrymple/Forum News Service

TIOGA, N.D. – Crews completed maintenance work at the Hess Tioga Gas Plant over the weekend after days of significant natural gas flaring in the region.

North Dakota’s largest natural gas processing plant restarted Sunday afternoon, Hess Corp. said Monday. The maintenance remedies a problem that was causing noticeable flaring at the plant, said spokesman John Roper.

The plant shut down last Wednesday and caused more flaring at the plant, along with flaring near Tioga, Ray, Ross and Keene.

The shutdown required the plant to flare an estimated 50 million cubic feet of natural gas per day, according to an email Hess sent to state regulators. Another 88 million cubic feet per day of natural gas was estimated to be flared at six compressor stations.

Lynn Helms, director of the Department of Mineral Resources, estimated that the plant outage would increase statewide natural gas flaring by 1.4 percent in November.

Companies that experienced more flaring at the well sites will be required to comply with state gas capture targets, spokeswoman Alison Ritter said.

The maintenance work was on the plant’s amine system, which removes hydrogen sulfide from the gas stream that comes from older non-Bakken wells, according to an email from Hess to regulators.

A chemical wash of a tower cleared out buildup that was restricting flow, the company told regulators. Hess is now working to eliminate or minimize buildup in the tower to prevent future plant shutdowns.

Hess completed a major upgrade to the Tioga plant in 2014, bringing the total processing capacity to 250 million cubic feet per day.

North Dakota oil and gas operators flared 19 percent of natural gas produced in September, the most recent figures available, or a total of about 300 million cubic feet per day, according to the Department of Mineral Resources.

Gas plant repairs will temporarily add to flaring

Natural gas is flared Friday, Sept. 25, 2015, at the Hess Corp. gas plant in Tioga, N.D., due to maintenance issues. Amy Dalrymple/Forum News Service

Natural gas is flared Friday, Sept. 25, 2015, at the Hess Corp. gas plant in Tioga, N.D., due to maintenance issues. Amy Dalrymple/Forum News Service

TIOGA, N.D. – North Dakota’s largest natural gas processing plant shut down for maintenance Wednesday afternoon, a move expected to temporarily cause more flaring in the Bakken.

The repairs are needed to solve issues at the Hess Tioga Gas Plant that have caused a noticeable increase in flaring at the plant in recent weeks.

Hess Corp. said Wednesday its Tioga Gas Plant will be offline for maintenance and will cause more flaring near Tioga, Ray, Ross and Keene in northwest North Dakota.

The shutdown is estimated to increase statewide natural gas flaring by 1.4 percent in November, unless the outage lasts longer than expected, the Department of Mineral Resources said Wednesday.

The gas plant has had days with significant flaring this fall, including some days when the flame and black smoke were visible for miles. The repairs underway are expected to reduce the flaring at the plant, Hess spokesman John Roper said in a statement.

Rural Tioga resident Montie Olson said he doesn’t normally pay attention to the occasional flaring at the plant, but this fall it’s been bothering him.

“I am very concerned when I see that flare going like crazy,” said Olson, who is retired from working at the plant. “I’m three miles away and it sounds like it’s in my back yard. It’s gotten to the point where it’s aggravating me.”

Hess told state regulators in an email the plant would begin shutting down about 4 p.m. Wednesday and would remain offline until at least Monday afternoon.

The shutdown will require the plant to flare about 50 million cubic feet per day of natural gas. Another 88 million cubic feet per day of natural gas is estimated to be flared at six compressor stations, according to an email sent to the North Dakota Department of Health, which enforces air quality standards for the facilities.

Hess completed a major upgrade to the Tioga plant in 2014, bringing the total processing capacity to 250 million cubic feet per day.

“It is not unusual with such complex equipment for there to be some minor mechanical tweaks along the way as we work to make the plant as efficient as possible,” Roper said in a statement. “Our expectation is for the maintenance being performed while the plant is offline to resolve the issues the plant has been experiencing in recent weeks, including a reduction in the flaring that you may have noticed.”

The repair work is on the plant’s amine system, which removes hydrogen sulfide from the gas stream that comes from older non-Bakken wells, according to an email from Hess to regulators.

The Tioga plant processed an average of 224 million cubic feet of natural gas per day in September, according to the most recent figures from the Department of Mineral Resources.

The plant vented or flared an average of 8 million cubic feet of natural gas per day in September, the department’s data shows.

Statewide, North Dakota oil and gas operators flared 19 percent of natural gas produced in September, or a total of about 300 million cubic feet per day.

The increase in flaring caused by the plant outage will be calculated into the state’s overall flaring figure for November, but it will not affect individual companies’ gas capture targets, said Alison Ritter, Department of Mineral Resources spokeswoman.

Pipelines now outpacing trucks for gathering Bakken oil

An oil truck travels north of Williston, N.D., on Tuesday, Nov. 17, 2015. Amy Dalrymple/Forum News Service

An oil truck travels north of Williston, N.D., on Tuesday, Nov. 17, 2015. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – More oil is now gathered by pipeline than truck in western North Dakota, taking pressure off Oil Patch communities faced with congestion, traffic fatalities and dust.

New figures from the North Dakota Pipeline Authority show that for the first time in several years, more oil is leaving well sites by pipeline, and that trend is expected to continue, Director Justin Kringstad said.

“We’ve seen some significant progress in the major counties in western North Dakota getting crude off the roadways and into gathering pipeline systems,” Kringstad said.

An estimated 441,644 barrels of oil left well sites by truck each day in April, while 725,743 barrels per day were transported by gathering pipelines to either a transmission pipeline or a rail-loading terminal, Kringstad said, using the most recent figures available.

All counties saw a reduction in oil truck traffic in 2015, with the exception of McKenzie County, which still had an average of 892 oil truckloads each day in April.

“We’ll likely see that turn the corner here in the next year or so,” Kringstad said.

McKenzie County, the state’s busiest oil county, saw significant growth with pipelines between 2012 and this year, but not enough to keep up with the growth in oil production.

“We’re still behind the eight-ball on pipelines,” County Commissioner Ron Anderson said.

McKenzie County, which leads the state in traffic fatalities, has budgeted nearly $25 million this year to maintain gravel roads and bridges heavily traveled by oil traffic.

Kringstad said he expects pipeline growth to continue, further reducing the amount trucked, improving the safety of the roads and reducing complaints from residents about dust. Pipelines also ease operations for oil companies by eliminating the need for trucks during a blizzard or spring load restrictions, he added.

“There’s a lot of advantages that we see in getting these fluids off the roadways and into a pipeline,” Kringstad said.

Williams County, which had an average of 362 oil truckloads per day in April, also saw a significant shift from trucks to gathering pipelines from 2012 to 2015.

Williams County Highway Superintendent Dennis Nelson said while he’s noticed some reduction in truck traffic in the county that includes Williston, it hasn’t slowed down the need for road maintenance.

“The roads have gotten abused in the last few years, terribly, and we only have so many dollars to fix with, so we do what we can and go from there,” Nelson said.

While more oil has shifted to pipelines, the state hasn’t seen a significant decrease in oil truckloads from 2012 to 2015 because of the overall growth in oil production. The state saw an average of 2,007 oil truckloads a day in April, compared with 2,118 oil truckloads a day in 2012.

This year, Dunn County averages 268 oil truckloads per day, followed by Mountrail County with 222 truckloads, according to Kringstad’s figures. The analysis did not include other types of trucks used in oil production, such as trucks that haul water for hydraulic fracturing.

UPDATED: North Dakota oil production dips 2 percent

WILLISTON, N.D. – North Dakota oil production fell 2 percent in September as low oil prices prompted companies to make deeper cuts than regulators expected.

The state produced an average of 1.16 million barrels a day, a drop of more than 25,000 barrels a day since August, according to preliminary figures released Friday by the Department of Mineral Resources.

“That’s sending a definite signal to the market that oil and gas operators are not willing to do a lot of drilling or hydraulic fracturing or produce oil at these low prices,” Director Lynn Helms said.

Helms said he anticipates a continued slowdown that will put pressure on the production level of 1.1 million barrels per day that the state used in its revenue forecast.

“We likely are going to get down to that or very close,” Helms said.

At the end of September, an estimated 1,091 wells had been drilled but were waiting on hydraulic fracturing crews, 98 more than at the end of August. That figure is expected to keep growing as companies wait for oil prices to recover before bringing new wells online.

North Dakota also saw a drop in September in the total number of producing oil and gas wells, from 13,031 to 13,025. The last time the total number of wells dropped that was not due to winter weather was 12 years ago, Helms said.

Oil companies have told Helms they’re limiting oil production as much as possible until prices improve.

“They are restricting production and shutting wells in and producing only as much oil as they need to make the stockholders and bankers happy,” Helms said.

North Dakota natural gas production dropped about 2 percent in September to an average of 1.6 billion cubic feet per day.

Companies flared 19 percent of natural gas in September, down one percentage point from August.

Rail transportation of crude oil increased from 47 percent to 49 percent in September, according to the North Dakota Pipeline Authority.

Director Justin Kringstad said that was in part due to a Twin Cities refinery that went down unexpectedly in September and routine testing on an Enbridge pipeline.

Low oil prices will likely trigger a state tax incentive in December, but its impact to state revenues will be minor and the incentive will expire Dec. 31, Tax Commissioner Ryan Rauschenberger said.

The tax incentive known as the large trigger goes into effect if the price of West Texas Intermediate oil at Cushing, Okla., remains below $55.09 for five consecutive months. The price averaged below that amount for July through October, and so far in November the average has been $45.09.

The impact of the large trigger on state tax revenues could have been significant, but legislators last session removed the incentive for new oil production from Bakken and Three Forks wells, which accounts for 95 percent of the state’s production.

Rauschenberger said only a fraction of the remaining 5 percent will qualify for the incentive before it expires at the end of December. The incentive is targeted for older and lower-producing oil wells.

Helms said he does not expect the incentives to affect production, and his office has not received any applications for the tax exemption.

On Jan. 1, the oil extraction tax will be reduced from 6.5 percent to 5 percent, for an overall taxation rate of 10 percent, under the changes adopted by the Legislature earlier this year.

The tax structure includes a stipulation that the oil extraction tax could go up to 6 percent if the price of WTI is above $90 for three consecutive months. Rauschenberger said that scenario has occurred five times since 2008.

 

Williston oil industry supports efforts to repeal oil export ban

WILLISTON, N.D. – Oil industry leaders in Williston applauded efforts to repeal a ban on crude oil exports Thursday which they say could reverse the recent slowdown in oil activity.

U.S. Sen. John Hoeven, R-N.D., outlined his proposal to lift the 40-year-old ban during the Williston Petroleum Banquet, talking to attendees who have recently been forced to lay off workers and make other cuts in response to low oil prices.

“What our industry needs right now more than anything is to be able to compete on a global market,” Hoeven said.

Hoeven plans to attach the legislation to the new highway bill that Congress is on track to pass, and he expects a vote on the proposal within the next two weeks.

“It is must-pass legislation, which means it will be hard for the president to veto, and the benefits of allowing crude oil exports are multiple,” Hoeven said.

Mark Gjovig, chief financial officer for GO Wireline, a North Dakota-owned oilfield service company, said allowing the oil industry to compete globally would benefit the whole state.

“I think it will create jobs not only for the oil and gas sector, but it will create jobs across North Dakota,” Gjovig said.

Ron Ness, president of the North Dakota Petroleum Council, said lifting the ban makes sense for the economy and energy security and would be a “tremendous help” in the Bakken.

“It’s a significant confidence boost, not only to the Bakken, but really to the domestic oil industry,” Ness said.

Lynn Helms, North Dakota’s top oil regulator, has said lifting the ban could reverse what’s expected to be a gradual decline in the state’s oil production through June 2017.

“We think it has the potential to lift North Dakota crude prices by $10 to $12 a barrel,” Helms, director of the Department of Mineral Resources, told reporters last month. “That’s a substantial change.”

Hoeven said he thinks attaching the repeal to the crude oil export ban to the highway bill makes sense because the highway bill is funded by taking money out of the Strategic Petroleum Reserve.

“Let’s make darn sure we have a very robust oil and gas industry so we’re not dependent on the Middle East or anyone else,” Hoeven told members of the Williston Basin chapter of the American Petroleum Institute.

But an effort to add a similar amendment to the highway bill failed in the House earlier this month, and even Hoeven acknowledges his plan has a 50-50 chance of success.

“That’s not an easy parliamentary thing to pull off, however it’s not impossible, either,” Rep. Kevin Cramer, R-N.D., said of Hoeven’s proposal. “I wish him all the best.”

If this effort doesn’t move forward, all three members of North Dakota’s Congressional delegation said Thursday they have other avenues they’re pursuing.

Sen. Heidi Heitkamp, D-N.D., has been working with Sen. Lisa Murkowski, R-Alaska, to build bipartisan support for their legislation that would lift the ban on crude oil exports.

“We recently started negotiations with a group of Republicans and Democrats to try to reach a compromise to pass our bipartisan legislation that would lift the oil export ban while pairing it with support for renewables, conservation, and energy efficiency,” Heitkamp said.

Cramer said he’s also working to prepare oil export amendments to attach to other pieces of legislation in the House.

 

Williston city commissioners vote to shut down crew camps

 

Travis Kelley, regional vice president for Target Logistics, speaks Tuesday, Nov. 10, 2015, in Williston, N.D., during a City Commission public hearing on closing crew camps. Amy Dalrymple/Forum News Service

Travis Kelley, regional vice president for Target Logistics, speaks Tuesday, Nov. 10, 2015, in Williston, N.D., during a City Commission public hearing on closing crew camps. Amy Dalrymple/Forum News Service

WILLISTON, N.D. – Williston city commissioners voted 3-2 Tuesday to close crew camps next year, prompting oil industry representatives to warn that their workforce may leave without temporary housing.

The City Commission approved the first reading of an ordinance that would require camps to stop operating on July 1 and require the buildings to be removed by Sept. 1.

The ordinance affects 3,600 temporary workforce housing beds in city limits and the city’s one-mile extraterritorial area, although occupancy of those camps has declined with the downturn in oil prices.

Commissioners Tate Cymbaluk, Chris Brosteun and Mayor Howard Klug voted yes after listening to an hour of public comment. Commissioners Deanette Piesik and Brad Bekkedahl opposed the motion. The ordinance will require a second reading.

Oil company representatives who spoke during the hearing cautioned about the impact of closing the camps at a time when low oil prices have prompted layoffs and other cuts for workers.

Rather than move from a crew camp to an apartment or hotel, workers will likely leave Williston for a place that’s more stable, said Orlando Romero, director of real estate for Nabors Drilling.

“For us, it could be detrimental to our workforce to close the camps,” Romero said.

But apartment developers warned commissioners about the consequences to long-term investments if crew camps continue to operate.

John Sessions, who helped develop Eagle Crest apartments in Williston, said the project was financed in 2013 when rent for a two-bedroom, two-bath apartment was $2,700 per month.

The average rent for that apartment is now $1,404, Sessions said, using information gathered by an apartment management group formed in Williston that represents most buildings constructed in the past five years.

At those rates, it requires almost full occupancy to pay off the debt and cover operating expenses, Sessions said, adding that the financing is over 23 years.

But on average, recently constructed Williston apartment buildings are 60 percent full, Sessions said.

“This is not what the investment community expected,” Sessions said. “In time, fragile ownerships will get tired of this relationship. You might see fire sales of projects. Maintenance will suffer.”

Similarly, Williston hotels have averaged about 55 percent occupancy this year, according to the Williston Convention and Visitors Bureau.

Terry Metzler with Granite Peak Development said investors had the confidence to support long-term developments because they understood Williston’s intent was that crew camps would go away when permanent development caught up.

Metzler pointed out that crew camps will no longer pay taxes in the community after they leave.

“The rest of us will,” Metzler said.

Sandy Haviland, representing Confluence Apartments in Williston, said the complex is a multi-decade investment for Williston.

“The major difference between permanent housing and the camps is the number of investors and the amount of dollars that you have to line up on behalf of the town’s long-term future,” Haviland said.

John Brown with C&J Energy Services said hotels and apartments have not done a good job of competing to house employees because rates are too high.

“We had to do this for affordable housing for our employees to take care of the work,” said Brown, representing a 450-bed camp he said is less than 50 percent full.

Brent Eslinger, senior district manager for Halliburton, said the company was one of the few that invested in permanent housing in Williston, constructing 50 homes, 48 townhomes and two apartment complexes. Halliburton also relies on temporary housing for crews that come and go, Eslinger said.

“We don’t know where they’re going to be from week to week,” Eslinger said. “It changes that dramatically.”

Eslinger and others at the meeting asked for the city to allow more time for crew camps.

Travis Kelley, regional vice president for Target Logistics, the largest workforce housing provider in the Bakken, suggested the city raise the standards for crew camps, which would likely prompt some camps to close. Kelley has said the Target Logistics camps are 70 percent full north of Williston.

Commissioners had little discussion about the ordinance on Tuesday. Mayor Klug, who has previously said he doesn’t want Williston to be a “temporary town,” pointed out during Tuesday’s meeting that there are crew camps in Williams County that continue to operate.

The ordinance allows an exemption for six camps that had permits from Williams County that expire after Dec. 31. Those would be allowed to operate until their permits expire.

Farmers getting help with pipeline problems

Dustin Johnsrud stands in a hole on his property north of Epping, N.D., in Williams County in July 2015 that developed after a pipeline was installed in the field. Dustin and his father, Dennis, have used a Department of Agriculture program to resolve issues related to pipeline reclamation. PHOTO SUBMITTED BY DENNIS JOHNSRUD

Dustin Johnsrud stands in a hole on his property north of Epping, N.D., in Williams County that developed after a pipeline was installed in the field. Dustin and his father, Dennis, have used a Department of Agriculture program to resolve issues related to pipeline reclamation. Photo submitted by Dennis Johnsrud

TIOGA, N.D. – It’s taken as long as 2½ years for western North Dakota farmer Dennis Johnsrud to resolve one issue with a pipeline company.

But now Johnsrud is seeing results a lot quicker after using a new Department of Agriculture program aimed at settling disputes between landowners and companies.

“It gives you a voice,” said Johnsrud, who lives north of Epping in Williams County. “We’re getting run over here in western North Dakota.”

The Department of Agriculture hosted public hearings in Tioga and Watford City on Monday to discuss its pipeline reclamation and restoration pilot program established by the Legislature earlier this year.

The program connects landowners and tenants with an independent ombudsman who helps resolve concerns with companies related to restoring the land.

“They won’t ignore the ombudsman,” Johnsrud said. “They can ignore us and get away with it.”

The department has received 22 complaints so far, with the top complaints related to uneven ground, loss of topsoil, vegetation that was not restored properly and noxious weed control, said Agriculture Commissioner Doug Goehring.

“We’re just going to help establish some communication and a reasonable approach to what’s going on,” Goehring said. “This is about taking some of that emotion out of it, letting us be the third party.”

Landowners who attended the hearing in Tioga complained about how long it takes to get results when pipeline companies shift blame to a subcontractor or another operator.

“You can pass the buck all the time, meanwhile I’m not getting anything done,” said Tioga farmer Tim Sundhagen, who said he’s lost time in the field while talking to up to 12 people on one issue.

Landowner Rose Person said pipeline company staff turnover is high and it would save landowners time if they updated landowners once a year with the right contact person.

The ombudsman program aims to help landowners find the responsible party, Goehring said.

“If we start getting the runaround, we’re going to do some digging,” Goehring said.

Johnsrud said his one complaint to the Department of Agriculture involved about 15 separate issues, including a hole 8 feet deep his son, Dustin, discovered this spring while working in the field.

The company installed the pipeline during the winter and pushed frozen soil chunks into the trench, Johnsrud said. But the chunks of frozen dirt were mostly ice and when that melted, it caused a hole, he said.

Others also voiced concerns about winter construction of pipelines, particularly the loss of topsoil when the ground is too frozen to separate it from the subsoil.

Goehring said he now recommends that companies planning winter pipeline construction separate the topsoil in the fall and come back in the spring and replace it, preventing a lot of issues down the road.

“That would help tremendously,” Goehring said.

Nearly a dozen representatives from pipeline companies and oil companies attended the Tioga hearing and offered to talk to attendees individually about their concerns. Another 85 people attended a similar meeting in Watford City.

The program assists landowners with issues related to non-transmission pipelines installed after Jan. 1, 2006.

North Dakota has an estimated 20,000 miles of underground gathering pipelines. Goehring said the state is projected to have 36,000 miles of pipelines by 2020.

“We recognize that there is an element out there of frustration and fatigue, just based on the fact that a lot of you have dealt with pipelines for a long period of time,” Goehring said.