North Dakota Reacts to Drilling Critics

Attempts to Drill Wells Near Historic Sites Sparked Protests

Written by:

Chester Dawson

Senior Correspondent

The Wall Street Journal


North Dakotans have strongly backed oil drilling in their state, but attempts to drill wells near historic sites—including a ranch once used by Teddy Roosevelt—have sparked enough of an outcry that regulators are considering greater citizen input into how and where companies may operate.

Last week, North Dakota’s Industrial Commission, which regulates the oil industry, highlighted 18 areas for possible protection because of their cultural, recreational, scenic or spiritual significance. Within a buffer zone, drilling wouldn’t be banned but be subjected to heightened public and possibly regulatory scrutiny.

On Wednesday, a panel studying the issue is set to recommend policies on how to give the public more voice in where drilling is allowed, among other issues.

The furor over historical sites was sparked in January 2013 when the Industrial Commission dismissed objections from nearby landowners and Native Americans and approved Hess Corp.’s application to drill wells near the Killdeer Mountains. The wells would be close to the site of a Civil War-era battle involving the U.S. Army and Native Americans and an area considered sacred by local tribes.

The controversy deepened last spring when Exxon Mobil Corp.-owned XTO Energy Inc. planned to drill wells several hundred feet from the Elkhorn Ranch, once used by President Roosevelt, on the Little Missouri River. Amid protests, the company revised its plan to drill two miles away.

“There has never been a place for public comment at the permit stage,” said Alison Ritter, a spokeswoman for the North Dakota Department of Mineral Resources, which implements regulatory policy. Allowing comment “brings those areas of concern more to the forefront.”

State Attorney General Wayne Stenehjem, one of three board members of the Industrial Commission, proposed the buffer zones and requirements for mitigation measures by the oil industry in the zones. The board resisted the move to revise the state code to make impact-mitigation mandatory, instead opting to create the working group to come up with recommendations for administrative policies to better protect sensitive areas.

Mr. Stenehjem said he supports the modification of his proposal, adding that most North Dakotans remain in favor of responsible development. “We are very supportive, but we also want to make sure we’re doing what we need to do to protect our spectacular places,” he said.

The more-flexible approach was a partial victory for oil producers, who question the need for new regulation. Even so, some environmental groups are lauding the effort.

“The attorney general is the first high-ranking elected official in North Dakota to step forward and say there are some areas that deserve protection, so this is huge,” said Jan Swenson, executive director of the Badlands Conservation Alliance. “Directionally, it is a big change.”

The debate has tapped into unease among some North Dakotans over the proliferation of rigs, new rural access roads for drilling equipment and mile-long trains composed solely of oil-carrying railcars. They are byproducts of tapping oil in the Bakken formation through hydraulic fracturing, a process that has transformed the state into the No. 2 crude producer after Texas.

A surge in oil-related construction and investment has brought wealth and jobs to North Dakota, which suffered from a stagnant economy and high unemployment for decades. State coffers are flush from the tax dollars the oil generates.

But problems from the rapid growth, ranging from insufficient infrastructure to laws that critics say leave the state exposed to untrammeled development, are taking a toll, said Scott Skokos, senior field organizer with the Dakota Resource Council, an environmental group.

He pointed to two recent oil-related accidents in North Dakota: a 20,600-barrel spill from a pipeline under a wheat field in late September near Tioga and a fiery derailment of an oil train in December outside Casselton.

“There’s definitely some fallout from the development,” Mr. Skokos said.

Oil-industry representatives caution against attempts to rein in growth. More regulation may clog up the wellspring of the state’s newfound prosperity, said Ron Ness, president of the North Dakota Petroleum Council, an industry trade group. “Economic development doesn’t come neatly wrapped in a box tied with a bow,” Mr. Ness said.

The chairman of North Dakota’s Republican Party in the GOP-dominated state, Robert Harms, earlier this month called for a moderation in the development of the state’s oil resources after the train explosion. Mr. Harms, who was unavailable for comment, later attempted to distance himself from those remarks, which had upset other party members and oil-industry executives, by saying he made them in a personal capacity.