Wednesday, January 16, 2013

Why we need a balanced approach... part 2 (Good Cop, Bad Cop)

Greetings again from the epicenter of the Bakken Oil Formation.

I'm gonna cut to the chase.  I am not a statistician but I'm going to throw some numbers your way and see what we can make of them.  Before doing that however, we need just a quick, very basic history lesson.

North Dakota has now experienced three oil booms with McKenzie County being in the thick of each of them.  The first was 'the discovery' in the 1950's.  For McKenzie County, it was the eastern part of the county between Keene and Mandaree.  The second, which I actually do remember as a young child was that of the 70's and 80's.  Again, I was young but I remember hearing rumblings of the state's extraction tax (it is the highest of any state in the nation) coupled with OPEC flooding the market that caused the over-night 'pack up' of the industry from the Williston Basin (the always geologically rich part of western North Dakota and eastern Montana) in the early 80's.  This also happened to be a time of rapid inflation on a national level, record high interest rates and what looked to be the beginning of the end for rural (which is truly all of it) North Dakota.  There were many farm foreclosures, the youth of North Dakota were mass exiting to metropolitan areas of the country and talk of 'Buffalo Commons' were irritating those thrifty, resourceful natives of the state that were committed to holding things together.

My point to the history lesson... as soon as minerals were recognized as valuable back in the 50's, families started retaining them when they would sell off their North Dakota farm and range land.  Yep, in North Dakota you may own surface land, but that does not mean that you hold the ownership to the minerals under your surface.  In fact, a loose statistic that has been heard numerous times in the last several years is that 70% of all mineral rights in McKenzie County are owned by 'out of  state' residents.  So here com thee numbers:

There are 2.76 MILLION acres of land in McKenzie County.  What that means is that there are also 2.76 MILLION MINERAL acres in McKenzie County.  Of those 2.76 MILLION MINERAL acres in McKenzie County, 1.93 million are owned by non-residents of North Dakota.  The remaining 828,000 MINERAL acres (notice that the word 'MILLION' is gone) who are held by either the state of North Dakota (the great state owns approximately 76,800 MINERAL ACRES in McKenzie County) or citizens of North Dakota are still substantial, but the numbers don't lie.  The majority of the minerals under McKenzie County are owned by individuals NOT LIVING ON THE FRONT LINE.

I'm not complaining, but I will tell you this story and ask you to put yourself in these shoes.  October, 2008 we had just moved into our new house on the ranch.  This was a lifelong dream of mine to the point where as a 17 year old FFA student at WCHS, I drafted landscape designs for this house on this location on the ranch where I grew up.  I was in the office working, had a knock on the door.  When I answered it two men stood at the door.  We will refer to them as Good Land man and Bad Land man.  Keep in mind at this time we had all heard of the Bakken, but things were relatively quiet and honestly, we were  'living the dream'.

Bad land man takes the lead and says to me, "I just got done telling your Momma she's gonna be rich.  She's finally gonna get her oil well."

My response was "O.K.  So if she's getting an oil well why are you here talking to me?"

Bad cop, I mean land man, "Because we are going to put it right to the south of..." as I escort them into the house (and into our specifically designed family room with large windows on a 15 foot high wall that expand into the prettiest painted butte and native grass valley that one could ever imagine).  He pauses, comments on the beautiful view and finished his sentence with a change up... "it will be right about there."  He is pointing out my family room window to a flat on our land, just prior to the start of federal land.

So step back a moment and let me set the lay of the land.  We have a section of private land surrounded by USDA-Forest Service land.  It is the only private land for miles in every direction and the reason this land didn't go back to the federal government during the great depression days is because of a very good, very high volume, very high quality fresh water spring.  Our house sits roughly 2,000 feet off the south property line between our private and Forest Service land with the ranches water source just south of our house.  Bad cop was sitting there explaining to me all the reasons why I should be happy for my mother and all that was running through my head was:

  • We are going to have the equivalent of a fire breathing dragon within 500 feet of our house.
  • This fire breathing dragon comes with chemicals that I don't know or understand, it stinks and it is noisy.
  • This fire breathing dragon comes with thousands of semi-trucks hauling supplies in and product out 24/7/365.
  • This fire breathing dragon is over 100 feet tall and packed full of flood lights (to be able to work full pace day and night).
  • This fire breathing dragon (from being drilled, fracted, collected, serviced) will have thousands and thousands of people / workers in and out of its site and I will know a couple of them... the rest, I will not know where they are from, what they do in their spare time, if they will notice and / or respect this place and space or my family.  These people (us) who just wanted to work their family's land at the end of the road, who would rather brave those windy, narrow, snow drifted roads every day THAN have people watching them are going to have STRANGERS watching them up close and personal.
  • Our water, they will destroy our only source of water.  Any change in pressure can divert springs and placing the fire breathing dragon there, surely will not be good for the sustainability of our only water source... 
Bad cop broke in again... "And we are willing to pay you $5,000.00, top dollar, for the surface lease of your land."  My response was, "Per year I assume?".  He laughed and fired back "Oh no.  That is a one time payment and annual damages are not required by the state (of North Dakota)".

So for the ease of the rest of the story, I told him that if he would leave his card, we would consult with our attorney and be in contact with him.  The summary of his feed back to me was that the ONLY protection the state of North Dakota offered surface owners is a 400 foot set back from places of residence (from the fire breathing dragon).  And after contacting our attorney, sadly that was true.  The other thing he dished out was that as surface owners, we could not refuse them access to the minerals  they had leased under our surface.

Luckily, I never saw bad cop again.  The same company that sent him out transferred our file to good cop.  Overall the company that holds the lease under the ranch (of which my parents own a portion of those leased mineral and negotiated other siting protections into their mineral lease for us) has been very good to work with thus far.  They realized that for us it wasn't about the surface damage payments (we value our land for more than just the dollars it can generate and although we were willing to put a value on those damages, they could do much better dealing with USDA-Forest Service).  They sited their future 'eco-pad' about 3/4 of a mile north of the ranch prior to start of our private land.  If the company holds true to their verbal commitments, they will be able to extract all of their 1280 acre spacing minerals under and around the ranch from that location.

We feel very thankful that unlike so many other people in McKenzie County who own surface land with no say in the mineral leases, we were able to write additional protections in to my parents lease.  We are also thankful that we have a NOW good working relationship with the production company who has the minerals under and around the ranch leased.  We are fortunate and for that, I am willing to point out that the state of North Dakota does virtually NOTHING to protect those that HAVE NO SAY in this whole process.  I CAN DO THIS and I think you can trust me to be fair as I AM NOT A VICTUM.  I am a VERY FORTUNATE BY-STANDER that will say I truly do have a LOVE / HATE relationship with oil development in western North Dakota.

Put yourself in these shoes and give those acreage statistics and this Good cop / Bad cop story a little thought.  Thanks for sticking with me to the end!

I first thought this was the sunrise on Monday morning.  Shortly after snapping this, it disappeared.  Pretty sure it was a flare, not the sunrise!  God made vs. Man made, but otherwise some similarities there.



2 comments:

  1. Vawnita - every time I read your blogs, I am truly amazed at your gift for writing and description - making things 'easy to understand' for those people who may not have the background, and yet make very clear and valid points. Love reading your blog!
    :)
    N

    ReplyDelete
  2. Nancy, thank you. You are my most loyal reader and active participant in an effort to bring 'voice' to rural America and the unique issues of western North Dakota. Thanks again. V

    ReplyDelete