I have left the work of our ranching business completely and totally in the capable and talented hands of Pete and Brad (nearly a year ago now) to work on 'things of community'. The communities that are facing an uphill battle for future sustainability are McKenzie County (and it's neighboring 'Bakken' counties), and stewards of the surface of the Bakken (farmers and ranchers). I will try to stay 'off soapbox' and on message, but it is very difficult.
Tomorrow will be legislative day 20. Last week brought numerous bills relating to oil and gas, the environment, surface owners and their rights (which is minimal and under attack), mineral owners and their rights, gross production tax redistribution formulas and much, much more.
The highlight of the week was the fast track passage of the 'Surge Bill' by the Senate, who sent it over to the House of Representatives a day after the revised revenue projections were decreased by 4 billion dollars. An important thing to remember is that the funding for the Surge Bill already sits safe and sound in one of many 'rainy day' funds at the state level, the SIIF (Strategic Investment and Improvement Fund).
There were a handful of disappointments and thus the reason for this post.
The word on the 'ND hill' is that western North Dakota will not see both the passage of the Surge Bill AND the 60:40 Gross Production Tax redistribution formula bill. During the last legislative session, through a very complex funding formula, a 25/75 split was determined. But wait. When the 25:75 split of the 80% of the 5% Gross Production Tax (the state automatically keeps the first 20% and then goes back and keeps 75% of the next 80%) was divided up between Hub cities (Minot, Dickinson, Williston), schools, counties and communities, McKenzie County received 6.8% of the Gross Production Tax it generated in revenue to the state. Each and every person who either lives out here or spends time out here understands that that level of funding does not come close to meeting the INDUSTRIAL impact happening out here.
The promise was that this session western North Dakota would be taken care of as the higher than expected prices and production overflowed the the +/-13 'rainy day funds' to the point they were all spilling into the Legacy Fund at a rate of 30% of all oil and gas tax revenues going there and parking (not accruing interest, just sitting in a mattress). Meanwhile, now, in 2015, the Governor's office suggested that Counties and Cities should borrow against their future GPT income. Unbelievable. I tell you this because when asked five different times last Thursday and Friday, "since you're not getting both, what would you rather have (60:40 or Surge)?" My response is "With all do respect, we need BOTH. Possibly tax relief (which happens to be nearly the same amount as the projected budget shortfall with the new revenue forecast) may need to wait until next session."
Please take action on this and start writing letters to the editor as well as writing members of the Legislature.
Another very disappointing outcome of last week, it was suggested that to achieve gas capture goals, energy companies needed the tool of 'quick take'. That is the soft term for EMINENT DOMAIN. I testified on Friday that until there are:
DESIGN STANDARDS with verification, CONSTRUCTION STANDARDS with verification, CONTINUOUS MONITORING with verification, BONDING, and meaningful enforcement options, surface owners will not trust the right of way process. I am of the opinion that the NDIC should NOT have permitted wells that didn't already have their natural gas pipeline right of ways secured and installed once the success rate of Bakken wells had been established. We all know that that never happened. Now, the Department of Mineral Resources, Oil and Gas Division is facing either (A) exemptions for flaring or (B) the need or eminent domain (AND HEAR THIS, THE TALK HASN'T BEEN FOR NATURAL GAS PIPELINES ALONE) for right of ways (including SALT WATER / PRODUCTION WATER). I would suggestion no exemptions and reductions in production until gas can be captured. I personally will trust the process for NATURAL GAS INFRASTRUCTURE as soon as there are REAL STANDARDS (REGULATIONS) and REAL VERIFICATION (INSPECTION) and ENFORCEMENT. The problem is that there is NO TRUST, especially with the regulatory agencies tasked with overseeing collection lines and spill prevention in North Dakota.
SO, if you don't want EMINENT DOMAIN pushed on you and your land to open it up to spills, trespassing, poor reclamation, and liability to you in the future, you better get on the horn, put pen to paper, or email the Senate Energy and Natural Resources Committee members regarding SB 2287, which was heard last Friday (January 30th):
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