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2021 Legislation F.A.Q

  • What does SB 2065 do, and why does the oil and gas industry want it?
    SB 2065 creates a regulatory and permitting system for underground gas storage. Although the Industrial Commission currently has authority to permit gas storage facilities, it also wanted the ability to force owners of the surface estate to allow storage on and in their property, even if they did not want to allow it themselves. This is referred to in the law as “amalgamation” because the goal of the Industrial Commission is to force all of the owners of pore space to allow a project to use the pore space.
  • What are the concerns for a landowner?

    The bill currently will have the amount of “equitable” compensation owed to the
    surface estate owner for use of the pore space determined by the Industrial
    Commission. The Industrial Commission promoted prior efforts to take away the
    landowners’ rights to compensation for use of their pore space, and Lynn Helms,
    speaking on its behalf, testified in favor of SB 2344 and stated that no gas storage
    project will be “economic” if landowners are compensated for use of their pore
    space. Now these same individuals want to be the ones to determine the amount
    of compensation received. For that reason, NWLA asked for an “escape valve” in
    order to allow a landowner to go to court and have a jury decide the amount of
    compensation. We proposed that this would happen after the Industrial
    Commission makes its decision. In this way, if the Industrial Commission is
    genuine about its desire to fairly compensate landowners, then it will likely be a
    nonissue anyway. Legislators on the subcommittee refused to consider this,
    however, and voted through legislation without any right to an independent
    assessment of compensation. The other related concern is that “equitable
    compensation” is the term used to describe what a landowner must receive, but it
    is intentionally undefined and the Industrial Commission, Petroleum Council, and
    lawmakers refused to add a definition to this term. NWLA proposed to define it
    as being, at a minimum, “just” compensation, which is the compensation required
    by the Constitution for a taking of property. NWLA also asked to include
    damages as allowed by the Surface Damages Act, which is the law passed by the
    Legislative Assembly to require compensation to surface estate owners for oil and
    gas development, and was therefore designed specifically for this situation.
    NWLA submitted a proposal that was thoroughly researched, and was modeled
    after legislation in over a dozen other states that have legal frameworks for doing
    gas storage. Despite the fact that these other states are already doing this with
    laws on the books, our Legislative Assembly chose to ignore what over a dozen
    other states have already done and break new ground of its own with the laws it is
    drafting.

  • Why does NWLA say that SB 2065 is unconstitutional?

    SB 2065 allows the Industrial Commission to force nonconsenting landowners to
    permit their property to become part of an underground storage facility. The law
    has moved in the right direction since SB 2344 in 2019 because now the Industrial
    Commission recognizes that compensation must be paid when private property is
    taken. Unfortunately, the law only states that “equitable” compensation must be
    paid, and that term is undefined. The state and federal constitutions require that
    “just compensation” be paid when private property is taken by the government,
    but the use of the term “equitable compensation” is a transparent attempt to
    sidestep this issue. Courts require “just” compensation to be paid for a taking of
    private property, and there is over a century of case decisions explaining what that
    is. Lawmakers refused to include “just” compensation in the definition of
    “equitable” compensation, which further indicates that what the Industrial
    Commission will determine is “equitable” compensation will be far less than is
    required for “just” compensation.

    In addition to the failure to require “just” compensation, the law also does not
    allow a landowner to have a jury decide the amount of just compensation. Under
    the North Dakota Constitution, “Compensation shall be ascertained by a jury,
    unless a jury be waived.” N.D. Const. art. I, § 16. Landowners have a
    constitutional right to have their compensation determined by a jury rather than by
    the Industrial Commission.

  • What is the argument that SB 2065 is constitutional?

    There is not one as far as we know, or at least not one that has been discussed
    openly. This is significant because in 2019 when the Legislative Assembly
    passed SB 2344, attorneys for the State and the Petroleum Council argued that the
    law was not at all unconstitutional. A court in North Dakota has since disagreed,
    but the important point is that there were arguments that the legislation was
    constitutional and should therefore be passed. Rep. George Keiser, who chaired
    the SB 2065 subcommittee, indicated that the subcommittee was advised that all
    versions under consideration may be unconstitutional. During the subcommittee
    meetings, an attorney from North Dakota Legislative Council was asked to sit in,
    and he repeatedly advised the subcommittee that NWLA’s concerns were
    well-founded and that the legislation was indeed unconstitutional.

  • How can legislators vote for legislation that is unconstitutional?

    Legislators take the same oath of office as lawyers, judges, and other elected
    officials. The main part of that oath is: “I do solemnly swear (or affirm as the
    case may be) that I will support the Constitution of the United States and the
    Constitution of the State of North Dakota.” N.D. Const. art. XI, § 4. Legislators
    were told by their own attorneys that SB 2065 is unconstitutional, and voted for it
    anyway. This violates their oath of office. It is not a case where the legislators
    can say they did not know it was unconstitutional because their attorney told them
    in an open meeting it was not, and they admitted it themselves on record.

  • I heard that the Industrial Commission will allow private contracts rather than setting a price, is that true?

    In order to force landowners into a storage facility, the applicant must get at least
    60% of the landowners to sign on willingly. In this way, there will be some
    “buy-in” from landowners before other landowners are forced into the storage
    unit against their will. In this way, it is true there will be some landowners who
    have already agreed on a price. But whether that is a fair price or is sufficient to
    be “just” compensation is another question, and for many of these facilities, the
    industry has said they will be purchasing the surface and a large amount of the
    pore space they will use, so it may be that the “prices already paid” to landowners
    are prices paid by a company to its own affiliate company and as such they will
    not reflect “just compensation” or market value in any way.

  • None of these projects will happen if landowners demand just compensation, so shouldn’t we allow this to happen?

    First, there is no indication that none of these projects will move forward. During
    the meetings on SB 2065, there was only one project developer present who
    indicated it had actual plans to move ahead, and the developer’s lobbyist stated in
    the meeting that the provisions proposed by NWLA would not be a barrier to that
    project. Whether paying adequate “just” compensation will stop other projects is
    yet to be seen, but it is not even within NWLA’s power to negotiate away
    constitutional rights. NWLA simply sat at the table and alerted the legislators that
    what they were doing was unconstitutional and offered constructive ways to
    address these shortcomings.

    Landowners should also understand that the first project to come through is not
    always the best project. In the early days of oil in North Dakota, many mineral
    owners sold off their minerals entirely preferring to take some quick money.
    Wildcatters might come in and leave behind a few half-drilled holes, but these are
    not the kinds of development that North Dakota landowners are generally
    interested in. If a company is serious and has real experience and actual plans for
    a project, then paying a landowner the constitutionally required minimum
    compensation should not stop the project from moving forward. And if it does,
    perhaps that project was overly risky to begin with.

    The argument from the Industrial Commission and legislators can be summed up
    with an analogy. Imagine you are a landowner and you own a large home next to
    a hotel. The hotel goes to the government and says that it needs a few extra
    rooms, but if it has to pay for them itself it will not make any money renting them
    out, so it asks the government to allow it to use the rooms in your house without
    having to pay compensation to you for that, even though it is going to make
    money using your property. The hotel goes to the government, and the
    government passes a law saying that the hotel can use your property and you
    cannot receive or even ask for compensation. The government passed that law,
    and it was SB 2344. Now the courts have said that is unconstitutional. So the
    lawmakers are now working on a new law, and the main organization charged
    with “promoting” the hotel industry is now the one who will decide how much
    compensation you receive when the government authorizes the hotel to use your
    property for its business over your objection. You might be faced with an
    argument from the hotel that you were not using the rooms anyway – the rooms
    have been sitting vacant for years, so there’s no actual damage to you if the hotel
    puts them to use.

    NWLA, and landowners in North Dakota in general, support gas storage projects
    the same as they support energy development in general. The goal never has been
    and never will be to stop development. But if development can only move
    forward by rolling over the constitutional rights of private property owners, then
    we must all stand up for our constitution and the freedoms and private property
    rights it protects from government overreach.

  • But if a small minority of landowners object, doesn’t that take property from the other owners?

    No. If a project requires pore space from ten landowners to meet the project’s
    needs, and only nine landowners consent to it, the “holdout” landowner is not
    forcing a taking by eminent domain. He is simply refusing to participate, and the
    reasons may be compensation, or something else entirely. He is not, however,
    telling those other nine landowners what they can or cannot do on their property.
    If the potential operator of the storage facility says it cannot make the project
    feasible or economic with just nine landowners and it cannot find any other
    neighbors to participate, this is simply the power of choice and capitalist markets
    at work. It is true that one landowners’ decision could result in neighbors missing
    out on a project, but not because he is condemning their land. Most important, he
    is not telling other landowners what they can or cannot do with their land – he is
    telling them what they can or cannot do with his land. That is the difference
    between these scenarios and a true eminent domain situation – in eminent domain,
    you are telling the landowner that he must allow others to use his land for storage.

  • Why has pore space become such an important issue?

    In recent years, new technologies and methods for oil and gas production have led
    to oil and gas booms around the country. Some of the technologies and methods
    for developing these oil and gas plays have not been used before in any
    commercial setting. New technologies are also being applied in old oil fields.
    Use of CO2 for enhanced oil recovery operations, for example, has proven to be a
    successful way to further extend the life of aged oilfields. There are significant
    tax credits associated with sequestration of CO2 both on a permanent basis, and as
    is done in enhanced oil recovery. The value of pore space has become apparent,
    as has the recognition that it is an interest that is part of the surface estate. As the
    value of the pore space for use in these new technologies and methods has
    become apparent, oil and gas developers have attempted to persuade lawmakers to
    pass laws that remove the rights landowners have to compensation for use of their
    property. The first attempt was made in 2019 with SB 2344, formerly referred to
    as “the pore space bill.” That law was struck down by North Dakota court. Now,
    SB 2065 attempts to do something similar, but in a more indirect manner. Rather
    than simply taking away any rights to control use or possession of the property
    any any rights to compensation, SB 2065 will allow the North Dakota agency
    required by law “to promote the development, production, and utilization of
    natural resources of oil and gas in the state” to decide how much compensation a
    landowner receives if he objects to a project (which is still going to move forward
    over his objection).

  • Doesn’t the state have a right to regulate the storage of gas though? Doesn’t the state need to have some kind of law about permitting?

    Whether North Dakota needs regulation of natural gas storage is a policy question
    that is appropriately addressed to the North Dakota Legislative Assembly. The
    Northwest Landowners Association is there to advocate for the landowners of the
    state. But this policy question is a separate issue from the constitutionality of SB
    2065. There is always a constitutional path to do what you want to do; unless
    what you want to do is unconstitutional. If the state of North Dakota needs a way
    to permit gas storage facilities, that is possible and NWLA worked very hard to
    propose solutions. If the state of North Dakota is attempting to take the private
    property rights of landowners without paying just compensation as required by
    the constitution, then it is not a matter for negotiation. NWLA stands for the
    constitution, because that constitution is its last line of defense against attacks on
    private property rights.


2019 Legislative Update

Call your legislators and ask them to pass SB 2259

Finance And Taxation Committee Members

District 34
Senator Dwight Cook

District 26
Senator Jim Dotzerod

District 39
Senator Dale Patten

 

 

Do you have additional questions?

Call our board members active at the Capitol:

Troy Coons, Chairman: 701.721.4258

Dave King, Vice Chairman: 701.848.6032

Amy Shelton, ED: 701.721.4446

District 4
Senator Jordan Kannianen

District 18
Senator Scott Meyer

District 33
Senator Jessica Unruh


Legislative Bill Tracking – Sixty-sixth Assembly (2019) – Bill Tracking List


This week at the Capitol: Jan 7-11

  • Bills on Wind Liens, Eminent Domain, Reclamation Bonds, Landlord / Tenant, Market Value Cap, and Baseline Testing are the main topics NWLA is lobbying for in the 2019 Session.

Legislative Leaders

  • In the 66th Legislative Assembly, there are 79 republicans and 15 Democrats in the House of Representatives and 37 Republicans and 10 Democrats in the Senate. Republican and Democratic House and Senate members have selected the following leaders for the 2019 Legislative Session: House and Senate.

2019 Agriculture Committees:

  • Senate Ag Committee Members Larry Luick (R) – Chairman Janne Myrdal (R) – Vice Chairman Jerry Klein (R) Oley Larsen (R) Arne Osland (R) Kathy Hogan (D) House Agriculture Committee Members Dennis Johnson (R) – Chairman Wayne A. Trottier (R) – Vice Chairman Jake G. Blum (R) Ruth Buffalo (D) Gretchen Dobervich (D) Jay Fisher (R) Craig Headland (R) Dwight Kiefert (R) Aaron McWilliams (R) David Richter (R) Bernie Satrom (R) Cynthia Schreiber-Beck (R) Kathy Skroch (R) Bill Tveit (R)

Contacting Your Legislators

  • During a legislative session, a legislator can be reached at the State Capitol by leaving a message with the legislative telephone message center at (888) NDLEGIS (635-3447) or (701) 328-3373 (local). That number can also be used to obtain information on bills under consideration. A legislator can also be reached by mail or email and address rosters are posted at http://www.legis.nd.gov/contact-my-legislators.

 

LEGISLATIVE DEADLINES AND EVENTS

  • Jan. 14 – Deadline for representatives to introduce bills
  • Jan. 21 – Deadline for senators to introduce bills
  • Feb. 22 – Crossover for bills
  • Feb. 25-26 – Recess
  • March 6 – Crossover for resolutions
  • April 19 – Good Friday
  • April 30 – Session is limited to 80 legislative days
  • Detailed information on legislative activities is available on the Legislative Assembly website.
NWLA 2017 Impact

2017 Legislative Information

2017 Legislative Session

  • HB 1151:The “Spill Bill” would no longer require companies to report spills of crude oil, produced water, or natural gas that are contained to a well site or production location and are less than 10 barrels (420 gallons). The current rule is to report spills of 1 barrel or more. This bill has been signed by Gov. Burgum NWLA is NOT in support of this legislation.
  • SB 2236: This legislation would make permanent the Ombudsman Program, which was established in the 2015 Legislative Session through a bill that NWLA championed. NWLA is in support of this legislation. This bill was passed.
  • SB 2327:This bill would create the Division of Environmental Quality. NWLA recommended consideration of an amendment to allow for ⅓ representation on the board by agricultural representatives. NWLA feels this ratio is justified by the estimation that 90% of North Dakota’s land is utilized for agricultural purposes and ¼ of our economy is agriculturally based. This bill has been approved at ⅓ representation agricultural representatives on the Division of Environmental Quality board. This legislation has been passed. NWLA is in support of this legislation.
  • SB 2333:This legislation was introduced by NWLA and moved rule for DMR guidance into law 38-08. This legislation handles reclamation of all land, on and off site of oil well pads; and provides soil protection. This legislation passed and was championed by NWLA.
  • HB 1244: This bill is a quick take by the water boards and will most likely be killed. This legislation did not pass. NWLA is in support of this legislation.
  • HB 1020: This bill would implement taxation of fresh water sold by landowners, with funds going towards WAWS. This segment of legislation did not pass. NWLA is NOT in support of this portion of this legislation.
  • SB 2313: Wind oversight and Reclamation legislation. NWLA recommendation is to have the PSC in charge. The Ombudsman program that was created in 2015 has been expanded with a memorandum of understanding for the Agricultural Department to work with PCS pipeline and wind farm development.
  • SB 2331: The “Sampling Bill” relates to the protection of groundwater and other responsibilities of a mineral developer. It would require that soils and groundwater be sampled on oil and gas sites to provide a background record for spill cleanup. NWLA introduced and is in support of this legislation. This legislation did not pass.
  • SB 2047:Same as HB 1244, looking to add provisions of SB 2332 (Eminent Domain compensation) to it. The amendments from SB 2332 did not pass. NWLA is in support of this legislation.
  • SB 2156: The “Radioactive Waste” bill. This legislation was passed without the amendments. NWLA was in support of the bill and amendments. Amendments to this bill were added to address concerns of local elected officials representing the residents. The amendments would have made the local elected officials to the first to be notified.
  • SB 2332:The “Eminent Domain Bill”. This legislation failed to pass. NWLA introduced and is in support of this legislation.
  • Additional bill monitored by NWLA were, HB 1336, HB 1187, HB 1282, HB 1293, SB 2313, SB 2263, SB 2286, SB 2036, SB 2225, SB 2314, SB 2134, SB 2027.
  • NWLA was able to get an amendment into the PCS budget for a wind farm study. This study will help guide the agency and aid the property owners with the effects of a wind farm.
  • Through the entire legislative session, a representative from NWLA was present 85% of the time. Several meetings were held with the PCS, DMR, Health Department, Majority and Minority leaders and the Industrial Commission( Agricultural Commissioner, North Dakota Governor Burgum, and the Attorney General.)

Northwest Landowners Association NDSU Brine Spill Café talks

  • NWLA sponsored three cafe style talks to educate landowners. During this open conversation between landowners and soil specialist; we discussed the severity of brine spills, what a landowner can do if they see a brine spill on their property, and the different means of reclamation used after a spill. NDSU Extension Services and the NWLA urges all landowners to report spills of any size immediately and to take pictures of the spill site.

Hydrocarbon Remediation workgroups

  • Several NWLA board members are currently in negotiations for setting new guidelines for remediation and reclamation protocols; along with new standards.

Other involvements

  • Working with counties on uncompensated right of way takings
  • Mountrail County Tax equalization
  • DMR Rule making
  • Wind meetings
  • Pipeline meetings
  • Established brine spill guidelines with ND Health Department

 

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GET INVOLVED!

We want to hear from you! Your voice and your land matter. Talk to us so we can prepare and pass legislation that will create the most positive impact.

 

GET INVOLVED!

We want to hear from you! Your voice and your land matter. Talk to us so we can prepare and pass legislation that will create the most positive impact.