Industrial Commission Needs To Play Nice With Local Governments On Oil Development


According to this report in the Dunn County Herald, the Dunn County Commission will be appealing a recent decision by the North Dakota Industrial Commission to the state Supreme Court.

At issue is  jurisdiction over an oil waste treatment facility. When the company responsible for the project was denied zoning for it by the county they sued arguing that the NDIC, which had already permitted the project, had jurisdiction. Not the county folks.

A district court judge has agreed:

The dispute started in 2013, when Environmental Driven Solutions sued the county for denying zoning for storage tanks on property adjacent to the treatment facility. EDS said state law gives the Industrial Commission authority over oil drilling and oilfield waste and preempts local zoning. In this case, the NDIC had already issued a permit for the treatment plant.

In his ruling, Greenwood said there is a “dearth of case law” on the topic and instead relied on three Attorney General opinions that support the Industrial Commission’s jurisdiction. Greenwood said the NDIC rules are so comprehensive they have an “occupy the field,” effect. Effectively, the commission controls drilling, all operations for oil and gas production, and, since 2013, the disposal of saltwater and oilfield wastes.

State’s Attorney Pat Merriman says the ruling “changes the harmonious relationship between local and state government.”

“The Industrial Commission is required to give counties 15 days’ notice of a permit hearing and Merriman said that means residents who have concerns have to travel to Bismarck rather than talk locally to their zoning board,” the Herald reports.

That’s not good.

While I’m not certain I want to open the door to giving the myriad local governments jurisdiction over oil and gas development (and related industries), I think Merriman has a point. It would be a disaster to force the oil and gas industry to deal with dozens upon dozens of local jurisdictions across the state. It makes sense, when it comes to that industry, to have one statewide decider. But it would be equally disastrous for the NDIC and/or the oil and gas industry to lose the faith of local governments.

If they feel like they’re being steamrolled, the fallout could get ugly. And you can bet that other local governments are watching this case closely.

I hope the NDIC – made up of Governor Jack Dalrymple, Attorney General Wayne Stenehjem, and Agriculture Commissioner Doug Goehring – are paying close attention. I’m not sure the locals should get all the regulatory jurisdiction they want – in fact, I hope their appeal to the Supreme Court isn’t successful – but there has to be a way to better involve them in this process.