North Dakota Shouldn’t Be in the Business of Expropriation

A drilling rig is pictured near Lake Sakakawea near New Town, N.D., on Thursday, Sept. 8, 2016. Some fear that uncertainty about who owns the minerals under the lake will deter oil development in the area. Amy Dalrymple/Forum News Service

“House approves Missouri River mineral leasing bill estimated to cost $187 million,” reads this headline.

That’s more than a little misleading. There is no “cost’ here. What the bill in question does is stop the state from seizing mineral rights which currently belong to private people.

Saying there’s a cost to that is like saying you lost money because you didn’t shoplift.

There is no cost to the state deciding not to expropriate other people’s property.

At issue are mineral rights under Lake Sakakawea, which I’m sure I don’t need to remind you readers is a man-made body of water resulting from the damming of the Missouri River.

When it was created it flooded hundreds of square miles of private property.

Property with some very valuable minerals underneath.

What the bill in question does is stop the state from seizing mineral rights which currently belong to private people. Saying there’s a cost to that is like saying you lost money because you didn’t shoplift.

Hundreds of oil wells have been drilled over the years tapping into minerals under the lake to the benefit of several thousand private citizens who maintained rights to them.

Or, at least, they thought they owned the rights.

The State of North Dakota, without question, owns the rights to minerals under the Missouri River. Those mineral rights are managed by what everyone calls the Land Board. Sitting on that board is Governor Doug Burgum, Attorney General Wayne Stenehjem, Superintendent Kirsten Baesler, Treasurer Kelly Schmidt, and Secretary of State Al Jaeger.

When it comes to the mineral rights under Lake Sakakawea, North Dakota has always claimed those minerals under the historic Missouri River channel as it existed prior to the creation of the lake.

Except, in 2015 the Land Board ordered state engineers to do a new survey. Now the state has been claiming in legal disputes that their rights extend to the ordinary high water mark of the Missouri River, and that includes all of Lake Sakakawea.

“Lake Sakakawea is simply an expansion of the Missouri River; it is not a separate and discrete water body,” attorney Jennifer Verleger, who works for Attorney General Wayne Stenehjem, wrote in Wilkinson v. Board of University and School Lands.

The implications of this statement are astounding. Oil industry folks I’ve spoken to say companies have been paying royalties on these rights to private owners for years. Their estimate, should the state win this argument, is that billions of royalty payments would have to be unwound. Something that would undoubtedly result in blizzard of lawsuits involving the oil industry, these private mineral owners, and the state.

All because the state, in 2015, rather arbitrarily changed the definition of which minerals belong to them.

That’s where SB2134, introduced by Sen. Kelly Armstrong (R-Dickinson), comes in. It limits the state’s mineral rights claim to the historic Missouri River channel.

The bill passed in the Senate earlier this session, and passed in the House yesterday on a 79-11 vote. Opponents, mostly Democrats who are upset over spending cuts, are calling it a give away, but it’s really not.

It’s the prevention of a take away.

If the state needs more revenues – it doesn’t, the problem is spending – then the proper thing to do is debate tax or fee hikes. The improper thing to do is grab a bunch of other people’s property setting off what would probably be years of litigation as the land grab is disputed and huge sums of royalty payments are unwound.

Besides, these revenues are trust fund dollars. They do not go into the general fund.

Passing SB2134 to prevent this land grab was the right call. The bill now goes to the Senate for concurrence. Let’s hope it ends up on Governor Doug Burgum’s desk.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and the host of the Rob (Re)Port on Fargo-based WDAY AM970 from 1-2pm weekdays.

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