Last week the North Dakota Industrial Commission passed a raft of new rules for the state’s oil and gas industry, among them a new requirement for a six inch berm around well sites to help contain spills there. Spills contained on the well pads (which are the vast majority of the spills which occur in our state despite the impression you might get from certain politicians and activist groups) have pretty much zero environmental impact because the pads are designed to handle them.
The new six inch berm rule – which was a twelve inch rule when it was first proposed – will impact some 4,000 well sites in the state. Which means millions and millions of dollars worth of compliance costs for the industry.
I’m a bit agnostic as to the efficacy of this policy. On one hand, I really like the idea of making sure spills are contained at the well site. On the other hand, the industry argues that the berms don’t make sense at all well sites, and that berms designed to hold in oil and other drilling byproducts also old in rain and snow melt creating ponds around wells that are difficult to deal with. Especially in winter when the water freezes.
So it’s not just the cost of creating the berms, but also constantly pumping out the well site so that it’s not a mud hole or, worse, an ice rink.
But my argument here isn’t about the process, not the policy. The North Dakota Industrial Commission was able to implement a major new regulatory burden on an industry with very little debate or oversight from legislators. You know, the people whose job it is to make the laws.
When this happens at the national level, with the EPA or the IRS or some other branch of the federal government essentially legislating without Congress, most of us here in North Dakota see it as a problem. Yet we allow the NDIC to legislate as regulators here in the state?
The Legislature does have some oversight on these rules. The Administrative Rules Committee has review authority, but it’s sort of a toothless process. Historically that committee just verifies that new rules are in keeping with legislative intent before rubber stamping them. There is no debate over whether or not a given rule might be good policy. The lawmakers only verify that it’s legal.
I think we can all agree that just because something the government does is legal doesn’t mean the government ought to do it.
Back to this issue of the berms, because it’s such a sweeping rule with major fiscal implications for the companies which must abide by it, I’d like to see it (and other rules like it) subjected to a greater degree of scrutiny and debate.
Maybe that’s something for the Legislature to consider. A law requiring that regulatory rules which go beyond a certain threshold – perhaps a dollar amount of expected impact – be approved by the Legislature, either through a body like the Administrative Rules Committee or the the full in-session Legislature, would be a welcome change I think.
Back in 2011 then-Congressman Rick Berg got behind what was called the REINS Act, which would have given Congress the sort of oversight over federal regulation that I describe above.
I think North Dakota needs a state-level REINS Act.
The genius of the American system of government is its checks and balances. There is nothing wrong with balancing the executive branch’s regulatory authority with legislative oversight. Not to stop or inhibit regulation, but to ensure that rules with major impacts on our state’s businesses and citizens are thoroughly vetted and in keeping with the will of the people.