The State of North Dakota Can’t Give Away Things It Doesn’t Own


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

As SAB readers know, there has been a years-long dispute over ownership of minerals under Lake Sakakawea.

That lake is man-made, resulting from the Garrison Dam holding back Missouri River water. When the dam was built there was an eminent domain process whereby the government bought the private property which was to be flooded. But many of the landowners sold only their surface rights, maintaining their rights to the minerals under the surface.

For decades that distinction was a moot point. There was no practical way to develop the minerals under the lake. But then along came new techniques such as horizontal drilling, and suddenly those minerals became accessible. And thus valuable.

The State of North Dakota, through the Land Board (which oversees the state’s mineral rights interests), has claim to mineral rights under the Missouri River including the historic river channel through Lake Sakajawea (where the river was before the lake was created). What is at issue, what is the subject of litigation filed against the State of North Dakota, are the mineral rights under all that flooded land.

Attorneys for the state have been trying to argue that the lake is now merely an expansion of the river. “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 Legislature attempted to fix the issue last year by passing a bill making it clear that the state doesn’t own those mineral rights. But now a lawsuit, which names among its plaintiffs Democratic lawmaker Marvin Nelson, is claiming that bill is an unconstitutional give away of state resources:

BISMARCK, N.D. (AP) — A North Dakota lawmaker is among those suing the state over a new law intended to clarify disputed ownership of minerals under a Missouri River reservoir.

Rep. Marvin Nelson says the law is unconstitutional and a giveaway of state resources under Lake Sakakawea. He says the issue should be settled by a judge and not lawmakers.

What troubles me about the premise of this lawsuit, as it’s described by the Associated Press, is that it presumes that the State of North Dakota owned the mineral rights in question.

That doesn’t seem to be the case. If the government never purchased the mineral rights from the land owners who saw their property flooded when the lake was created, then they still own those property rights. Which is something the state Supreme Court has already ruled in the aforementioned Wilkinson case:

If the district court determines the State owns the minerals, the plaintiffs will be deprived of the mineral interests. The federal government compensated the plaintiffs for the surface property, but the plaintiffs have not been compensated for the mineral interests. The plaintiffs are entitled to compensation if the government’s actions result in a “taking” of the mineral interests.

Rep. Nelson tells us that the state is giving away billions of dollars in revenues by not claiming these mineral rights. I don’t think that’s accurate. Even if the state does ultimately get rights to those minerals, the private mineral owners will still need to be compensated from the taking per the state Supreme Court.