In North Dakota, Oil Industry Will Now Have A Harder Time Drilling On Tribal Land

BY ARI PHILLIPS

 In this 2014 photo, a traffic accident adds to the expansion problems of U.S. Route 85 between Williston and Watford City, N.D. The highway, once a two-lane road across the lonely prairie, is being transformed into a four-lane highway as the state experiences a fossil fuel-driven boom.

In this 2014 photo, a traffic accident adds to the expansion problems of U.S. Route 85 between Williston and Watford City, N.D. The highway, once a two-lane road across the lonely prairie, is being transformed into a four-lane highway as the state experiences a fossil fuel-driven boom.

CREDIT: AP/CHARLES REX ARBOGAST

On Tuesday, tribal residents in North Dakota elected a leader who is committed protecting the environment from the industry’s rapid expansion. At the same time, North Dakotans voted strongly against a measure that would have redirected five percent of the state’s oil extraction tax revenue toward conservation activities.

The “North Dakota Clean Water, Wildlife and Parks Amendment,” otherwise known as Measure 5, was defeated by a wide margin, with around 80 percent voting no. The fossil fuel industry vehemently opposed the measure, with Steve Adair, campaign chairman for Measure 5, telling ThinkProgress last week that outside oil groups such as the Washington-D.C. based American Petroleum Institute, were running their opposition “like a U.S. Senate campaign.”

North Dakota has been transformed in the last few years by the oil industry, and proponents of the measure saw it as a way of guaranteeing the long-term interests of the state are maintained even as the industry is accommodated. The proposal would have required North Dakota to use five percent of the state’s oil and gas extraction taxes — as much as $150 million a year — for creating parks, improving fish and wildlife habitats, preventing flooding, and maintaining water quality.

“This Measure is being fought by oil companies,” Evan Nelson, president of the Environmental Law Society at the University of North Dakota, told ThinkProgress last week. “There’s no more cogent opposition to Measure 5 than oil companies wanting to make more money. Careful reading of Measure 5, and common sense, led the Environmental Law Society to the conclusion that this is the right action and the right time.”

The state’s Republican governor, Jack Dalrymple, added confusion to the campaign by announcing his own plan to spend $30 million more on state parks and add an extra $50 million more for conservation efforts over the next few years. According toGoverning Magazine, this was widely seen as a way to undercut Measure 5.

In reflecting on the loss, Adair said the campaign for the measure helped “elevate the conversation” in the state and propel actions such as the governor’s announcement.

“Measure 5 was a pretty new, bold idea,” he said.“I’m not sure we would have seen the same response out of the governor and legislative leaders without pushing for something big.”

According to the Grand Forks Herald, North Dakota House Majority Leader Al Carlson, said he and Rep. Todd Porter plan to introduce a bill proposing at least $50 million in spending to enhance parks and other recreational opportunities.

Opponents of Measure 5, which included ranchers and educational advocates, were skeptical of mandating funds be spent on conservation measures. A statutory measure passed by lawmakers than can be altered by the Legislature may be more appealing to a wider group of interests. The state’s oil rush has led to an unprecedented need for spending on roads, schools, public works, law enforcement, and emergency medical services.

However, the oil industry would appear to want to use state revenue to help build the infrastructure they need to maximize profit in the near-term with little consideration for the long-term health of the state. Last year the industry tried to roll back the state’s extraction tax from 6.5 to 4.5 percent, and industry lobbyists will likely try again during the next session. The passage of Measure 5 would have made this more difficult.

North Dakotans also re-elected Agriculture Commissioner Doug Goehring on Tuesday, a position with a lot of clout in the state. Goehring, a Republican, will continue to hold one of three seats on the powerful North Dakota Industrial Commission, a key oil and gas regulator.

On The Reservation

In another important development for North Dakota yesterday, Mark Fox was elected to lead the Three Affiliated Tribes of Mandan, Hidatsa, and Arikara Nation in a race that included less than 2,500 voters but has far broader implications for the oil and gas industry. The Tribes sit atop a large part of the Bakken Shale — a major oil formation the has helped make North Dakota second only to Texas in oil production. The tribes’ Fort Berthold Indian Reservation currently produces over 330,000 barrels of oil per day. This is about a third of North Dakota’s total output and slightly less than the daily production of Oklahoma.

The Bismarck Tribune reports that about $25 million in oil tax revenue flows to the tribal treasury each month and the tribes’ annual budget has swelled from a modest $20 million annually to $520 million.

At an Oct. 15 press conference, North Dakota Department of Mineral Resources headLynn Helms said the oil industry is “deeply concerned” about the future of Fort Berthold because both candidates “are less friendly to rapid development than the current administration.”

Fox, the tax director for the tribe, and his opponent, Damon Williams, the tribal attorney, have vowed to propose tighter environmental regulations on the industry and ensure the vast windfall of revenue is better spent on improving life for tribal members. A report commissioned by the tribal council earlier this year found that the former chairman, Tex Hall, took advantage of his position and engaged in corrupt practices. Hall, a former oil-field services company executive, denies the charges.

Fox told Reuters this week that he is worried about protecting the environment, saying, “we’ve got oil companies in the midst of this gold rush who are doing things they shouldn’t be doing.”

“Corruption is our fault,” Fox also said. “Every time we have an election, we think about the wrong thing. We think ‘What can I do for me, for my family?’ Not enough are saying, ‘What are we going to do for everybody?’”

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