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by justdrew » Thu Nov 27, 2014 8:50 pm
by Luther Blissett » Mon Dec 01, 2014 5:47 pm
The Downside of the Boom
By DEBORAH SONTAG and ROBERT GEBELOFF NOV. 22, 2014
North Dakota took on the oversight of a multibillion-dollar oil industry with a regulatory system built on trust, warnings and second chances.
WILLISTON, N.D. — In early August 2013, Arlene Skurupey of Blacksburg, Va., got an animated call from the normally taciturn farmer who rents her family land in Billings County, N.D. There had been an accident at the Skurupey 1-9H oil well. “Oh, my gosh, the gold is blowing,” she said he told her. “Bakken gold.”
It was the 11th blowout since 2006 at a North Dakota well operated by Continental Resources, the most prolific producer in the booming Bakken oil patch. Spewing some 173,250 gallons of potential pollutants, the eruption, undisclosed at the time, was serious enough to bring the Oklahoma-based company’s chairman and chief executive, Harold G. Hamm, to the remote scene.
It was not the first or most catastrophic blowout visited by Mr. Hamm, a sharecropper’s son who became the wealthiest oilman in America and energy adviser to Mitt Romney during the 2012 presidential campaign. Two years earlier, a towering derrick in Golden Valley County had erupted into flames and toppled, leaving three workers badly burned. “I was a human torch,” said the driller, Andrew J. Rohr.
Blowouts represent the riskiest failure in the oil business. Yet, despite these serious injuries and some 115,000 gallons spilled in those first 10 blowouts, the North Dakota Industrial Commission, which regulates the drilling and production of oil and gas, did not penalize Continental until the 11th.
The commission — the governor, attorney general and agriculture commissioner — imposed a $75,000 penalty. Earlier this year, though, the commission, as it often does, suspended 90 percent of the fine, settling for $7,500 after Continental blamed “an irresponsible supervisor” — just as it had blamed Mr. Rohr and his crew, contract workers, for the blowout that left them traumatized.
Since 2006, when advances in hydraulic fracturing — fracking — and horizontal drilling began unlocking a trove of sweet crude oil in the Bakken shale formation, North Dakota has shed its identity as an agricultural state in decline to become an oil powerhouse second only to Texas. A small state that believes in small government, it took on the oversight of a multibillion-dollar industry with a slender regulatory system built on neighborly trust, verbal warnings and second chances.
In recent years, as the boom really exploded, the number of reported spills, leaks, fires and blowouts has soared, with an increase in spillage that outpaces the increase in oil production, an investigation by The New York Times found. Yet, even as the state has hired more oil field inspectors and imposed new regulations, forgiveness remains embedded in the Industrial Commission’s approach to an industry that has given North Dakota the fastest-growing economy and lowest jobless rate in the country.
For those who champion fossil fuels as the key to America’s energy independence, North Dakota is an unrivaled success, a place where fracking has provoked little of the divisive environmental debate that takes place elsewhere. Its state leaders rarely mention the underside of the boom and do not release even summary statistics about environmental incidents and enforcement measures.
Over the past nine months, using previously undisclosed and unanalyzed records, bolstered by scores of interviews in North Dakota, The Times has pieced together a detailed accounting of the industry’s environmental record and the state’s approach to managing the “carbon rush.”
The Times found that the Industrial Commission wields its power to penalize the industry only as a last resort. It rarely pursues formal complaints and typically settles those for about 10 percent of the assessed penalties. Since 2006, the commission has collected an estimated $1.1 million in fines. This is a pittance compared with the $33 million (including some reimbursements for cleanups) collected by Texas’ equivalent authority over roughly the same period, when Texas produced four times the oil.
“We’re spoiling the child by sparing the rod,” said Daryl Peterson, a farmer who has filed a complaint seeking to compel the state to punish oil companies for spills that contaminated his land. “We should be using the sword, not the feather.”
North Dakota’s oil and gas regulatory setup is highly unusual in that it puts three top elected officials directly in charge of an industry that, through its executives and political action committees, can and does contribute to the officials’ campaigns. Mr. Hamm and other Continental officials, for instance, have contributed $39,900 to the commissioners since 2010. John B. Hess, chief executive of Hess Oil, the state’s second-biggest oil producer, contributed $25,000 to Gov. Jack Dalrymple in 2012.
State regulators say they deliberately choose a collaborative rather than punitive approach because they view the large independent companies that dominate the Bakken as responsible and as their necessary allies in policing the oil fields. They prefer to work alongside industry to develop new guidelines or regulations when problems like overflowing waste, radioactive waste, leaking pipelines, and flaring gas become too glaring to ignore.
Mr. Dalrymple’s office said in a statement: “The North Dakota Industrial Commission has adopted some of the most stringent oil and gas production regulations in the country to enhance protections for our water, air and land. At the same time, the state has significantly increased staffing to enforce environmental protections. Our track record is one of increased regulation and oversight.”
Researchers who study government enforcement generally conclude that “the cooperative approach doesn’t seem to generate results” while “the evidence shows that increased monitoring and increased enforcement will reduce the incidence of oil spills,” said Mark A. Cohen, a Vanderbilt University professor who led a team advising the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.
With spills steadily rising in North Dakota, evidence gathered by The Times suggests that the cooperative approach is not working that well for the state, where the Industrial Commission shares industry oversight with the state’s Health Department and federal agencies.
One environmental incident for every 11 wells in 2006, for instance, became one for every six last year, The Times found.
Through early October of this year, companies reported 3.8 million gallons spilled, nearly as much as in 2011 and 2012 combined.
Over all, more than 18.4 million gallons of oils and chemicals spilled, leaked or misted into the air, soil and waters of North Dakota from 2006 through early October 2014. (In addition, the oil industry reported spilling 5.2 million gallons of nontoxic substances, mostly fresh water, which can alter the environment and carry contaminants.)
The spill numbers derive from estimates, and sometimes serious underestimates, reported to the state by the industry. State officials, who rarely discuss them publicly, sometimes use them to present a rosier image. Over the summer, speaking to farmers in the town of Antler, Lynn D. Helms, the director of the Department of Mineral Resources, announced “a little bit of good news”: The spill rate per well was “steady or down.” In fact, the rate has risen sharply since the early days of the boom.
Presented with The Times’s data analysis, and asked if the state was doing an effective job at preventing spills, Mr. Helms struck a more sober note. “We’re doing O.K.,” he said. “We’re not doing great.”
He noted it is a federal agency, the Pipeline and Hazardous Materials Safety Administration, that regulates oil transmission pipelines. “You can’t use the spills P.H.M.S.A. was responsible for and conclude my approach to regulation is not working,” he said.
Indeed, as the tangle of buried pipelines has grown, there have been no federal pipeline inspectors based in North Dakota. But there have been no state inspectors, either, to oversee the much larger network of gathering pipelines unregulated by the federal government — a fount of many spills.
Penalizing companies for every violation is imprudent and can be counterproductive, Mr. Helms said, potentially “leaving the citizens of North Dakota with enormous liabilities on their hands when bankrupt operators walk away.”
Continental Resources hardly seems likely to walk away from its 1.2 million leased acres in the Bakken. It has reaped substantial profit from the boom, with $2.8 billion in net income from 2006 through 2013.
But the company, which has a former North Dakota governor on its board, has been treated with leniency by the Industrial Commission.
From 2006 through August, it reported more spills and environmental incidents (937) and a greater volume of spillage (1.6 million gallons) than any other operator. It spilled more per barrel of oil produced than any of the state’s other major producers. Since 2006, however, the company has paid the Industrial Commission $20,000 out of $222,000 in assessed fines.
Continental said in a written response to questions that it was misleading to compare its spill record with that of other operators because “we are not aware other operators report spills as transparently and proactively as we do.” It said that it had recovered the majority of what it spilled, and that penalty reductions came from providing the Industrial Commission “with precisely the information it needs to enforce its regulations fairly.”
What Continental paid Mr. Rohr, the injured driller, is guarded by a confidentiality agreement negotiated after a jury was impaneled for a trial this September. His wife, Winnie, said she wished the trial had gone forward “so the truth could come out, but we just didn’t have enough power to fight them.”
Looking back now, one thing gnaws at her.
“You know what really bothered me?” Mrs. Rohr said. “Harold Hamm flew up to see the damage to the rig but didn’t go see the guys who were burned.”
Embracing the Oil Industry as Economic Salvation
Given the state’s history of population loss and economic decline, state officials delighted in the arrival of oil companies eager to exploit the tremendous untapped potential of the primeval Bakken formation deep beneath the sweeping prairies and rugged badlands of western North Dakota.
Especially during the first years, officials were anxious that this oil boom, like previous ones, could be fleeting, that oil companies, if not embraced, could shift their rigs and capital investment to fields with less severe winters and better access to markets.
“There was a mentality that we should be helping things along, not getting in the way with regulations,” said Todd Sattler, a lawyer who served as a state oil and gas hearing officer through mid-2011. “It wasn’t blatant disregard for bad things, just permissive.”
Mr. Sattler said he tried to establish a protocol for field investigations, preparing a three-page checklist of procedures, including how to conduct witness interviews. The response from the state’s chief inspector, he said, was: “I’m not going to be a cop out there, Todd.”
In 2006, the Industrial Commission issued 419 drilling permits, processing applications in five days. By 2011, when it handed out 1,927 permits, it was still managing to issue them in 10 days. At that point, concerned that the Environmental Protection Agency might establish a moratorium on fracking — the legislature set aside $1 million to sue the E.P.A. — there was a desire to establish facts on the ground.
Some officials in western North Dakota challenged the accelerating pace. “It was so ragtag and breathless,” said Dan Kalil, the Williams County Commission chairman. “Infrastructure in every facet wasn’t able to keep up.”
Ron Ness, president of the North Dakota Petroleum Council, said: “It’s easy to say it’s been too fast, too much. But this is what North Dakotans have hoped for, prayed for.” Investors from all over the country are now drawn to tiny, remote places like Watford City, where “there wasn’t a damn thing” seven years ago, he said.
“We’ve got the largest-producing Cinnabon anywhere in the world,” he said. (The Williston Cinnabon, more precisely, has the highest sales in a travel plaza, the company said.)
In the first five years, the “slow, nasty drip, drip, drip” of routine spills — as Edmund Baker, environmental director for the Fort Berthold Reservation in the heart of the oil patch, calls it — went largely unnoticed and sometimes unreported to the authorities.
In the spring thaw of 2011, however, after a winter of record snowfall, scores of oil waste pits overflowed at once. The large, open pits, adjacent to rigs throughout the Bakken at that point, disgorged oil-based drilling mud that mixed with snowmelt and streamed across farmland and into stock ponds, creeks and river tributaries.
Farmers were horrified; the local news media took note. And, in concert with the development of a new regulation outlawing liquid waste pits, the Industrial Commission undertook its first — and so far only — crackdown on spills. It filed several dozen formal complaints against companies that, Mr. Helms said, had defied the Mineral Resources Department’s warning to take precautions to prevent the predicted overflows.
Hess Oil was one target. It paid its fines in full: $112,500.
Continental, like some other companies, disputed its responsibility.
Its lawyer, a former counsel to the Industrial Commission, proposed that consent agreements state that the overflows were caused by unforeseeable extreme weather. Instead, the agreements attributed the violations “in part” to bad weather “unforeseen by Continental.”
Still, the Industrial Commission accepted $12,500 rather than $125,000.
That fall, at a commission meeting in Bismarck, Mr. Helms explained the logic behind the waste pit settlements.
Most companies would make “a voluntary 10 percent payment” and 90 percent would be suspended for a year, during which the operator would have to “keep completely clean” of the offense, Mr. Helms said, according to the meeting minutes. This works, he added, because “keeping that 90 percent hanging over their head for a year creates a culture change within the company.”
Mr. Helms said this had been departmental practice since the early 2000s when officials were trying to prod Earl Schwartz of GoFor Oil — his logo was a gopher in a hard hat — to plug some wells and start production on others.
Sarah Vogel, a former Industrial Commission member, said she considered it a startling admission that current policy was based on “the treatment of a small wildcatter from an earlier era.”
“It’s absurd to compare an Earl Schwartz to a Hess or any of these other enormous companies worth billions,” she said. “To me, announcing publicly that it is your practice to suspend the bulk of all fines makes a mockery of the whole enforcement system. Should we tell the general public that if they’re caught speeding, the fine is $100, but they only have to pay $10? It’s an invitation to violate the law.”
Bearded and deliberative, Mr. Helms is a petroleum engineer by trade, with a hand that bears the burn scars of an industrial accident. The state’s senior oil official since 2005, he previously worked at Texaco for two years and at Hess for 18.
To his critics, Mr. Helms personifies a cozy relationship between the commission and oil companies. His dual mission heightens this, they say, as he is compelled by statute both to promote “the greatest possible economic recovery of oil and gas” and to enforce regulations.
Mr. Helms, however, said that his background gives him access and authority, and that his job is to promote responsible development, not the industry.
“In order to effectively do that I have to be on a first-name basis with C.E.O.s and managers,” he said. “If they didn’t trust me, and if they expected every time they made a mistake they were going to get slapped with a great big fine or be singled out or profiled, I wouldn’t get straight answers.”
The commission has imposed its stiffest penalties on smaller companies. Last year, it fined Halek Operating, whose leader had a history of swindling investors in Texas, a record $1.5 million for a defective waste disposal well that threatened a town’s water supply. But Halek has gone out of business, and the state is unlikely to obtain more than the $140,000 in bonds it has seized.
Mr. Helms said that problems in the oil patch were often the fault not of the major companies but of the contractors who do their physical labor.
“The large independents — the bread and butter of the North Dakota oil industry — really understand their social license to operate and really try to emphasize environment, health and safety,” he said. “But there’s a disconnect.”
L. David Glatt, Mr. Helms’s counterpart in the Health Department’s environmental division, has voiced the same sentiment. Though the state’s chief environmental regulator, he described himself on a radio show last year as “not a regulations guy” — after the host said that “the word ‘regulation’ is like Lucifer” in North Dakota.
Before the boom, Mr. Glatt said in an interview, the Health Department had “a very hands-on, personalized approach, going out and helping people solve their problems.”
“Now with the oil boom bringing in people who are just here to make a living or make money,” he said, “we are being forced to change our regulatory approach to in some cases a very heavy-handed one, which is a paradigm shift for us.”
Judging by the data, the Health Department, overseen by civil servants and not elected officials, appears to have been tougher on the oil industry than the Industrial Commission has. It has collected over three-quarters of the fines levied, amounting to at least $4.1 million since 2006.
Still, most of that revenue derived from a single industrywide enforcement action that, Mr. Glatt said, the industry itself requested.
After years of underestimating volatile emissions from its oil storage tanks in the Bakken and allowing them to vent directly into the air, the industry “self-reported” the potential pollution and safety problem to the government.
A task force was formed; the companies devised a new model for estimating the emissions and pledged to control them through devices. And then they made a request: “They wanted fines to be collected by the state to reduce their exposure to lawsuits,” Mr. Glatt said. “We said, ‘Sure, we’d be more than happy to take your money.’ ”
The Health Department did not publicize that it collected record penalties for these violations last year: $2.64 million, including unprecedented sums like $418,500 from Hess and $305,400 from Continental.
“We are not wired like that,” Mr. Glatt said. “It goes to the fact that, honestly, when I get to the point where I have to collect a penalty, I look at that as a failure on our part.”
A Record Spill Puts the Focus on the Costs of a Boom
At her isolated farmhouse near Tioga, Patricia Jensen disarms guests — pipeline executives, oil spill cleaners — with a glistening berry pie fresh from the oven. She and her husband, Steven, are firm but nonconfrontational in their approach to what he calls the “ecological nightmare” in the backyard of the family’s century-old homestead.
“We’ve kind of taken a route of not being too sour, but yet we’re really concerned,” Mr. Jensen said.
What happened to them last fall — considered the largest on-land oil spill in recent American history — confronted North Dakota with the potential costs of the boom.
It shined a light on the state government’s lack of transparency when it went unreported to the public for 11 days. It raised awareness that spills of all magnitudes were daily and routine. It highlighted the inadequacy of pipeline monitoring.
And it made clear that even in the worst cases the authorities are hesitant to use punitive sanctions. More than a year after the spill, neither the federal nor the state government has penalized the company responsible, Tesoro Logistics of San Antonio.
“Clearly, they have impacted the groundwater system,” Mr. Glatt said. “There will be an enforcement action. But we use a carrot and stick approach. The carrot is if you get into it and clean it quickly, the stick won’t be as severe.”
Late last September, Mr. Jensen was harvesting waist-high durum wheat when he found his combine’s tires wet with an unmistakable sheen. His wife called the operator of a nearby well, which contacted Tesoro, and both companies immediately sent out representatives.
“It was dark out at this point,” Mrs. Jensen said. “We went to drive wide around what we thought was the spill and realized that we were not at the edge of it. We were still in it.”
Mr. Jensen continued: “There was a question of, well, whose line is it? It was squirting out of the ground. But the minute Tesoro shut its valve, there was a loud sucking sound.”
In its initial report, Tesoro seriously underestimated the contamination. A week and a half later, after a “subsurface assessment” request by the state, it tripled its estimate to 20,600 barrels, or 865,200 gallons. The lost oil had soaked a large stretch — equal to about six football fields — of the windswept land where the Jensens run cattle and rotate crops like sunflowers and sunshine-yellow canola.
The spill was publicly disclosed only after local reporters learned of it, provoking an outcry from environmentalists that led to the creation of a spills website.
In Tioga, a preliminary investigation found a small hole in the pipeline that appeared to have been caused by lightning, said the federal pipeline administration, whose final investigation has yet to be completed.
That cast the incident as an act of nature, but Tesoro officials now acknowledge that the hole had gone undetected for as long as two months.
“How do you lose over 20,000 barrels of oil and not realize it?” Mr. Glatt said. “That does kind of boggle the mind a little bit.”
In a statement to The Times, Tesoro expressed “deep regret.”
“Our systems did not prevent the spill, and we find that unacceptable,” it said. “We have put additional systems and controls in place and are committed to operating a safe pipeline system.”
Before the leak sprang in July 2013, Tesoro had not conducted an internal inspection of that segment of pipeline for eight years. Federal officials had last inspected the Tesoro network in North Dakota in 2010.
Pipeline leaks are not the most common cause of spills; valve or piping connection problems are, The Times found. But they spew the greatest volume of oil and wastewater and are the most likely to cause pollution.
Unlike several other major oil-producing states, North Dakota has until now relied on federal inspectors — based in Kansas City, Mo., 950 miles from Tioga — to monitor all its oil transmission lines, interstate and intrastate.
At the time of the spill, Brian Kalk, chairman of the state Public Service Commission, felt keenly frustrated, he said: “The company was not as forthright as they should have been. Everybody in the state was asking what’s going on, and I didn’t have jurisdiction on this pipeline. I didn’t like it.”
As a result, Mr. Kalk’s commission is seeking to take over the monitoring of the crude oil transmission pipelines that travel solely within the state.
Transmission pipelines, which carry oil to market, are not the only problem, however. Until this year, no authority, federal or state, monitored what Mr. Helms estimates to be 18,000 miles of gathering pipelines, which transport oil and wastewater from wells to collection sites. In fact, the North Dakota government does not even know their precise locations.
But, with legislative permission, Mr. Helms is taking the gathering lines under his aegis and hiring the state’s first three hazardous-liquid pipeline inspectors.
In Tioga, the Jensens are inclined to look at the bright side, though 33 acres of their farmland have been cordoned off for an industrial cleanup operation expected to take at least another year. They are glad that their spill was oil, not wastewater — “There’s no cleaning up of that,” Mr. Jensen said — and hope it served as “an eye-opener.”
“The industry really wants to fight putting monitoring devices on pipelines, but it’s a no-brainer, seems like,” Mr. Jensen said. “The cost of monitoring equipment is obviously far cheaper than the cost of cleanup.”
Tesoro said the cleanup would cost more than an initial estimate of $4 million and “less than $25 million.” It hired a Canadian company, Nelson Environmental Remediation, to treat the contaminated soil by burning it on site in “thermal desorption units.”
“We’re kind of like the proctologists of the industry,” said Warren Nelson, the company’s vice president. “We deal with the problems nobody wants to talk about.”
From Wastewater Contamination, Sterilized Soil and Shriveled Crops
One August evening this year, after a barbecue dinner beneath an elaborate skull-and-antler chandelier in the Outlaw Shack at Antler Memorial Park, Mr. Helms and Mr. Glatt faced an audience of farmers disgruntled by the wastewater contamination of northwestern North Dakota.
Their corner of the state is like a cautionary tale. It is pocked with the remnants of 1980s oil production: abandoned wastewater ponds, some of which leached brine downward and outward, sterilizing the soil and shriveling crops. State officials have estimated it would cost $2 million each to reclaim what might amount to 1,000 ponds, said State Representative Marvin E. Nelson.
“Well, we have more than $2 billion in our Legacy Fund,” he said, referring to a set-aside fund containing oil tax revenues. “So why not take the legacy from this oil boom to fix the legacy from the last oil boom?”
Though the industry now disposes of oil field brine primarily by injecting it deep underground, it still needs to be transported to disposal wells and remains a stubborn pollution problem. For every barrel of oil, about 1.4 barrels of brine is produced, state officials say, and far more of it spills than does oil.
And while the industry calls it saltwater — “which makes it sound harmless, like something you would gargle with,” said Derrick Braaten, a lawyer who represents farmers — it is highly saline and can be laced with toxic metals and radioactive substances.
Three years ago, a farmer in the Antler audience experienced one of the largest oil field wastewater spills ever in North Dakota. A leaking wastewater line contaminated some 24 acres of farmland and eight surface ponds, and the site has yet to be restored to health.
After the leak was detected, cleanup crews pumped out two million gallons of severely contaminated water, with chloride levels 2,700 times higher than normal, and a generator was still pumping out contaminants this summer.
“Three years!” the farmer, Darwin Peterson, exclaimed at the meeting. “Three years, and this spill has been addressed in a Band-Aid fashion. Meanwhile, that 24 acres has expanded, with Mother Nature, to the neighbors. When is enough enough?”
State officials say the spill far exceeded the 12,600 gallons originally reported by the company, Petro Harvester, though it remains listed that way on the state’s spills website. Mr. Helms, in an email last year to his spokeswoman, Alison Ritter, estimated it at 332,000 gallons. Mr. Nelson, the legislator and agronomist, thinks it probably was three times that much.
The state has not yet penalized Petro Harvester.
Underlying the state’s regulatory posture is the premise that spills are all but inevitable and will increase alongside increases in drilling. But that is not a universally shared perspective.
“There’s this idea that spills are just the cost of doing business,” said Amy Mall, a senior policy analyst with the Natural Resources Defense Council. “But there’s no technical justification for all these spills. And it’s not acceptable. It’s just not. It just shows how poorly the oil and gas industry is doing its job, and that nobody is making them do it right.”
To a skeptical audience in Antler, Mr. Helms proclaimed that North Dakota was “head and shoulders above our sister states” in the region for its vigilance as measured by the ratio of wells to inspectors, the frequency of inspections and the authority to fine up to $12,500 per offense a day.
He said that almost all problems found by his inspectors were corrected within 30 days of verbal warnings. Some 2,500 warnings were issued last year, Ms. Ritter said; only 4 percent resulted in a written violation and only nine complaints were filed (up from four in 2012).
In the park, Mr. Helms offered a boardroom-style PowerPoint presentation, including a graphic that he said contained the “good news” that the spill rate per well was steady or down.
His figures, however, provided to The Times later, show that the number of spills continued to grow faster than the number of wells — just not as fast as before. All told, the number of wells is up 200 percent and spills 650 percent since 2004.
The farmers in Antler said they assumed Mr. Helms’s spills data was comprehensive, but he told The Times later that he was including only spills under his jurisdiction. That omitted hundreds of incidents, including the Jensens’ spill and the 464,000 gallons of oil that gushed from a fiery train derailment near Casselton last December.
The most encouraging statistic, Mr. Helms told the farmers, was that a higher proportion of individual spills were being contained to production sites. That is true according to the numbers he uses. But, looking at the actual volume of pollutants and all reported spills, The Times found a decline, not an improvement, in spill containment — with 45 percent contained from 2011 to 2013, down from 62 percent in the previous three years.
Without engaging in any data analysis, the farmers in Antler were suspicious of the spill estimates because they were based on self-reporting by the industry. “You take the word of the operators? That’s your first mistake,” one man said, to laughter. They remarked that their own spills were often drastically underestimated on the state’s spills website.
Indeed, The Times found scores of cases on that website where the release of pollutants was not just undercounted but marked as zero. One supposedly zero-volume wastewater spill in Bottineau County last year required the removal of 600 dump-truck loads of contaminated soil.
For a North Dakotan trying to make sense of the state’s environmental and enforcement records, numbers are essentially inaccessible. The state spills site posts incidents in chronological order, without summary statistics, and it is not searchable. Oil and gas enforcement data is not made public at all, unlike in Texas, where the legislature mandates quarterly reports.
The Times built a database to analyze the state’s raw information from a variety of perspectives, including a company-by-company assessment. It found that companies in the Bakken spill at different rates. This suggests to some experts that companies could do more to prevent and minimize environmental incidents.
“Whether it’s maintaining equipment properly, monitoring equipment routinely, training individuals well, having backup equipment on site or having containment machinery — there are all kinds of things that can be done,” Professor Cohen of Vanderbilt said. “But they all require money and attention.”
Statoil, a multinational company whose largest shareholder is the Norwegian government, now ranks as the state’s fifth-biggest producer. With a professed goal of “zero incidents, zero releases,” according to Russell Rankin, its regional manager, it has reported no blowouts and has the best record in the state among the major producers in terms of how many gallons of oil it produces for each incident.
Based on volume, Statoil has produced 9,000 gallons of oil for every gallon of spillage; Continental has produced 3,500. Statoil contained some 70 percent of its spill volume to production sites. Continental contained less than half, The Times found.
In its written response, Continental disputed The Times’s “math,” but did not respond further after it was sent a spreadsheet of reported incidents that formed the basis for the findings.
Continental, which on its website calls itself “America’s oil champion,” said it has “implemented a corporate policy focused on reporting, spill reduction and, ultimately, elimination.” It emphasized that it was the largest producer in the Bakken and “managed the largest volume of liquids.” It underscored that “our diligent spill response efforts have enabled us to recover the majority of all volumes spilled.”
And, Continental said, The Times should not imply that “volumes spilled remain in the environment in perpetuity and that we and other operators have no concern for doing anything more than reporting spills as ‘an inevitable byproduct of oil production.’ ”
The Golden Egg
When the Skurupey well blew out last summer, Continental waited some 10 hours to notify the local authorities.
“They should have called us a lot sooner, but when these things happen, the oil companies pretty much take over, " said Sheriff Dave Jurgens of Billings County. “They have their own security, and they don’t let anybody on location, unless you’re with Continental or the state Industrial Commission. And I totally understand why. It’s specialized-type stuff.”
The public never knew the blowout had occurred because the well, like many new wells, had been granted confidential status by the state for competitive reasons; almost everything except its existence was off the record for six months.
Oil, water and chemicals shot 40 feet into the air from the wellhead but did not ignite. One worker was injured with a broken finger and bruises to his head and chest, the sheriff said. “They didn’t call an ambulance, just put him in a pickup and took him to the E.R.,” he said. “That was not very wise on their part.”
The oil misted over hundreds of acres, contaminating hundreds of bales of hay and alfalfa fields.
“They redid the land, washed all the tanks,” Mrs. Skurupey said. “Continental was super-nice. They left no stones unturned, as far as I was concerned. They paid us all for damages, and we signed agreements that we wouldn’t sue.”
Defending itself against the commission’s enforcement action this year, Continental argued that its own investigation revealed that “an irresponsible supervisor’s callous disregard of” its “well-established standard operating procedures” caused the Skurupey blowout.
At the Williston courthouse in September, Continental’s lawyer, Steven J. Adams of Tulsa, Okla., placed the responsibility for the previous blowout in Golden Valley County squarely on Mr. Rohr and his crew, who worked for Cyclone Drilling of Wyoming.
“It was the Cyclone crew that failed to do its job,” he told the jury.
Mr. Rohr’s lawyer, Justin L. Williams of Corpus Christi, Tex., opened by suggesting that Continental prized speed over safety: “Pedal to the metal, no brakes, lives shattered.”
During the voir dire process, many prospective jurors had revealed just how interwoven their lives were not only with the oil industry, but also with Continental. Some had worked for or done business with Continental; others owned its stock or received royalty checks from Continental wells.
Asked if they had strong feelings about the oil boom, almost all, even those who saw the positive, raised their hands to say they thought it had had negative consequences, too. A landowner referred to oil sludge buried and flares burning on her property, a nurse to injured oil workers treated at her clinic, an oil field technician to a “hurry up and wait world” that put profits first.
The next morning, a settlement was reached.
Later, in a nearby hotel, sitting with his lawyers, his wife and a former co-worker, Mr. Rohr lifted his T-shirt to reveal what he had been prepared to show the jury: his pink, waffled back, patched together through skin grafts after the rig at the Beaver Creek State 1-36H well exploded into flames on July 24, 2011.
“My memories of it are bad,” he said. “I seen a big, bright, white light, and I didn’t think I’d make it out. And then that big blast hit me. I was a big ball of flame, running out of there, my safety glasses melting around my eyes. I thought I was blind. Dying.”
Mr. Rohr, who is called A.J., stared into his coffee cup, crying.
Erick Hartse, 23, who had been his assistant driller and escaped injury in the blowout, winced. “I have a lot of guilt,” he said. “I sent A.J. down to check the inside choke that day. It was per our blowout procedures, but I was the last one to see this guy unhurt, unscathed.”
Mr. Rohr and two colleagues were airlifted to a burn center in Minneapolis. With serious burns over 60 percent of his body. Mr. Rohr spent a month hospitalized. Still in constant pain and reliant on painkillers, he has not returned to the oil fields, the only job he has ever known.
The two men and their boss, Wally Dschaak, said they thought from the start that the well, situated in a remote, serene spot about a mile from the Little Missouri River, was going to give them trouble.
“From the day we moved onto that miserable, slimy, dirty location, things had been fighting us,” Mr. Hartse said.
Mr. Dschaak said, “That well was one step away from getting out of control at all times.”
Continental, which declined to discuss the case, imported oil fire specialists from Texas to extinguish the blaze. Later, Cyclone sent Mr. Hartse to Wyoming to help build a replacement rig, he said, but did not allow him to accompany it back to North Dakota. “Continental wanted no part of anybody who was there that day,” Mr. Hartse said.
“I understood Cyclone’s position,” he added. “You can’t kill the goose that lays the golden egg.”
by Luther Blissett » Mon Dec 01, 2014 5:55 pm
Where Oil and Politics Mix
By DEBORAH SONTAG NOV. 23, 2014
After an unusual land deal, a giant spill and a tanker-train explosion, anxiety began to ripple across the North Dakota prairie.
TIOGA, N.D. — In late June, as black and gold balloons bobbed above black and gold tables with oil-rig centerpieces, the theme song from “Dallas” warmed up the crowd for the “One Million Barrels, One Million Thanks” celebration.
The mood was giddy. Halliburton served barbecued crawfish from Louisiana. A commemorative firearms dealer hawked a “one-million barrel” shotgun emblazoned with the slogan “Oil Can!” Mrs. North Dakota, in banner and crown, posed for pictures. The Texas Flying Legends performed an airshow backlit by a leaping flare of burning gas. And Gov. Jack Dalrymple was the featured guest.
Traveling through the “economically struggling” nation, Mr. Dalrymple told the crowd, he encountered many people who asked, “Jack, what the heck are you doing out there in North Dakota?” to create the fastest-growing economy, lowest unemployment rate and (according to one survey) happiest population.
“And I enjoy explaining to them, ‘Yes, the oil boom is a big, big help,' ” he said.
Outsiders, he explained, simply need to be educated out of their fear of fracking: “There is a way to explain it that really relaxes people, that makes them understand this is not a dangerous thing that we’re doing out here, that it’s really very well managed and very safe and really the key to the future of not only North Dakota but really our entire nation.”
Tioga, population 3,000, welcomed North Dakota’s first well in 1951, more than a half-century before hydraulic fracturing liberated the “tight oil” trapped in the Bakken shale formation. So it was fitting that Tioga ring in the daily production milestone that had ushered the Bakken into the rarefied company of historic oil fields worldwide.
But Tioga also claims another record: what is considered the largest on-land oil spill in recent American history. And only Brenda Jorgenson, 61, who attended “to hear what does not get said,” mentioned that one, sotto voce.
The million-barrel bash was devoid of protesters save for Ms. Jorgenson, a tall, slender grandmother who has two wells at her driveway’s end and three jars in her refrigerator containing blackened water that she said came from her faucet during the fracking process. She did not, however, utter a contrary word.
“I’m not that brave (or stupid) to protest among that,” she said in an email afterward. “I’ve said it before: we’re outgunned, outnumbered and out-suited.”
North Dakotans do not like to make a fuss. Until recently, those few who dared to challenge the brisk pace of oil development, the perceived laxity of government oversight or the despoliation of farmland were treated as killjoys. They were ignored, ridiculed, threatened, and paid settlements in exchange for silence.
But over the past year and some, the dynamic seemed to be shifting.
Satellite photos of western North Dakota at night, aglitter like a metropolis with lighted rigs and burning flares, crystallized its rapid transformation from tight-knit agricultural society to semi-industrialized oil powerhouse. Proposals to drill near historic places generated heated opposition. The giant oil spill in Tioga in September 2013 frightened people, as did the explosion months later of a derailed oil train, which sent black smoke mushrooming over a snowy plain.
Then, this year, North Dakotans learned of discovery after discovery of illegally dumped oil filter socks, the “used condoms” of the oil industry, which contain radiation dislodged from deep underground.
Suddenly a percolating anxiety came uncorked. “The worm is turning,” Timothy Q. Purdon, the United States attorney, said in April.
It was against this backdrop that on a brisk spring day David Schwalbe, a retired rancher, and his wife, Ellen Chaffee, a former university president, walked headlong into the wind on their way to an F.B.I. office in Fargo.
A mile-long oil train was rumbling through downtown. Wordlessly, Mr. Schwalbe tightened his grip on the black binders bearing what he considered evidence, based on an unusual deal involving his family’s land, that Governor Dalrymple had a corrupt relationship with the oil industry.
‘This has David kind of nervous,” Dr. Chaffee confided. “He comes from a very below-the-radar culture.”
A Potential Advantage for the Oil Industry
As a boy in the 1950s, Mr. Schwalbe scampered up and down the steep banks of Corral Creek, which flows from Killdeer Mountain into the Little Missouri River. His family homestead lay in the remote region where Theodore Roosevelt sought solitude in what he called the “desolate, grim beauty” of the Badlands.
Like many in his generation, Mr. Schwalbe took for granted the craggy buttes and rippling grasslands, the cottonwoods and poplars, the mule deer and mountain lions. He never anticipated a day when this singular landscape would be ravaged, in his view, by rigs, pumping units, waste pits and pipelines and when he would become an archetypal North Dakotan of a certain age, disheartened by what others saw as progress.
As he helped his father run cattle 11,000 feet above the Bakken formation, Mr. Schwalbe came to understand that the family ranch would never sustain his parents and their six adult children. After college, he settled in eastern North Dakota, returning home mostly for “brandings, hunting and holidays.”
When their father died, five Schwalbe siblings — David, Dennis, Donnie, Donnette and Dale — sold their shares of the ranch to their brother Delry. All six kept their rights to what lay beneath the surface, however. Just in case.
The Schwalbes were following the lead of Burlington Northern Railroad, which once owned every other tract in the area, the legacy of a federal land grant. The railroad eventually sold the surface but retained the minerals, which were managed by its energy company, Burlington Resources, now a subsidiary of ConocoPhillips.
“We figured they knew something we didn’t,” Mr. Schwalbe said.
Land has long been sliced and diced in North Dakota from generation to generation, with surface ownership severed from the ownership of underlying minerals like coal and oil. Given that mineral rights trump surface rights, this made many residents of western North Dakota feel trampled once the boom began.
In 2006, a land man for Marathon Oil offered to lease the Schwalbe siblings’ 480 acres of minerals for $100 an acre plus royalties on every sixth barrel of oil.
“Within a few years, people were getting 20, 30 times that and every fifth barrel,” Mr. Schwalbe said. But the Schwalbes did not expect “to see any oil come up out of that ground in our lifetime.”
Oil companies were just starting to combine horizontal drilling with hydraulic fracturing to tap into the mother lode of Bakken oil. “We didn’t really know yet about fracking,” he said.
The Schwalbes’ first well was drilled in 2008, their second the next year. Powerless to block the development, Mr. Schwalbe and his wife, nearing retirement, took some comfort in the extra income, the few thousand dollars a month.
Then that was threatened, too.
On June 20, 2011, the Schwalbes received a letter informing them that Burlington Resources intended to forge a 30,883.94-acre oil production unit that would effectively override their lease agreement with Marathon and subsume their mineral property. In the Bakken, such units are typically 1,280 acres.
The Schwalbes were instructed to sign a ratification agreement by August, when a hearing was scheduled on what some started calling “the mega-unit.” The mega-unit would include the Little Missouri State Park, a patchwork of private, state and federal land beloved for its rugged trails.
Initially perplexed by the thick document on their doorstep, the Schwalbes soon grasped a painful point: though they would be ceding control of their mineral property, their consent was not required. Only the owners of 60 percent of the unit’s minerals were needed for ratification, and Burlington, together with the federal government, already met that goal.
“That’s part of why they chose Corral Creek for their scheme,” Dr. Chaffee said. “They didn’t have to deal with a lot of fleas like us, the pesky citizens.”
The proposal had the potential to set an advantageous precedent for the oil industry.
As ConocoPhillips officials explained at the August hearing, they aimed to maximize oil recovery by being freed of the “artificial boundary lines” that require 200-foot setbacks from the borders of each standard production unit. Their plan would allow for 23 more wells; for 73,000 more barrels of oil per well; and for consolidated production that would reduce “surface disturbance,” truck traffic and air pollution. It was a proposal “for the common good,” they said.
Many of the “pesky citizens” were skeptical. “Basically this whole unit scenario is only good for one person, and that’s Burlington,” Leroy Fettig, a land and mineral owner, said at the hearing.
In normal units, oil leases expire after a set time if no drilling occurs and owners can then renegotiate on better terms or put them up for bid. But under the proposed unit, Mr. Fettig said, “You wouldn’t have to drill one additional well to hold all the acreage here theoretically for a very long period of time.”
He worried, too, he said, that Burlington would have unfettered access to a nearly 50-square-mile area and be able to situate well pads, roads and gathering pipelines without having to negotiate easements or rights of way.
“Mr. Fettig, you’re not an engineer, are you?” a lawyer for Burlington asked him. “You’re not a geologist?”
“I’m not a lawyer, either,” Mr. Fettig replied.
Mr. Schwalbe’s lawyers cautioned that he would see a significant drop in his monthly checks, as his royalties would be shared with all the mineral owners in the mega-unit, including ConocoPhillips itself. Down the road, he could recoup that loss, and then some, when wells were developed elsewhere in the unit. But he worried that if, say, oil prices dropped, he would not see that income in his lifetime.
Before the hearing, Mr. Schwalbe had approached Lynn D. Helms, director of the state’s Department of Mineral Resources, with a compromise: unitize the property in phases to be fairer to the owners of the dozen existing wells.
“I realize in the overall scope of things, my check is pretty small, but it’s got a Social Security check beat all to hell,” Mr. Schwalbe said at the hearing. “I’m hoping with the help of the commission this can be worked out equitably for everybody.”
Mr. Helms ultimately executes the policies of the three elected officials — the governor, attorney general and agriculture commissioner, all Republicans — who make up the North Dakota Industrial Commission, which regulates the oil and gas industry. Yet at their monthly meetings, he guides them calmly from vote to vote and rarely encounters dissent. A review by The New York Times of meeting minutes since 2011 found no failed motions concerning oil and gas.
“You feel as if the meetings are a performance, that everything’s sort of done under the table, with a lot of back-room deals,” said Wayde Schafer, the Sierra Club’s sole employee in North Dakota.
Private citizens were not the only ones concerned about the mega-unit. “Before we get all up in arms about it, we have a few questions about what the proposal is and if it is going to benefit us or not,” a state land official wrote to a state oil official in October 2011. “One of the things that has got us so upset is that they are playing this off as a ‘done deal.' ”
It is essentially a done deal, the oil official responded, saying he expected an order at the Nov. 21 commission meeting would “dispose of this case.”
The Nov. 21 vote was postponed.
On Dec. 16, Mr. Schwalbe received a notarized copy of an order signed by Mr. Helms on Dec. 5. Citing “issues in this case of such complexity that additional time is necessary for the commission to render a decision,” it continued the case for 45 days. Mr. Schwalbe breathed a sigh of relief.
On Dec. 20, however, he got a call from his brother Donnie: The commission had taken up the matter after all, voting unanimously to approve the mega-unit.
“We were just dumbfounded,” Mr. Schwalbe said. “It seemed so sneaky. You know how sick a feeling it is when somebody takes your property away and gives it to somebody else? And you don’t even get a chance to be there and protest?”
Mr. Helms’s spokeswoman, Alison Ritter, said, “There’s nothing in that order that says we couldn’t act before the 45 days was up.”
Before the vote, Mr. Helms had recommended approval because, he said, the mega-unit would allow for more efficient drilling with fewer multiwell pads and storage tank batteries and “a much smaller impact on the park.” He also cited “one other major positive” — the recovery of an additional 15 million barrels of oil. During the long discussion that followed, the park was barely mentioned, though Mr. Helms did note that the development called for no tank batteries inside it.
In a statement to The Times, Governor Dalrymple’s office said the commission had acted “solely to preserve the Missouri State Park’s viewscape.”
Under the present development plan, there will be up to 28 wells and, despite what was said before the commission’s vote, three storage tank batteries inside park boundaries, Jesse Hanson, a state parks official, said. He called it “a significant intrusion.”
‘Reluctant Landowners Standing in the Way of Progress’
North Dakota’s small conservation movement has shied away from the confrontational approach that characterizes the antifracking movement elsewhere.
“We all feel we have to issue the apologia that we’re not anti-oil, we just want to see it done responsibly,” Dr. Chaffee said.
The industry, as a result, has not grappled with much opposition. “From a conservation standpoint, I can name most of those people,” said Ron Ness, president of the North Dakota Petroleum Council.
In her split-level house overlooking the majestic White Earth River Valley, Brenda Jorgenson, for one, has been a persistent thorn in the side of industry and state officials.
“ 'Reluctant landowners’ is the phrase they use for people like us,” her husband, Richard Jorgenson, said, laughing. “Reluctant landowners standing in the way of progress.”
While the Schwalbes were battling the mega-unit, the Jorgensons were trying to get their dirty drinking water tested by the state and then challenging, unsuccessfully, the burial of a waste disposal pit they call a “toxic tomb” on their property. Later, also unsuccessfully, they fought the construction of a high-pressure gas pipeline in their fields.
“We had a human prayer line to block that pipeline,” Ms. Jorgenson said. “It’s like having a ticking bomb in your backyard.”
Ms. Jorgenson maintains photo albums that intermingle pictures of her grandchildren doing snow angels with those of fracking trucks advancing on her home. Relatives ask why she and her husband do not just move. “But that’s just what the oil companies want,” Ms. Jorgenson said. “They see us as the trespassers.”
One company, in fact, sued three activist landowners in 2011, seeking damages for trespassing after the men tried to document what they believed was the cover-up of a saltwater spill.
A judge dismissed the lawsuit, calling it an effort to “shut these people up.”
“It was a great result, which is kind of rare,” said Derrick Braaten, their lawyer.
When Mr. Purdon, the United States attorney, tried to hold oil companies accountable for dead migratory birds, the result was not as satisfactory.
For years, federal wildlife agents had been imploring oil companies to cover their waste pits; migratory birds sometimes dived or fell in, dying preventable deaths. But some companies preferred to absorb the cost of citations rather than invest in netting.
In 2011, Mr. Purdon decided firmer action was needed. In one sweep through the Bakken, Richard Grosz, a special agent for the United States Fish and Wildlife Service, collected 28 dead birds from drilling sites. One, found submerged, had a rock tied to its neck: “They had tried to deep-six the evidence,” Mr. Grosz said.
Six oil companies were charged with misdemeanor violations of the Migratory Bird Treaty Act. Mr. Purdon said that within hours of the complaints being filed, he received a call from a friend with a message from top-ranking state officials: “If Tim thought he would be a federal judge someday, that’s done.”
Three companies signed plea agreements. The others fought the charges, and not just in court. During a presidential campaign debate, Mitt Romney, whose energy adviser was chief executive of one of those companies, Continental Resources, mocked the prosecution; The Wall Street Journal called Mr. Purdon “dodo prosecutor of the year.”
A federal judge dismissed the cases, saying the bird act was meant to address deliberate killing by hunters and poachers.
Since then, Mr. Grosz said, “we have not gone back out in the oil patch to look for these things. Birds are still being killed. But we’ve quit.”
A ‘Case of Such Complexity’ Suddenly Becomes a Done Deal
The mega-unit became a reality on Jan. 1, 2012. Mr. Schwalbe’s first royalty check was reduced by 95 percent.
For many months, Mr. Schwalbe and his wife stewed. Then Dr. Chaffee, apolitical during 15 years as president of state universities, decided to get partisan. She joined the Democratic ticket of State Senator Ryan Taylor, a fresh-faced rancher who faced an uphill battle against Mr. Dalrymple for an office under Republican control for two decades.
Mr. Dalrymple was running his own first race for governor, having ascended to the post in 2010 after his predecessor was elected to the United States Senate.
On the day Mr. Taylor announced Dr. Chaffee’s candidacy for lieutenant governor, Mr. Schwalbe stepped off the sidelines of what his wife called a “near-hermit existence.” His first campaign assignment was to study the opposition’s year-end financial disclosure report.
And there he found what he believed to be an explanation for why the mega-unit “case of such complexity” had gotten simpler after Mr. Helms signed the Dec. 5 continuation order.
On Dec. 5, the Exxon Mobil Corporation PAC contributed $600 to Mr. Dalrymple’s campaign. On Dec. 12, Harold G. Hamm, chief executive of Continental, gave $20,000. On Dec. 17, the Marathon Oil PAC gave $5,000. On Dec. 21, the day after the mega-unit vote, for which he was present, Continental’s Bismarck-based lawyer gave $5,000. On Dec. 27, Denbury Resources contributed $5,000.
All these companies held a working interest or lease ownership in the Corral Creek mega-unit. ConocoPhillips, which stood to profit the most, had contributed $1,000 through its PAC in October.
The governor’s office declined The Times’s requests to interview him, and provided a written statement. It did not verify or deny The Times’s calculation of contributions or respond to specific questions about allegations of conflicts of interest.
Over the campaign, Mr. Dalrymple would collect over $93,000 from those with a direct interest in the mega-unit and a total of about $550,000 from oil-related executives, lawyers and political action committees. That represented a quarter of the $2.16 million in contributions over $200 (the bar for disclosure) to Mr. Dalrymple.
Governors in top oil-producing states typically get industry contributions. In North Dakota, though, the governor’s relationship to those contributors’ interests is uniquely direct because he is chairman of the Industrial Commission.
In California, by contrast, the Department of Conservation supervises the industry. In Alaska, it is a commission appointed by the governor. In Texas, it is the elected Railroad Commission.
“North Dakota’s is a hugely defective setup,” said David C. Thompson, a lawyer in Grand Forks. “Our elected officials regulate companies they get contributions from and companies they own stock in. Nobody ever recuses himself; they just vote.”
In mid-2012, Mr. Schwalbe approached Mr. Thompson at a campaign event. The lawyer happened to be researching state corruption laws on behalf of Brad Crabtree, a Democratic candidate for the Public Service Commission, which, in addition to regulating utilities, oversees oil pipeline siting and mine reclamation.
Mr. Crabtree, who went on to lose, had declined to accept contributions from the energy industry and sought to shine a spotlight on “comprehensive, institutionalized conflict” in the way North Dakota’s regulators conducted business.
Mr. Thompson, meanwhile, discovered a Watergate-era bribery statute that made it a felony for public officials to accept “a thing of pecuniary value” from any “actor” with an imminent or pending proceeding before them. No quid pro quo was necessary; the mere possibility that the official’s “performance or nonperformance” of his duties could be affected made it a crime.
Therefore, Mr. Thompson concluded in a legal analysis posted on the blog NorthDecoder.com, Mr. Dalrymple, in the case of the mega-unit, had taken bribes.
That bombshell landed with a fizzle. The state media took no interest, Mr. Taylor said, and, “as a candidate behind in the polls, who would be accused of trying to make sheer political hay,” he declined to use the allegations.
Then Mr. Thompson got a call from Paul Sorum, a founder of North Dakota’s Tea Party running for governor as an independent.."He said, ‘Are you aware of the citizen-initiated grand jury process?' ” Mr. Thompson related. “You need 10 percent of voters” in a county to sign a petition.
A week before the election, a petition filed in Dunn County, where the mega-unit is, asked a judge to convene a grand jury to determine whether Mr. Dalrymple could be prosecuted for bribery.
On Election Day, Mr. Taylor lost by nearly 30 points. Even before he had formally announced his candidacy for governor, the State Legislature had eliminated two rural districts, one of them his. “That was a dirty deal,” he said.
A couple of weeks later, a judge dismissed the grand jury petition, finding a few signatures illegitimate.
The Seeds of a Resistance Movement
The conservationists of North Dakota often express nostalgia for the strong stance that former Gov. Arthur A. Link took during a coal-mining boom in the 1970s. He pledged to protect the state for future generations “when the landscape becomes quiet again.”
“When the draglines, the blasting rigs, the power shovels and the huge gondolas cease to rip and roar, and when the last bulldozer has pushed the last spoil pile into place and the last patch of barren earth has been seeded to grass or grain, let those who follow and repopulate the land be able to say, ‘Our grandparents did their job well,' ” he said.
The current governor is better known for his business acumen than his rhetoric. John Stewart Dalrymple III, 66, is something of a patrician, a rarity in North Dakota. His state biography says he grew up “on the family farm in Casselton,” N.D., but he was born in Minneapolis and attended a private day school there before boarding at St. Paul’s School in New Hampshire and going on to Yale, like his father before him.
The 140-year-old family farm once stretched over 32,000 acres, making it “the largest cultivated farm in the world,” according to North Dakota State University archives. More recently, Dalrymple Farms has been one of the state’s largest recipients of federal commodity subsidies.
Mr. Dalrymple was more of an agribusinessman than the typical North Dakota farmer: “I’m not saying he never greased a combine, but his farm office was in the National Bank building in Casselton and he’d wear a white shirt to work,” said Bill Patrie, a specialist in rural cooperatives who worked with Mr. Dalrymple to establish a farmer-owned pasta co-op.
Mr. Dalrymple served as co-op chairman through eight years in the legislature and a decade as lieutenant governor. While lieutenant governor, he championed the cooperative’s conversion to an investor-owned firm in which he was a major shareholder, and then oversaw its sale to a Canadian conglomerate, making $3.77 million.
“In essence, Jack converted a quasi-public local institution into a personal, one-time profit maker and sold it to a multinational corporation,” Mr. Patrie said, adding, “I believe he used his public office for private gain.”
But Mr. Patrie said the local news media and farmers’ groups did not raise objections.
“We North Dakotans trust our politicians — even when they sell us out,” he said.
Many Democrats were incensed when Edward T. Schafer, a Republican former governor, toured the state in an oil industry-sponsored “Fix the Tax” bus in 2011, arguing that oil taxes should be lowered to prevent the boom from going bust. The effort failed; afterward, Mr. Schafer was named to the board of Continental Resources, and awarded a compensation package, mostly stock, valued at $700,000 that year.
According to Mr. Dalrymple’s 2012 statement of interests, he and his wife own oil stock themselves, including unspecified amounts in at least one company with regular business before his Industrial Commission: Exxon Mobil, a top state producer through its subsidiary XTO.
Because XTO was a working interest owner in the mega-unit, Mr. Schwalbe believed the governor himself could be said to have “owned a piece of the property.”
In early February 2013, Mr. Schwalbe filed a second grand jury petition.
At the same time, state legislators pushed for a higher bar for citizens to convene grand juries so that innocent people would not be subjected to criminal charges, as one legislator put it. They succeeded. And a judge threw out the second citizens’ petition.
Mr. Schwalbe felt defeated, but pockets of resistance were beginning to develop as the boom intensified.
Taking Steps to Assert Greater Authority
Early this year, an irritated crowd at a Mountrail County Commission meeting confronted Mr. Helms, the director of mineral resources, asking why state officials had approved an oil waste pit in the wellhead protection area for a municipal water supply.
Mr. Helms explained that his inspectors had had the wrong maps, adding, “We strive for perfection, but since we’re human, we have to settle for excellence.”
That came across as cavalier to the Rev. Carolyn Philstrom, a young Lutheran pastor, who shot off a letter to the editor of a local newspaper. “I baptize babies with that water,” she wrote, though she subsequently tempered her outspokenness because it bothered parishioners.
When the illegally dumped oil filter socks were discovered, Rick Schreiber, the director of solid waste for McKenzie County, became the rare official voicing outrage at what he called oil company recklessness and state inaction.
“I’m not here to make friends with the oil patch,” Mr. Schreiber said in February as trucks rolled over the radiation detector he had installed at his landfill. “If I’m the guy that has to beat the hornets’ nest with a stick, I’ll do it.”
This year, the Industrial Commission has gradually taken steps to assert greater authority over the industry.
After applications to drill near a 19th-century battlefield and near the Elkhorn Ranch in Theodore Roosevelt National Park stirred unusually heated public debate, the commission established special procedures including a public comment period for drilling on public, though not private, land near 18 “areas of interest.” The petroleum industry had resisted, cautioning that “radical environmentalists” would exploit the comment period to obstruct development. But conservationists saw the measure as a watered-down version of a proposal that already offered too little, too late.
Next, after more than a dozen mineral owners filed anti-flaring lawsuits, the commission moved to clamp down on a longstanding problem. Some 30 percent of the natural gas produced in the state — compared with less than 1 percent nationwide — was being treated as a byproduct of oil production and burned off.
At a hearing in April, Dr. Lyle Best, a pediatrician, said he lived downwind of tall flares that roared like jetliners and flickered light through his bedroom window.
“Our real annoyance, however, is the understanding that these two flares have burned off over 60 million cubic feet of natural gas in the past six months and are continuously wasting enough energy to heat hundreds of homes at the same time that many people in our country are sleeping on the street, and at least one North Dakotan died of hypothermia this winter,” he said. “This doesn’t even address the issue of carbon dioxide and other pollutants.”
When the commission voted in July to require “gas-capture plans” and impose production restrictions if companies did not meet them, Mr. Dalrymple said, “I hope that what we do today, we are serious about.”
And when QEP Resources petitioned to create its own mega-unit, Mr. Dalrymple dissented from the 2-to-1 vote of approval. In its statement, the governor’s office said the QEP mega-unit, unlike the Corral Creek one, would not have provided a “benefit to conservation efforts.” QEP later dropped its plan.
A Series of Disappointments
At the entrance to the mega-unit, on the dirt access road built for the hundreds of trucks that now traverse what used to be pristine pastures, Mr. Schwalbe’s cousin, Candyce Kleemann, sat at the wheel of her pickup, photographs on her dashboard.
“These are the before pictures: before the invasion,” said Ms. Kleemann, who lives and ranches inside the unit. “When we fought the unit, they told us there would be minimal damage or changes. But it’s a different landscape. Look, that’s our new saltwater injection well.”
She pointed to a sign: “Danger: H2S. Poisonous gas.” And to another: “Caution: power lines.” Her own sign, proclaiming her land to be private property, made her snort.
“That one’s useless,” she said. “We’re even more powerless than surface owners in the rest of the oil patch. In this unit, oil can go wherever they want here, put roads and gathering lines wherever they want, bury crud in our ground. The state does not seem to care.”
In 2012, Ms. Kleemann’s husband, Robert, a Dunn County commissioner, complained to the state that the unit development plan was being modified, putting 11 wells within a half-mile of six homes.
When an official responded that the changes appeared necessary for topographical reasons, Mr. Kleemann wrote back, “I do not think you could understand our concerns unless we could put a drilling rig on each side of your house so you could listen to the clang of pipes, the roar of motors, the constant beep of the horn and be awakened in the morning to the driller giving orders over the bullhorn and you could try to sleep with the constant noise of Jake Brakes.”
State officials were more concerned that ConocoPhillips was not developing the unit as aggressively as promised. Now the pace has picked up, with several dozen wells drilled in 2013 and several dozen more this year.
In April, when the Schwalbes laid out their concerns to two F.B.I. agents in a windowless room in the Fargo federal building, they felt encouraged. The agents seemed apprehensive “because of the individual involved,” Mr. Schwalbe said, but gradually “their interest was piqued.”
“They thanked us for coming forward,” he said afterward, surprised.
In the summer, though, a final meeting with the agents left them disheartened. The investigation remained open, they were told, but prosecutors saw no federal case to be made.
Mr. Schwalbe, who had wagered that “this year is going to be better because people are starting to get mad,” was disappointed by the November elections, too.
His wife’s former running mate, Mr. Taylor, ran again, this time for agriculture commissioner, proposing that oil well setbacks from homes be increased to a quarter-mile from 500 feet and that pipelines be fitted with antispill devices. But he lost, as did a ballot initiative to set aside tax revenues for conservation. With considerable oil industry backing, the agriculture commissioner was re-elected, as was the attorney general, extending the mandate of the current Industrial Commission.
Mr. Schwalbe does not like to visit Corral Creek anymore. The landscape is, in his eyes, scarred, the tranquillity spoiled. His new outspokenness led him into an uncharacteristic public role as spokesman for a new group, North Dakota Rural Voters.
“I never thought I’d be involved in anything like this,” he said. “At my age, I thought we’d just slide through the rest of our lives. But at a certain point, it became a point of pride for me personally and me as a North Dakotan. I don’t like people taking things that don’t belong to them, not my money, not my property, not my state.”
by stillrobertpaulsen » Fri Dec 05, 2014 8:39 pm
UN: Climate Change Costs to Poor Underestimated
LIMA, Peru — Dec 5, 2014, 5:40 PM ET
By KARL RITTER Associated Press
The cost to poor countries of adjusting to ever-hotter temperatures will be two or even three times higher than previously thought, the U.N.'s environment agency said Friday ? and that assumes a best-case scenario in which greenhouse gas emissions are dramatically reduced.
"If you don't cut emissions, we're just going to have to ask for more money because the damage is going to be worse," Ronald Jumeau of the Seychelles said at U.N. climate talks.
The report was bound to sharpen disputes in Lima over who pays the bills for the impacts of global warming, whose primary cause is the burning of coal, oil and gas but which also includes deforestation. It has long been the thorniest issue at the U.N. negotiations, now in their 20th round.
Rich countries have pledged to help the developing world convert to clean energy and adapt to shifts in global weather that are already adversely affecting crops, human health and economies. But poor countries say they're not seeing enough cash.
Projecting the annual costs that poor countries will face by 2050 just to adapt, the United Nations Environment Program report deemed the previous estimate of $70 billion to $100 billion "a significant underestimate." It had been based on 2010 World Bank numbers.
The report says new studies indicate the costs will likely be "two to three times higher," possibly even as high as $500 billion.
But that's only if global warming stays below 2 degrees Celsius (3.2 degrees Fahrenheit) compared to pre-industrial times, the limit set in the U.N. talks. Scientists say that would require cuts in greenhouse gas emissions that the world is nowhere near on track to accomplish.
"The report provides a powerful reminder that the potential cost of inaction carries a real price tag," UNEP director Achim Steiner said in a statement.
Climate change impacts, including rising sea levels, shifts in rainfall patterns and more intense heat waves, affect all countries but the latter aren't well equipped to cope.
They need help to protect their shorelines, crops, and freshwater resources from rising seas, droughts and floods.
"We know what needs to be done. We just need the dollars or euros," said Jumeau, who is also spokesman for small island states. The Seychelles is struggling to protect beaches from eroding, freshwater wells from drying up and coral reefs from being damaged, he said.
There is concern in Latin America that gains against poverty in the past two decades will be reversed due to climate change.
A World Bank study this year found two degrees of warming would cause crop yields in Brazil to drop by 30-70 percent for soy and 50 percent for wheat.
Rich countries have pledged to provide $100 billion by 2020 to help developing reduce their emissions and adapt to climate change. They are not on track to deliver. Their governments provided about $25 billion in adaptation money to developing countries in 2012-2013, the UNEP report said.
Jumeau noted that the U.S. Congress approved more than twice as much in a disaster aid package after Hurricane Sandy in 2012.
The talks' host country, Peru, is one of the most vulnerable to climate change. Already, it faces diminished highland water supplies from melting glaciers and global warming has also hurt the fishing industry.
The U.N.'s World Food Program says 3 million Peruvians ? or one in 10 ? are highly vulnerable to food insecurity and natural disaster risks.
Yet, like most developing nations, what it spends on adapting to climate change, including highlands reservoirs and irrigation projects, will have to compete with other urgent needs, such as improving education, public health and public transport.
"There isn't enough money and there aren't resources specifically earmarked to finance adaptation in Peru," said Lenkiza Angulo, who runs adaptation projects in the Andean nation funded by the Swiss government and valued at $11 million.
One vehicle for funding adaptation ? as well as mitigating damages from climate change ? is The Green Climate Fund, which nearly reached the $10 billion mark on Friday with a $258 million pledge from Norway.
by Luther Blissett » Sat Dec 06, 2014 2:42 pm
Antarctic Ice Loss Tripled in the Last 10 Years
DEC 3, 2014 12:45 PM ET // BY AFP
The melt rate of glaciers in the fastest-melting part of Antarctica has tripled over the past decade, researchers said Tuesday in an analysis of the past 21 years.
Glaciers in the Amundsen Sea in West Antarctica are losing ice faster than another part of Antarctica and are the biggest contributor to rising sea levels, said researchers at the University of California at Irvine and NASA's Jet Propulsion Laboratory.
Research published in May concluded that the melting of glaciers in West Antarctica, which contain enough water to raise sea levels by at least a meter, is speeding up and seems irreversible.
The study is the first to assess and reconcile observations from four different measurement techniques so as to generate an authoritative estimate of the amount and the rate of loss over the last two decades, said the researchers.
Their work will be published in the journal Geophysical Research Letters dated December 5.
"The mass loss of these glaciers is increasing at an amazing rate," said scientist Isabella Velicogna, jointly of UCI and NASA's Jet Propulsion Laboratory.
"Previous studies had suggested that this region is starting to change very dramatically since the 1990s, and we wanted to see how all the different techniques compared," said lead author Tyler Utterley of UCI.
"The remarkable agreement among the techniques gave us confidence that we are getting this right," he said.
The measurements were carried out by radar and satellites belonging to NASA and the European Space Agency, and with the atmospheric climate model developed by the University of Utrecht in the Netherlands.
The total volume of ice lost since 1992 averages 83 gitatons per year. By comparison, the glaciers of Antarctica have melted the equivalent of Mount Everest every two years for the past 21. Everest weighs 161 gigatons, altogether.
The melt rate of these glaciers has increased an average of 6.1 gigatons per year since 1992. And from 2003 to 2009, when the four techniques were used simultaneously, the rate has risen 16.3 gigatons a year, nearly a tripling compared to the full 21 year period.
The results were released as a global warming conference has begun in Peru. Those talks are seen as critical to reaching a multilateral accord next year in Paris.
by NeonLX » Sat Dec 06, 2014 4:30 pm
by Ben D » Sat Dec 06, 2014 4:51 pm
by DrEvil » Sun Dec 07, 2014 2:01 pm
by Ben D » Sun Dec 07, 2014 6:23 pm
by Iamwhomiam » Sun Dec 07, 2014 9:20 pm
by DrEvil » Sun Dec 07, 2014 10:00 pm
Also note that since the UN and governments of the world subscribe to agw, naturally only those scientists whose research is pro-agw are able to get grants from their respective governments...and so while agw skeptical scientists may complain about this, in practical terms, it couldn't be any other way....
by Ben D » Sun Dec 07, 2014 11:27 pm
DrEvil » Mon Dec 08, 2014 12:00 pm wrote:Also note that since the UN and governments of the world subscribe to agw, naturally only those scientists whose research is pro-agw are able to get grants from their respective governments...and so while agw skeptical scientists may complain about this, in practical terms, it couldn't be any other way....
I said scientists, not agw skeptical scientists. Why aren't scientists from other fields and departments all over the climate scientists if it's all a scam?
Ah, so every single government on the planet is in on it too. Is there anyone who is not?
by zangtang » Sun Dec 07, 2014 11:35 pm
by Ben D » Sun Dec 07, 2014 11:50 pm
by zangtang » Mon Dec 08, 2014 12:31 am
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