FARGO, N.D. (AP) - A years-long dispute about who owns the mineral rights under a man-made lake is now being debated in the North Dakota Legislature, with the state’s new governor automatically thrust into the controversy. Here’s a look at what’s new and what’s at stake:
THE ISSUE
The state, the feds, land owners and oil companies all have an interest in oil that lies under Lake Sakakawea. That’s the 180-mile-long lake created in the 1950s when the Garrison Dam was built on the Missouri River.
Advances in drilling technology generations later brought the oil under the newly created lake within reach. But they also set the stage for a complicated dispute over who had the rights to it.
When property was condemned to make room for the lake back in the 1950s, the federal government conducted surveys defining the state-owned Missouri River. But in recent years the state has leased mineral rights by relying on aerial surveys conducted in 2009 that define the ordinary high-water mark of the river - a much larger area that naturally brings more oil into play.
The state says a 2013 state Supreme Court ruling supports its position.
Now, a bill in the Legislature would limit the state’s mineral claims to the much smaller original Missouri River boundary.
WHAT’S NEXT
The Board of University and School Lands, which is led by the governor, oversees the state Land Department that is responsible for managing mineral leases. The board will have its first opportunity Monday to discuss the bill to limit the state’s claims.
At stake are 710 mineral leases involving about 40,000 acres. Losing that could cost the state nearly $213 million in revenue in the current two-year budget period, Land Commissioner Lance Gaebe said.
At the land board’s last meeting in October, under Gov. Jack Dalrymple, the board stuck by its position on those leases, but denied assertions by mineral owners and others that it was positioning itself to require mineral rights under the entire lakebed. New Gov. Doug Burgum isn’t commenting on the dispute ahead of the next Land Board meeting on Monday.
IT’S COMPLICATED
Gaebe said there’s no disputing the state owns navigable rivers and the Supreme Court decision affirmed that the state owns the ordinary high water mark. State officials warn that if the bill passes, the lost royalty revenue would likely drain a state fund that has paid for such ventures as road and infrastructure projects in the oil patch, school construction, and a college laboratory and library.
“What the land board has done is on behalf of all North Dakotans,” Gaebe said.
Sen. Kelly Armstrong, R-Dickinson, who proposed the bill limiting the state’s mineral rights, said land owners and oil companies have been caught up in a “never-ending legal fight” between the state and feds. He said it’s more important to do what’s right over the potential financial impact to the state.
“The cost to the state occurs because we are returning minerals to their rightful owners,” Armstrong said.
Armstrong said the bill should come out of committee next week.
OIL COMPANIES
The bill would save oil companies money in royalty payments because the state charges more than the feds for mineral leases. The companies also say the dispute needs to be solved because it is hindering development.
Continental Resources, Inc., an Oklahoma oil and natural gas company, filed a lawsuit earlier this month against the land board and federal government over who deserves royalties from minerals under the lake. The state says it is owed about $3.3 million and the federal government says it is owed $2.4 million from the same 43 wells.
Continental wrote in its lawsuit it can’t tell whether it should be paying royalties to the federal or state government.
The company refused to comment on the bill.
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